Microgiving: In Online Philanthropy, Small Is Beautiful

Bill Gates, Warren Buffett and Oprah make the headlines for their multimillion-dollar gifts to charity. But there's a sea change underway that, for the rest of us, makes charitable giving in the Internet age much more democratic, much more social and much more personal.

Call it "microgiving" or "microphilanthropy." New charitable organizations and their websites want your modest donations — sometimes as little as a dollar — and in return they help you get the biggest bang for your buck.

See also: AARP Foundation Gift Planning.

These new online charities steer your donations to causes nearest to your heart — and may even put you in direct contact with the organization or individual who benefits from your gift. They help you enlist your family members, friends and colleagues — your social network — to support your cause and leverage your single donation into a larger and more effective contribution.

Remember the March of Dimes?

Think of these microcharities as the modern, technology-driven offspring of the March of Dimes. The National Foundation for Infantile Paralysis, created by President Franklin D. Roosevelt in 1938, wasn’t just for the Carnegies, Fords, Mellons and Rockefellers. Its appeals for a 10-cent contribution to fight polio went out to every American.

If you’ve made charitable contributions online or through social media, you probably don’t need to be persuaded that it’s the way of the future. If you haven’t given online, though, it may be only a matter of time until you do. Here are indicators:

• Even with the difficult economy, online giving grew 35 percent in 2010 and accounted for 8 percent of all fundraising, according to one study.

• Internet-based contributions to 140 of the nation’s largest nonprofits were up 34 percent in 2010 (to a total of $1.2 billion), fueled by their increasing use of such popular social-media tools as Facebook, Twitter and YouTube, according to an annual Chronicle of Philanthropy survey.

• 11 percent of all cellphone owners have made charitable contributions via text message, according to a 2010 survey commissioned by the Pew Internet and American Life Project.

Social Net-Giving

Much of the growth in online giving is coming from sites that make Internet users not only donors but also fundraisers.

Say that you decide to give away $1,000 in the form of 40 separate contributions of $25, or 20 contributions of $50. Do it the old-fashioned way — with checks, postage stamps, etc. — and it might take you a day or two, plus weeks to get acknowledgments for your contributions back in the mail. Do it online, on the other hand, and you might be done in an hour or two, receipts and all. (Use a credit card and you can even rack up airline miles or points in the process.)

Or say, for the sake of example, that you have only $50 to give but want to help raise $1,000 for your charity of choice. You could do it the old-fashioned way — getting a fundraising kit from the charity and going to door to door to solicit friends or desk to desk to solicit co-workers — and spend days or weeks until you reach your goal. Or you could do it all from your own computer — using tools on the charity’s website to reach any of your friends or other contacts with an email address, Facebook account or cellphone — and meet your goal in a relative flash.

Some newer “social fundraising” sites — Razoo.com and Crowdrise.com, for example — let you set up a page to raise money for a charity (or support your cause in some other way) and then invite everyone in your social network to join with you. You can even use online social media tools to promote older-fashioned offline events such as bake sales or raffles.

Next: How one man started a microgiving group. >>