The Great Philanthropy Disruption

by

Trevor Neilson

Co-Founder, Global Philanthropy Group

The stodgy world of philanthropy is about to be disrupted, and this disruption will fundamentally change and improve the way we integrate the act of philanthropy in to our daily lives.

This year, Americans will donate more than $300 billion to charity. The vast majority of these donations will be small and they will be distributed to more than 1.6 million not-for-profit, tax-exempt organizations.

While the data are limited, it's clear that online giving is becoming more common. According to a Chronicle of Philanthropy analysis of online donations, more than $2.1 billion was raised online for charity in 2012, a 10.9 percent increase from the $1.8 billion raised in 2011. And this doesn't even include the revolution in new payment processing solutions and crowdfunding platforms (I'll get to that in a minute).

Network for Good's most recent study of the topic found that giving through social networks is significant, but donor loyalty is highest on the charity websites that build strong connections with donors.

This is all about to change and improve for the better. In the next two years, social media will become the primary way that Americans give money to charity. Here are four reasons why:

1. Causes spread faster than other content on social media.

What was the top tweet of 2011? This simple sentence from Wendy's:

RT for a good cause. Each retweet sends 50¢ to help kids in foster care. #TreatItFwd

Wendy's is not exactly a sexy brand and most people don't spend their time thinking about foster care, but by giving millions of people the opportunity to quickly and effectively participate, Wendy's tapped into people's inherent desire to help.

At its core, social media is about status and reputation, and those sharing cause-related content can feel like they are doing good in the world while also showing their friends something about who they are. Increasingly, corporations will tap into this need which will simultaneously improve their bottom lines and improve our world.

2. Twitter e-commerce will become easier.

When Twitter seamlessly integrates one-click shopping -- or in this case, one-click donations -- the world of philanthropy will change. Twitter has firmly established itself asthe global town square; it's the place the world goes to hear -- and talk about -- what is happening in the world. Once Twitter incorporates simple in-stream payments, it will allow non-profit organizations with compelling content to very rapidly gather small donations. When these donations are centered on self-organized teams or life events, this fundraising approach will become even more effective. Now those gathered in the global town square will be able to take collection action -- immediately.

The nonprofit organization charity: water has mastered this marketing technique through their birthday crowdfunding platform, but their work, and the work of others, will be more effective when it takes only seconds to make a donation directly from your Twitter feed.

Additionally, imagine the implications of this when a major global humanitarian crisis or natural disaster occurs. Millions of people will instantly donate to relief efforts. In other words, we're going to see the rise of an online army for good.

3. Crowdfunding options for non-profits continue to grow

4. Smart non-profits will deepen their reliance on social media for reporting and marketing.