NEW YORK — Millions displaced by global conflicts. Communities reeling from unseasonably strong natural disasters. Lives upended due to healthcare inequalities.
In the middle of these crises are established nonprofits, everyday individuals and mutual aid groups — all seeking your dollars to make a difference. But with no shortage of worthy causes and the rise of new giving technologies, how should you donate?
The choices can be immobilizing for those looking to open up their wallets. Many value conventional charities. But others — Gen Z and millennials, as well as the unmarried and less religious, according to 2021 research by the Indiana University Lilly Family School of Philanthropy — like to crowdfund by pooling donations online for folks in dire circumstances.
The approaches reflect differing assessments of impact and trustworthiness. But they aren’t necessarily opposed.
“It’s really: what is the right type of support that either an organization or a community or an individual needs?” said Bloomerang Chief Customer Officer Todd Baylis, who previously co-founded the platform Qgiv to help nonprofits fundraise online. “And being able to tailor that to the individual giver.”
Here are some questions worth considering as you determine which assistance best suits your objectives:
It might come down to whether you want to make a big difference for one person or help seed large-scale change.
Tiltify is a technology platform that helps nonprofits and individual crowdfunders alike raise money. If donors want to ensure that food gets to communities recovering from disasters, Tiltify CEO Michael Wasserman says a nonprofit contribution is probably best, as established organizations already have distribution pipelines and built-up expertise.
But if you want to ensure a particular person can take care of themselves, he said, a direct donation to a crowdfunding campaign might make more sense than sending money “through a charitable funnel.”
“It really depends on what your goal is as a donor: if you’re trying to help out somebody specifically or if you’re trying to help out people in plural,” Wasserman said.
You could do both at once, according to one nonprofit that delivers cash transfers. GiveDirectly reports sending more than $860 million to 1.6 million people across three continents. Senior Program Manager Richard Nkurunziza says the idea was initially met with fears of misuse. But GiveDirectly finds that cash donations are a dignified way to empower poor people to invest in their unique needs.
In Rwandan villages, he said, recipients have spent donations on household renovations, new businesses and youth education — all of which ultimately benefit their entire community.
“There’s a bit of agency,” said Nkurunziza. “It gives an opportunity for the recipient to make a decision on how they use the funds for themselves.”
Crowdfunding could be considered “more democratic,” according to Claire van Teunenbroek, a University of Twente professor specializing in online giving behavior. That’s because donors have more control over their gifts’ usage when they choose exactly who benefits.
The disadvantage, she said, is that people with the greatest needs aren’t always the ones with the most success. Humans are prone to supporting “easily sellable” projects with highly emotional appeals. Studies have also shown racial disparities in crowdfunding.
The most popular reason donors told Bloomerang they stopped giving was because they did not trust contributions were being used wisely, according to the company’s Generational Giving Report. The second most common response was that donors no longer felt connected to the nonprofit they’d previously supported.
The answers underscore the need for recipients to actively prove their trustworthiness.
Tax-exempt nonprofits must submit annual financial disclosures to the Internal Revenue Service that include publicly available information, including executives’ salaries. Watchdogs, such as Charity Navigator, compile lists of verified nonprofits and assess their work.
Crowdfunding, while convenient, is much more susceptible to fraud. The online sites are relatively unregulated, leaving the responsibility for protection up to donors and the platforms themselves. In GoFundMe’s case, donations can be refunded up to one year after they are made. The company also advises that organizers identify themselves and their beneficiaries, and specify their plans for spending contributions.
Online users mistakenly associate high donation numbers with credibility, according to van Teunenbroek. She said risk is better mitigated by making sure the project’s description is detailed.
“For a donor, if you prefer more certainty, then traditional nonprofits are probably better because they have an established reputation,” she said.
ALSAC CEO Rick Shadyac said his charity works hard to make donors feel confident that their money is supporting the mission of St. Jude Children’s Research Hospital: improving pediatric cancer survival rates worldwide by covering the costs of care and researching treatments.
Shadyac encouraged people to give regardless of the medium and to always look for reputable causes. Bonafide charities, he said, bring “greater degrees of confidence” while crowdfunding requires more “due diligence.” But he sees room for both.
“They should actually complement each other,” he said.
“Some of this is more in the realm of micro-philanthropy where they may be wanting to help a specific individual because they found themselves in difficult circumstances,” he added. “But if you want to help kids with cancer, you want to help cure heart disease, there are charities that are keenly focused on that.”
ALSAC gets nearly one quarter of its annual revenue during the last two months of the calendar, Shadyac said, around the time of year designated as “Giving Season.” The uptick could stem from the spirit of generosity around the holidays, he added. Sure enough, a 2023 study found that people in good moods are more likely to make a charitable donation.
They might also be making their year-end tax plans.
“Not-for-profits give them the opportunity to address some things that are important to them while also getting a tax deduction,” Shadyac said.
Crowdfunding donations to individual campaigns, however, cannot be written off on your taxes. But crowdfunding can make it easier to identify with the ultimate beneficiaries of one’s gift, van Teunenbroek said.
Mutual aid refers to reciprocal support networks of neighbors who promptly meet each other’s most pressing needs when existing systems fail to make them whole. Because of those reciprocal ties, participants often describe the act as “solidarity, not charity.”
In the internet age, these groups often solicit cash contributions through online payment processors like Venmo, Cash App, PayPal or Zelle. Anyone can scan QR codes, which are usually reposted across social media accounts, to donate. The money goes straight to those impacted or helps purchase supplies for shared resources like community fridges. Transparency might come in the form of a screenshotted receipt shared by organizers on their profile.
Tamara Kneese joined several mutual aid efforts during the early days of the coronavirus pandemic to take care of her neighbors in Oakland. Kneese, a director at the nonprofit research institute Data & Society, said these groups tend to start as immediate responses to crises that are acutely hurting disadvantaged communities. The idea, she added, is that “state abandonment cannot be addressed by charitable giving alone.”
Kneese said the challenges of such bottom-up, grassroots groups are that resources dwindle and people burn out. Only so many requests can be fulfilled. Organizers’ politics clash.
The benefits, she found, are that support comes from within the community and members have direct interactions with those using it.
“It is not just a sense of charity, like you make a donation and you’re done,” she said. “There is more of a relationship involved and it is not just transactional.”
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Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.