Note from Beth: December is a time when start to reflect on the past year and future online trends for fundraising. The term “Sharing Economy” came to my attention two years ago after attending the SHARE conference in San Francisco and there were some implications for philanthropy. If you want a good overview of the Sharing Economy from a nonprofit perspective, read these two posts from TechSoup, Why Nonprofits Are Needed in the Share Economy and Nonprofits Imagine A Better Sharing Economy. I think of GivingTuesday as a great example of a sharing economy fundraiser. When Robert Wu told me was thinking about the Sharing Economy and fundraising practice for nonprofits, I could not resist publishing his excellent post.
Insights The Sharing Economy Tells Us About The Future Of Fundraising By Rob Wu, CEO + Co-founder of CauseVox
The internet and 24/7 connectivity to the world around us have changed our relationships with people, businesses, and nonprofits in ways we couldn’t have imagined just a few years ago.
Today, the ways in which we eat, drink, shop, and travel are shaped by companies like eBay, etsy, Airbnb, Craigslist, Uber, Lyft, and Yelp (to name just a few). In fact, it has now become normal for us to “outsource” tasks, sell, and share goods and services all within our own social circles.
Economists refer to this as a “sharing economy”, or one that is based on peer-to-peer transactions. Naturally, our buying behaviors have radically changed as a result of this trend. Now, instead of relying on brands to market to us as consumers, we’re using the influence of friends and family to make decisions.
At CauseVox, a leading peer-to-peer fundraising platform for nonprofits, we believe this shift pours over into the work we do as fundraisers and nonprofit leaders too.
Over the years, we’ve observed over 50,000 campaigns and have seen how behaviors are changing, with more people than ever before donating to worthwhile causes because their friends and family are asking them to.
As fundraisers, we need to understand this shift and change how we look at fundraising, reaching new donors, and engaging our current supporters.
Here are 6 things the sharing economy tells us about the future of fundraising.
1: Relationships Matter
In a sharing economy, it’s not about the transaction, it’s about the relationship.
People don’t just choose Airbnb because it’s cheaper or more convenient. They choose it because hosts are authentic and local. It’s an experience different from that of a cookie cutter hotel chain, with more of an emphasis on the human connection than a business one. In the end, personal service often results in positive reviews, recommendations, and another visit down the road.
Likewise, as fundraising professionals we must continue building relationships with those supporting our causes, ensuring that they’re given a top-notch experience and a reason to continue that relationship into the future. You can do this by:
- Asking your donor to connect on social media and through email
- Get to know your donor on a personal level. Note birthdays, family members, and employment.
- Personalize all communications, even if it’s an informal email
- Reach out unexpectedly, just to say “thanks!”
2: Recommendations Are Key
People choose to buy because of recommendations and they also choose to give because of recommendations.
When’s the last time you made a purchase without checking Amazon for reviews? It’s something most of us do almost absent-mindedly today. And the same goes for philanthropic recommendations. When a Facebook friend posts about a family or cause that needs support, we automatically give that cause weight.
According to research done by Mason Academic Research System, 85% of donors prefer to be asked by friends and family to make a donation. We inherently trust the recommendations of our friends over advertising and promotional promises of businesses or nonprofits.
Moving forward, ask your donors to rate your organization on social media or provide a donor testimonial.
3: Donors Hold Power
All of us have access to our own communication channels (social media platforms, email, recommendation sites, etc.) Through these avenues, we tell people what we love, like, and when we’re dissatisfied. These channels have shifted power from the nonprofit to the donor.
Depending on their experience, donors can become your biggest fans or your worst critics. Therefore, it’s necessary to keep your donors happy and engaged through year-round retention efforts.
In the end, it all boils down to investing in your donor’s experience for both retention and referral purposes.
4: An Even Playing Field
Car-hailing apps like Lyft and Uber have given the average Joe access to the luxury of a private car service. And when it comes to philanthropy, the sharing economy provides everyone with the same access.
Instead of focusing on large corporate accounts or the wealthy, private drivers have capitalized on the opportunity to serve the average person. Nonprofits can also be the “drivers” in a sharing economy. So, instead of targeting the same corporations and major donors as everyone else, you can empower just about anyone to become a donor, regardless of their wealth or other factors.
This even playing field expands your donor pool and ultimately increases fundraising opportunities for your nonprofit.
5: Collaborative Storytelling Sells
One of the biggest changes in fundraising is a shift away from a singular message and narrative controlled by your organization. In a sharing economy, your story and the way it’s told is not completely under your control. Instead, your supporters are empowered to tell your story in their own, personal way.
As the power and influence of a sharing economy continues to grow, you’ll need to relinquish control of your messaging and turn your audience into storytellers. But this isn’t a bad thing, I swear!
Collaborative storytelling brings an authentic and human lens to your nonprofit’s story—making your story more impactful and driving more awareness and reach to your nonprofit.
Ideally, you’ll want to give your donors space and the opportunity to share their story, such as through a peer-to-peer fundraiser or on social media.
6: Maintain a Human Connection
With the sharing economy, human connection and community are the primary drivers that promote action.
Traditional direct response marketing such as list buying and mass email marketing, though sometimes effective, don’t promote the personal connections that are so essential in a sharing economy. Instead, nonprofits must focus on people-based fundraising, such as crowdfunding and peer-to-peer fundraisers.
By creating their own fundraising goals and personalized fundraising pages, and then sharing them with their networks, your supporters are becoming even more entwined into the fabric of your organization.
People-based fundraising techniques give your passionate advocates a voice and an active role in the success of your cause.
The sharing economy is here and businesses and nonprofits of every size, shape, and affiliation are beginning to adapt. As you craft your fundraising plans for 2017 and beyond, prioritize people and relationships, and the rest will fall into place.
Remember, we’re not just buying and selling in this sharing economy. We’re also promoting change and sharing our passions with those closest to us, helping to make the world a better place.
The way we fundraise in this new hyper-connected world must shift.
How have you seen these shifts in behavior affect your nonprofit’s fundraising? In 2017, How do you plan on leveraging the nature of how people choose and invest in causes?
Rob Wu is the CEO of CauseVox, a crowdfunding and peer-to-peer fundraising platform for nonprofits and social good projects. Rob has raised over $200,000 for his own social good crowdfunding projects, and his work has been recognized by the Mayor of Austin and featured in the NYTimes, CNN, Christian Science Monitor, and WSJ.
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