Data & Transparency – Manifesting a Win-Win Future in Nonprofit Fundraising

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Similar to the rise of ecommerce and online banking in the decade before it, online giving is growing at a steady pace and well positioned to become the predominant fundraising medium of the future: By 2025, the global crowdfunding market could reach between $90 billion to $96 billion.

Many factors are contributing to the growth in the crowdfunding space, but chief among them is the online nature of the process: 7.4% of retail sales happen online and 7.1% of giving happens online.

As consumers increasingly gravitate to online sites to do everything from manage their personal finances to shop for everyday items, they’ve grown to trust online processes as much (or more) than offline ones.  

Why? Because online processes – especially those involving financial information – are designed to be more attributable, trackable, and data-driven than paper-based ones. That benefits consumers and donors (who care about what happens with their money) just as much as it benefits the retailers, institutions, and fundraisers on the other side of a transaction. And the benefits of online fundraising for nonprofits especially are just beginning to emerge.

Embracing Technology to Power Improvements

As ecommerce retailers already know, with data comes a wealth of high-value opportunities in marketing, reporting, and – most importantly – information-sharing. When leveraged to full effect, data breeds transparency… a quality that is often lacking in nonprofit fundraising and operations.

Seeing clearly into the nonprofit sector has been, and still is, very difficult – on either an industry or organization-by-organization basis. Even if you lead or manage an organization, it can be difficult to drill down to the specific financial details of a nonprofit’s efforts across its acquisition of donor funds; it’s spending on overhead costs; its expenses related to goods procurement and fulfilment; and its allocation of man or woman-hours (volunteer or staff).

While a GuideStar or 990 report may provide a 30,000-foot view of an organization, understanding the spending in more targeted focus areas can be challenging for executives, donors, and foundations alike. There’s a wealth of information and data housed within nonprofits’ various accounting buckets, but the data doesn’t lend itself to extrapolation or assessment – creating ambiguity around spending and fund allocation across the entire sector.

Yet looking to ecommerce brands, retailers and other online companies shows us what rich data has afforded other sectors: innovation – powered by higher quality intelligence – and enhanced efficiency. Data-driven internet companies are constantly optimizing their processes and systems, lowering overhead spend, and working to better serve their customer base. Nonprofits may want to do those things, but they’ve yet to embrace the technological infrastructures that support that kind of operational improvement.

In order for nonprofits to make better decisions and plan for their financial future, they must embrace those technologies and solutions that address the “bigger picture” by helping them monitor trends, improve capacity planning, and drive long-term growth.

Ultimately, it’s for the benefit of the industry at large: Legacy systems and point-based technologies won’t solve the deeper challenges within the nonprofit sector. To aggregate information on a holistic level, stakeholders across the market will all have to embrace new systems designed for across-the-board improvement.

Best Practices for Bolstering Transparency through Tech

It’s time for nonprofit executives to ask themselves how committed they are to the sector itself – not just to their own organizations – and whether they’re willing to invest in the technology necessary to drive genuine improvement across the nonprofit space. And as they seek out new solutions, the following are key points to keep in mind.

Think Long-Term About Costs: Especially in large organizations, “analysis paralysis” often sets in when it comes to making big decisions – and technology selection is a very big decision. Executives are particularly prone to sticker when it comes to picking new systems, but looking at fees and up-front costs with a short-term, sunk-cost mindset is the wrong approach.

The key is to view new technologies as an investment, and to make sure ‘ROI’ is top-of-mind. Keeping costs low is an important part of managing a nonprofit, but it should never overshadow the long-term value a new solution can present to an organization (and to the sector as a whole).

Beware the ‘BYO’ Alternative: Many nonprofits avoid contracting with crowdfunding platforms or optimization technology providers because they think they can go BYO (i.e., ‘Build Your Own’).

Yet creating your own system is easier said than done, even for the best-staffed and most technologically savvy organizations. No internally developed solution can match the level of sophistication and integrated feature set available from a company that has built their platform specifically around the needs of nonprofits.

Bigger Doesn’t Always Mean Better: In work and in life, we have a natural tendency to stick to what we know – but that can work against even the smartest executives when they seek out new solutions.

The name recognition or perceived ‘status’ of a technology provider doesn’t always equate with the value afforded by their technology. Partners that are ‘leaner and meaner’ can at times be more flexible to client needs, providing greater cost savings long-term.

Seek Solutions (Not Tools) from Partners (Not Players): The key to a major technology decision shouldn’t be to solve your immediate problems – it should be to drive long-term improvement and data-driven evolution of your operational processes.

Avoid the impulse to ‘think small’ by working with a company that simply checks the boxes of your short-term must-haves. The key is to seek, and select, a long-term partner that’s as committed to nonprofit progress as you are committed to the cause your organization serves.

Bettering the Business of Giving

My company, 121Giving, is committed to helping nonprofits ‘better the business’ of giving through the power of transparency. 121Giving is a partner to community agencies offering nonprofits discounted products and powerful crowdfunding tools so that they can impact more lives.

We partner with civic-minded organizations and capacity-building leaders to help nonprofits scale their operations and help organizations expand their giving activities. In addition, we partner with brands by delivering a strategic sales channel and consumer engagement platform that empowers companies to do well by doing good.

121Giving enables donors and nonprofits to increase their reach, magnify their purchasing power, and amplify their connection to the causes they support. Nonprofits can start building their wish lists and get exclusive deals by signing up for a free account on the 121Giving platform.

Our ultimate goal is to drive improvement across the space by empowering every organization with the tools to better serve their donors, causes, and staff. For more information, go to 121giving.com and learn more about how to get involved as a donor, nonprofit or brand/supplier.  

About Mark Courtney

Mark Courtney is a social innovator and servant leader who has made a career for himself out of his vision for solving social issues, combined with his extensive enterprise solutions background. With more than 17 years of consultancy, technical solutions management and development, Mark saw the need for a disruptive eCommerce marketplace and product crowdfunding platform, 121Giving, to steer nonprofit organizations into bettering the business of giving.