Microphilanthropy is changing the face of charity

(Note: this is my column on microphilanthropy, which appeared in USA Today last week. This is a taste of what will be covered in my forthcoming book on money)

by Laura Vanderkam

Picture two scenarios. The first: You could give $50 to a charity that you know, vaguely, helps people with disabilities.

The second: You log on to ModestNeeds.org, a non-profit that helps people with one-time bills, and find a request from a former saleswoman suffering from multiple sclerosis. After losing her job, she burned through savings until she qualified for disability benefits. Now, “things have, physically, deteriorated to the point that I need assistance getting in and out of a (tall!) tub in order to take a shower,” she reports. “Of all the things I have had to adjust to, this has been right up there with the worst.” She needs $1,700 to convert her tub to a walk-in (and someday, wheel-in) shower. Your $50, banded with other contributions, will help her.

Which scenario makes you more excited to give? If you picked the second, then you’ll understand why donors quickly funded this recent request from New Jersey resident Marilyn Assenheim, 58 — and you’ll understand the appeal of microphilanthropy in general. Broadly defined as direct interaction between individual donors and projects (with non-profits usually verifying cases and facilitating donations), microphilanthropy — typified by groups such as Modest Needs, DonorsChoose.org, or GlobalGiving — is growing fast. Here’s the reason: In a world where people post complaints about companies on Twitter, and hear back in minutes, writing a check to charity and forgetting about it doesn’t feel right. People want to have a say in where their money goes and know they are making a difference. Thanks to technology, they can. Not only is this trend more fun for donors, it’s good for non-profits overall, since when people know more, they give more — even when times are tight.

Active donors

Of course, long before the era of social media, charities have tried to connect people. When I was growing up, for instance, my family donated to the Christian Children’s Fund, which sent us letters from children in Thailand who benefited from its programs. Most of us are happy to help a neighbor with a specific need, and so smart non-profits have always tapped this impulse by broadening the answer to the question of “Who is my neighbor?”

Until recently, though, truly connecting with neighbors in different communities or across the globe has been a complicated process. I remember letters from Thailand arriving on light-weight paper to keep the postage bill under control. Now, you can get regular Facebook updates on what your international friends ate for breakfast. So, if you are charitably inclined, why not choose your own clean water project to fund in, say, Tanzania, and ask for updates along the way?

“There’s a lot of evidence that this generation is used to instant access to information,” says Ken Berger, president of Charity Navigator, a non-profit watchdog. “They want more direct involvement, to be empowered in the process, and to see results more directly.”

“Real” philanthropists like Bill Gates have always gotten this kind of feedback. These days, $50 donors want it, too — to be treated like board members, able to choose their projects and learn about the results.

So in 2000, Bronx high school teacher Charles Best founded DonorsChoose.org, which lets teachers request funds for classroom projects online. In 2001, two former World Bank executives launched GlobalGiving, where donors can contribute to non-profits running international (and domestic) projects that appeal to them. Keith Taylor, a former college professor whose boss helped him when he faced eviction in grad school, founded Modest Needs in 2002. In 2005, microfinance organization Kiva began allowing people to contribute toward no-interest loans to entrepreneurs around the world. Featured when I looked at the site recently? Godfrey Lwebuga of Uganda, who wishes to purchase more chickens for his poultry business. Citizen Effect, which asks individual “citizen philanthropists” to take on larger fundraising goals by tapping their networks, launched in late 2009.

“Here to stay”

These organizations have experienced “phenomenal growth,” says Berger; according to Charity Navigator, from 2004 to 2008 (with slightly different fiscal years), Modest Needs grew from $194,379 to $2.7 million in revenue,GlobalGiving grew from $508,653 to $7.4 million and DonorsChoose.org grew from $2.8 million to $18 million.

“Clearly they are here to stay, and are part of the landscape of how people are served by non-profits,” Berger says. While these non-profits retain the right to direct funds more broadly, they usually do follow donors’ wishes, and always offer follow-up. This transparency, he notes, has pressured the whole non-profit sector to step up its game.

That’s good news, because there’s evidence that this increased engagement has paid off in making the non-profit sector somewhat recession-resistant. Though large charities (particularly universities and those reliant on stock gifts) saw donations drop sharply between 2008 and 2009, Giving USA reports that, overall, individual charitable donations were off less than half a percentage point.

When you get to hear the whole story, helping people is addictive.

Certainly Marilyn Assenheim’s tale is compelling. Asking for help was hard, she tells me, but so was getting in and out of the tub, and so when she learned she’d been approved, she was “excited, shocked, thrilled.” In a thank-you letter to the donors who funded her request, she wrote, “The fact that you’ve gone out of your way, perhaps by sacrificing something you might have wanted yourself in order to do this for me, is humbling beyond words.”

Who wouldn’t want to read a note like that? No wonder, founder Taylor reports, that 70% of Modest Needs recipients eventually become donors themselves.

Laura Vanderkam, author of168 Hours: You Have More Time Than You Thinkis a member of USA TODAY’s Board of Contributors.

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