Fundraising in the age of P2P
By Dan Illouz
The world is changing and so is the world of philanthropy and fundraising.
P2P (peer to peer) technology has revolutionized various sectors by cutting down the middleman and allowing people to directly interact between each other and provide good and services to one another.
AirBnb revolutionized the tourism industry by connecting between real estate owners and tourists and providing an alternative to hotels. Uber connected directly between drivers and their clients thus making taxi companies superfluous. Etsy connected directly between artists, collectible owners and artisans and their potential buyers.
An important distinction must be made. In the fundraising market, the term peer to peer has been used to describe the ability of charities to use their supporters to fundraise for them, by making them not only donate but also reach out to their friends to donate. In this article, the term peer to peer is used in the way it is used in other markets, a term that signified removing middlemen and allowing for more direct interaction between the consumer and the creator of the product or the service provider.
In every market, the world has moved to peer to peer as customers asked for ways to connect directly with their producers and cut down middlemen. The donations and philanthropy market is no different.
Even back in 2014, as published in this blog, we already had indications that “high net worth donors are likely to give to a specific project since they don’t trust well-meaning professionals or entrenched lay leaders to decide how best to use their money.”
This trend is a serious challenge to Jewish and Israeli charities and fundraisers whose traditional source of funding have declined. In effect, according to JFNA’s own data, between 2010 and 2012, total giving to Jewish Federations nationally fell from $925 million to $900 million.
In parallel with the rise in demand for opportunities to donate directly to projects and charities and for the removal of the middlemen which has often lost the trust of donors, technology has evolved and encouraged this very possibility.
The rise of social media that now dominates our lives has led to the creation of crowdfunding websites that make viral campaigns a central part of the fundraising world. Charities and organizations today must make digital marketing and online fundraising a central part of their fundraising strategy.
According to the M+R Benchmark study, online giving increased by 13% in one year in 2015. Crowdfunding websites have become a central tool for nonprofits and there are very few nonprofits that today do not offer a way to donate easily online. Amongst younger people, this trend is even stronger.
The meeting point between the demand of philanthropists for direct donations and the technological supply enabling this is happening now.
The Jewish philanthropic and charitable community must understand these trends in order to stay relevant. We must empower private donors and provide platforms that allow them to choose exactly where their money goes.
In parallel to the continued investment in traditional fundraising techniques, new channels must be opened for the new generation to keep donating as their parents once did.
Only through the creation of such channels can we ensure that as the more traditional forms of donating become less attractive to a new generation of philanthropists, they will find alternative ways to donate rather than just leave the circle of donations completely.
The Jewish community has been, in the past, a model for communal fundraising. This has been true on a local communal level and on an international level, with a specific focus on fundraising for Israel and Israeli charities. In parallel, the Jewish nation is also known for its innovative spirit, with Israel’s status as the startup nation being the most obvious representation of this.
It is time for both of these aspects of Jewish identity to come together, and for the Jewish community to lead the way in the development of cutting edge technology allowing for direct donations to charitable projects, while ensuring full transparency and accountability by the leaders of those charities and projects.
Dan Illouz is the Manager of International Relations at Jgive.com, a new platform connecting between donors and Israeli charities.