Lessons From Social Finance: Can Impact Giving Save Philanthropy?

2 Minutes Posted on:


Only 7 percent of Americans plan to reduce their charitable giving, while 25 percent say they will increase it. Yet less money is flowing into charitable projects. 

During these more challenging times for fundraisers, the philanthropy community can learn a lot about donor engagement and high-impact giving from mobile apps. 

Lessons From Social Finance 

The philanthropic agenda has rapidly transformed in six months. Coronavirus and racial equality causes dominate the agenda. Unemployment is high, and urgent health issues need funding. Against this backdrop, from March to May, 13 percent of nonprofit-sector jobs were lost. 

The social finance model makes up for this resource gap by shifting fundraising responsibilities to the donors. Leaner fundraising organizations are putting donors in charge of their giving by making giving transparent, empowering, and engaging.

Transparent Philanthropy 

Distrust of charitable organizations is a major reason donors do not give. Under the old model, donors would have no say in where their money went, even at the country level. They would donate to an organization, and then program managers would then decide how the money would be used. 

Donor-friendly apps, on the other hand, allow donors to follow every aspect of a fundraising campaign. Videos, photos, and live chats then let them see their money at work. Charitable organizations are under more scrutiny to increase the efficiency of giving.

Empowering Philanthropy

Making donor fund allocation transparent at each stage and level of the giving process was the first step. The next step is to allow donors to take action. In the past, large administration arms would make inefficient use of the funds. 

Ultimately, 15 percent of donations are wasted and make no direct impact on the causes the donor seeks to support. When participating in impact giving, donors are empowered to decide where to allocate their money. They can do the following:

  • choose specific programs within campaigns to donate to
  • participate in different types of crisis responses (e.g., an emergency, a sudden funding shortfall)

This empowerment incentivizes donors to give more.

Engaging Philanthropy

Corporate and community philanthropic entities operating in local communities can learn a lot from this model, according to philanthropic consultants like Michael Sobota. Donors are more engaged in these communities. Transparency and empowerment, therefore, have a higher motivational impact on willingness to participate in local social causes. Managing fundraising and giving so that it creates both a social impact and economic return is the very definition of social finance.

• Tags: • 405 Words

About Me

Businesses: The Landscape is Changing There are millions of small businesses in America. Many don't have a brick-and-mortar establishment, but instead their operations take place in someone's home or via the internet. The business world is changing quickly in this regard. More and more businesses are embracing technology and the internet to keep operating costs low and market to new populations. This is a trend to keep an eye on whether you currently own a business or are thinking of opening one in the future. There's a lot to learn, which is why we created this blog. The articles here will shed even more light on business in today's world.

Search

Categories

Tags