Evidence indicates that donating to charity can boost your happiness. Luckily for donors, technology has made it incredibly simple to donate by making charitable contributions online. For example, crowdfunding platforms, which have already raised billions of dollars for everything from cool gadgets, college educations, mortgages and small businesses, have been very successful in raising money for philanthropic endeavors including disaster relief, environmental protection, medical bills and various charities. But, what makes these platforms so successful in raising funds for charitable causes?
In the old model of philanthropy, nonprofits had to form an entity and then gather the fund to help those in need. However, due to the high costs involved in organizing a nonprofit organization and fundraising efforts, they had to focus on large sources of capital like wealthy individuals.
In the new model, however, charitable crowdfunding leverages technology to lower their operating costs and gather small donations from large groups of individuals to facilitate positive change. In other words, they are democratising philanthropy. There are already many great platforms that are raising funds for deserving individuals and non-profits.
For example, CrowdRise, an impressive charitable platform that was recently acquired by crowdfunding giant GoFundMe, and Mightycause utilise smooth websites with handy features to allow donors to easily research charities and donate to their favorite cause. These user-friendly sites have been quite successful, raising more than $1.1 billion combined for non-profit organisations.
Kiva is another impressive platform, which offers affordable and interest-free loans to individuals to attend school, access clean energy or start businesses. Its lending model has been incredibly successful. So far, Kiva has lent more than $1 billion in 86 countries and has a 4 out of 4 star rating from Charity Navigator, a testament to its strong reputation and cost-effectiveness.
Charitable crowdfunding platforms have also gained popularity internationally. In Singapore, for example, GIVE.asia more than doubled its total donations from S$4.5 million in 2016 to S$11.2 million in 2017. Recently, donors used the platform to raise about S$190,000 for deceased Singapore Premier League (SPL) footballer Nur Alam Shah’s son who required a heart surgery. It is not surprising that charitable crowdfunding platforms like GIVE.asia have been this successful given that Singapore is recognised as a charitable nation and has already successfully developed other crowdfunding services, including platforms that allow investors to invest in startups and small businesses.
There are a few important considerations to have in mind when choosing among these or any other charitable crowdfunding platforms. First, it can be helpful to decide what causes are most important to you. Perhaps you are particularly concerned with human rights, education or environmental issues. Once you have narrowed down the cause, you can be more focused in your search and find a platform that features these types of charities. Alternatively, donors that would prefer to browse various causes will find that most platforms offer informational materials regarding each crowdfunding campaign, which can be used to find the perfect charity.
It is also helpful to research the platform itself to determine whether it has a good reputation for providing funds to deserving charities. By examining the platform’s fee structure it may be possible to determine if it takes an unnecessarily large cut from donors or recipients. Finally, it is useful to research the individual or organization that is requesting funds. Some platforms make it very easy to access a recipient’s borrowing information or background story. Donors that are concerned with making a tangible impact should try to determine if the recipient has measurable steps in order to reach their ultimate goal.
The technology and structure of crowdfunding make it a perfect match for charitable donations. As these platforms become commonplace in the U.S. and internationally, they could have a increasingly positive effect for important causes.