By Billy Sharma
The donation amounts most discouraged by charities are those very small gifts or mini-donations. Mini-donations are $3 or $5 or $10 amounts. Nonprofits vigorously discourage them right in their donation forms by stating in black and white: Receipts will be issued only for donations of $20 or $XX (depending on each charity).
However, what these small gifts lack in size, they make up for in impact, both for nonprofits and for the wider mass of donors who may have been touched by the charity’s vision in a targeted direct mail or a social media appeal.
So why are mini-donations being ignored or shunned by nonprofits? Most claim it’s too much of a hassle to deal with them. To which I ask: Really? Is your staff who are in charge of accepting and documenting gifts too busy to even acknowledge them? As it is, most nonprofits are guilty of not acknowledging all gifts in a timely manner. Some charities take weeks to acknowledge a gift.
That shameful practice is further being compounded by also discouraging mini-donations.
The power and importance of mini-donations
For nonprofits, a $1 or $3 gift won’t change much, but 500 or 1,000 of these mini-donations of $1 or $3 could make a big difference to your organization financial bottom line. Think about that.
When UNICEF (United Nations International Children’s Emergency Fund) ran an ambient campaign in New York selling contaminated bottled water in vending machines, laced with malaria, cholera, typhoid, dengue, hepatitis, dysentery, salmonella, and yellow fever — things that people in poor countries drink every day from lakes and cesspools — they raised enough donations of $1 each to provide safe drinking water to 500,000 people globally.
More importantly, these mini donations generally come from an audience outside your standard donor pool, so you are not only attracting new donors, but you are adding to your organization’s finances.
Most charitable organizations’ donor bases consist predominantly of older donors aged 50+. And statistically, it’s shown that these donors prefer to pay by traditional means: i.e., cheque or credit card. And the larger the gift size, the more likely it is to be donated via these traditional methods.
Another reason that charities give is a high credit card transaction fee. I will deal with this point shortly. And there is that age-old question: Why can’t all donors, big or small, be thanked instantly via email?
Just look at what the Global Report on Fundraising says about North American donors:
• Sixty-eight percent prefer to be thanked for their donations by email, 20 percent by print letter, 5 percent by print postcard, 3 percent by social media message, and 3 percent via text message.
Now let’s look at who these mini-donation givers are. Generally, teenagers are the ones who give mini-donations since they can’t afford to give your charity a $100 or $1,000 gift.
Yes, these are the same people who participate in a mass march for the environment or for women’s rights or other issues. These people could be your most loyal devotees in the future.
And then there are also those old loyal donors who once gave to you, but are now retired and can’t afford to give you a large amount any more. What your charity is doing by not accepting mini-donations from these two groups, is rejecting their heartfelt offer.
Another important point is that mini-donations, like impulse based donations, are rising in popularity. These mini-donation gifts are so small, that many donors give them without a second thought. Think of them as impulse items in a supermarket or store, where chewing gum or a candy bar costing a few dollars is proudly displayed at the checkout counter, because they sell easily and produce a healthy profit for the store.
Now back to that point of the effect of a high credit card transaction fee. My answer: To facilitate credit card transactions, third-party platforms like Stripe and Paypal are also still on the rise. They enable quick, easy donations, on the go, and their transaction fees are much lower than previous, traditional methods.
Younger donors are more prominent members of the giving landscape today. They’re donors who are tech-savvy and who care deeply about where their money is going, regardless of whether it’s $10 or $1,000. You should cultivate them by accepting mini-donations.
Understanding the true impact of mini-donations
With smaller donations growing in popularity, the platforms people are giving on are beginning to shift. These stats show the impact of mini-donations. After the 2010 earthquake in Haiti, over $30 million in mobile donations were pledged through text message donations alone.
But the true power of mini-donations comes not just from their volume, but also from the power of sharing. According to GoFundMe Statistics, one out of five donors also share a campaign following their donation. Each gift averages around $15, which in many cases can equate up to 50 percent of a campaign’s donations by volume. Another reason is that Crowdfunding is emerging as a promising alternative to complement traditional fundraising efforts. The GoFundMe crowdfunding platform has raised over $3 billion dollars since its launch in 2010. Mini-donations (donations between $0.25 and $10) were the most common amounts.
Mobile and mini-donations now go hand-in-hand
Mini-donations have tremendous potential for charitable fundraising, especially via mobile giving technology allowing young donors to give directly from their smartphones. With a target audience of 3.5 billion mobile smartphones users globally, mini-donations are now a must for all charities. People are more likely to donate money if there’s an easy way to do it.
Here is another reason to counter high credit card transaction fees. Through easy-to-use smartphone apps, like ApplePay, and platforms like Google One* and Spotfund**, the act of giving has been further simplified and can be as easy as a tap on your smartphone.
Finally, while large donations may still make up the lion’s share of your revenue, the future of philanthropy is giving us clear signals towards the power of mini-donations. As your organization prepares for the year ahead, the most important takeaway from this is to not ignore mini-donations.
I have been advocating that for years. Remember, not all donors like to receive the same types of communications, just like not all donors want to give the same way. Mini-donations give your donors the power of making a difference with their dollar and their voice. Don’t shut them out.
Billy Sharma is the principal of BKS Fundraising/Designers Inc. in Toronto.
* Google’s new application called One Today, allows people to donate $1 to different organizations, while getting the complete information about how your donation will be used up front. This is a huge stumbling block for nonprofits usually, as people are afraid that their money won’t actually get spent on making a real difference. One Today aims to change that. Additionally, One Today has a social component to it, letting you set a cap to how much money you’ll match if your friends donate to a cause.
** Spotfund, New Mobile App, lets you donate only $1, $2 Or $3 to causes and current events.
GLOBAL TRENDS IN GIVING
Demographic Fundraising Statistics:
1. The average donor is 64 years old and generally makes 2 charitable gifts a year.
2. Generational differences between donors depend on the media and the message. So, while older donors are more likely to give because of direct mail, younger donors are more likely to make a donation because of social media marketing.
3. Thirty-one percent of worldwide donors give to organizations located outside of their country of residence.
4. Sixty-seven percent of worldwide donors also choose to volunteer locally in their communities, and 56 percent regularly attend fundraising events.
Source: 2018 Global Giving Report