Community Trust and Online fundraising

If there was one transformational epiphany I wished people at non-profit organizations could have it would be this:

Every person has a limited number of close friends, and a large number of acquiantences

No matter who you are, you don’t have very many close, personal, intimate, trusted friends. The average number is actually ZERO, but this illustration assumes you have five. Fifty years ago surveys found that the average American had three close friends, so these circles are getting smaller on the red (personal, trusted) side and bigger on the green (networking list, acquaintance) side.

Growing any organization requires asking A LOT of people for money. Most people will say no – about 88% of friends and 96% of impersonal contacts. The way that you contact people naturally maps to how important that person is in your life. As shown above, sending out a bulk-email from your address book isn’t going to bring in very many donations, compared with sharing a coffee or tea time together. Even a personal SMS is more intimate than a Facebook ask.

Trust is a central part of asking people for money. And the reaction people have to your asking tells you how much they trust and care about you or your cause, if you didn’t already know. As the above image shows, people can block you, befriend you, chat with you, or best of all – take your message and pass it on to others. Such “endorsing” behavior happens at the confidant stage – the inner circle – only.

So what is a person to do if they want to join GlobalGiving through an open challenge?

The goal is to raise at least $4,000 from at least 50 donors in one month. To accomplish this goal, you must realize two things:

  1. You or your network of staff, friends, and supporters must talk to literally hundreds, perhaps thousands of new people.
  2. You cannot accomplish this goal alone. It requires a community effort (whatever you define as your community).

These requirements are by design. I think it requires inviting between 400 and 4000 people to give, depending on your level of trust with each potential supporter. If you had 400 people with whom you had built up years of trust and friendship, this would be easy. But most people begin new relationships during the challenge; they will require 4000. On balance, I put the magic number at 1600 – the number of people you must contact (about 100 close friends and 1500 new friends).

None of us have 100 close friends. We each have from 3 to 12. So it will typically take 100/12 = 8 fully active friend-mobilizers to engage 100 close friends, not including the 1500 new friends you need. How do you get to the 1500 new friends?

Each of the close friends must invite their friends. This is why so many donations appear to come through social media, such as facebook, twitter, or email. That is just an illusion. They really come from and through the dozen close friends that are leading this concerted effort to mobilize new supporters.

Note that 50 donations/1600 asked = 0.03, or 3 percent. Generosity is uncommon. Only about 3 percent of this whole group will give. But 18% of people with whom you have spent at least a year explaining the importance of your work will give – so consider “relationship building” a long-term investment of your time and energy.

I’ve also shared a flash movie about HOW you do this and why it builds trust for the organiztaion here:

grassroots funding tree globalgiving training video

Make like a tree: How to grow your organization from the grassroots

Why does GlobalGiving require this?

GlobalGiving is a trust and reputation building system for non-profits worldwide. We vet every organization and guarantee every donation. In addition to doing background checks on who is running the org, what they claim to be doing, and measuring their social footprint, we need to know that they have a community of supporters – somewhere, anywhere. This challenge proves to the world that they do have a community. However, it is a big challenge for small organizations whose supporters don’t have credit cards – those organizations typically have to talk to more than 4000 people, because many people who would have given cannot give. Instead these people must endorse, advocate, and encourage other friends to give.

The end result does must more for the organization. At the end, organizations understand online fundraising, have a demonstrated global reputation as good as any US organization — a level playing field of trust, and now have the means to continue engaging a much larger group of supporters — increased capacity.

Organizations:

  1. Become experts at online fundraising
  2. Build a better reputation
  3. Increase their organization capacity

Real Demonstrable Capacity Building

Capacity building is the latest buzzword in international development. I did background checks on 30 of the 300 new organizations going into the August 2011 open challenge and found that 90% of them put resources into “capacity building” such as staff training, attending workshops, or hosting “stakeholder meetings.” A third actually spend more time and money on these sit-around-and-talk activities than they spend on serving the poor, teaching kids, or healing the sick! I think it all adds up to a pile of wasted time if they aren’t tested on what they supposedly learned.

Organizations must do something with this training. Having to raise $4,000 from 50 different people in one month is like getting an “A+” in NGO capacity. We are here to blur the lines between training and reality.

GlobalGiving is that test of whether non-profits understand how to build community trust and mobilize funds. You can’t do one without the other. And this skill should be the core of “capacity building.”

As a bonus we also standardize their constitution, budgets, audits, and internal systems in the process of scrutinizing them during Due Diligence. This enables NGOs to better compete for grants and programmatic funding.

See also:

http://chewychunks.wordpress.com/2011/03/10/how-to-grow-your-organization-from-the-grassroots/

http://tools.blog.globalgiving.org/

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4 Comments

  1. Posted July 16, 2011 at 2:49 am | Permalink

    Thanks for this educative message on fundraising online. It is true many nonprofit organizations are finding it rough in fundraising online without a network of friends as demonstrated by Marc Maxson. Such nonprofit organizations have succeeded through joing Globalgiving Open Challenge. I have joined the Open Challenge and I am hopeful of creating a sustainable fundraising network that is going to support me in raising funds to support orphans and other vulnerable children in Kenya. I am the Executive Director of UMICEF NGO in Kenya, as well as Executive Director of UNIVERSAL FELLOWSHIP ORGANIZATION that has joined the coming Open Challenge.

    I thank Marc Maxson for this capacity building process. Thanks and God bless you. Bishop Raymond Mutama
    Mobile No.+254722917055.

  2. Posted July 27, 2011 at 12:05 am | Permalink

    Thanks good post and blog Marc.

  3. Posted July 27, 2011 at 4:31 pm | Permalink

    Thanks so much for being so close to the community in helping us learn more ideas of online fund raising,it has not been easy for many charity organization to mobilize funds individually ,i hope many will borrow the idea and pull up .

  4. Posted July 29, 2011 at 9:16 am | Permalink

    This information is educative and helpful. I will save the link and read it from to time. Its really a guide for successful online fundraising

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