Charities are finding it increasingly difficult to raise the money they need. Changes in tax laws certainly have had an effect, but the biggest adjustment is merely the march of time. Think about it: how do most nonprofits raise money? They have an annual fundraiser—some big event where well-heeled, high-networth individuals are wined, dined, or entertained for a check (hopefully a really big check).
I know this because I have been to these events and have written those checks. I’m not that well-heeled, but I have written more than one five-figure check. The problem is, I’m a Baby Boomer, and like millions of other Boomers, we are getting older and dying… like at the rate of 10,000 a day. There’s your happy thought of the day!
Seriously, the aging and passing on of the Baby Boomers has put a real dent in the fundraising efforts of thousands of charities. The number of eligible attendees at fundraisers is dropping, and there are not enough donors to fill up the top of the funnel. Of course, there are plenty of other humans on the planet who could fill that role: Gen X, Millennials, and Gen Z. As it turns out, these generations seem to be predisposed to want to help; they are extremely generous and want to do good. There’s only one problem: they don’t write checks. Meaning, they physically don’t have a check to write, and the vast majority of charities don’t have an effective fundraising tool specifically designed for younger generations.
This brings us to an innovative company based in Atlanta, called Softgiving. Full disclosure, I am on the board of directors of Softgiving, which has created multiple services that focus on providing Donor Driven Organizations (DDOs) with innovative fundraising tools designed for younger donors. The brainchild of Matt Pfaltzgraf, Softgiving has risen from a few small charities in the South to now providing services for the likes of WorldVision, CARE, and Ronald McDonald House, just to name a few. Matt’s personal story is compelling: raised by a single mother, he and his brother benefitted from the services of the local Boys and Girls Club in Des Moines, IA. Now, years later, Softgiving is helping local Boys and Girls Clubs raise money.
Their services range from change donations from everyday purchases, to corporate sponsors “matching” donations. Consider this example from a financial services perspective: a local charity, let’s say the Humane Society, is the customer of ABC bank, and they say, “If you sign up with Softgiving to donate change to the Humane Society using our bank-branded card, we’ll match your donation up to x number of dollars.” Think about this for a minute: both parties win. The Humane Society is getting more money raised, but from the FI’s perspective, they have now used their match to encourage people to get their bank-branded card. It isn’t hard to see how the charity might encourage its patrons to get those bank-branded cards, since it would increase their donations. So, the bank wins by increasing card penetration while at the same time providing an extremely valuable service for that charity. Think the Humane Society will shop its CDs for better rates next year? Not a chance. ABC Bank has just become a strategic partner. As far as the matched donations, the bank gives out plenty of charitable contributions each year already, but how many of those donations generate even one new card account?
Of course, this is just one example, and any business would benefit from implementing a Softgiving match program. The charities are benefiting from increasing donations and add to their donor pool without cannibalizing their existing fundraising mechanisms. The change program rounds up for everyday credit or debit card purchases, and once that amount reaches a certain threshold, creates a debit to a debit card or a charge to a credit card. The individual amounts are so small they are hardly noticed, but in the aggregate, someone using Softgiving may donate $75 in a year’s time; these are the same people who would never go online and make a $75 donation. Best of all, Softgiving places the control in the hands of the DDOs. Unlike numerous other mobile apps that pretend to allow for change giving, if you want to change your donation to the Humane Society, you call them and cancel your change donation. This allows the DDO the chance to save that donor, instead of them just moving a donation away with the click of a button.
Softgiving is an innovative way to empower DDOs to raise more money and increase active donors. Every business needs to examine the ways it has done business in the past and ask, “Are my future customers going to act the same as my current customers?” If the answer is likely “no,” then what are you going to do to change the future of reduced customers and lower revenue? Don’t expect you can just remain in status quo mode and everything will somehow magically turn out okay. Start thinking innovatively about the future of your customer base and revenue stream, and start now.
If you are a DDO or a company that would like to match DDO donations, you can find out more about Softgiving here.