How online activist groups are raising millions to keep corporations in line
When activists are fighting corporate misbehavior, a million dollars can go a long way.
With that cash in hand, online activist network SumOfUs.org recently reported a successful summer of crusading “for people over profits.” In three months’ time, it helped persuade Delta and other airlines to stop shipping hunting trophies, lobbied officials to charge Nestle more for the water it draws from public lands, and helped get Standard Chartered Bank to cancel its financing of Adani’s giant Australian coal mine.
How did SumOfUs raise the money needed to achieve all this? It tapped into the power of the crowd, pooling the pocket change its millions of members donated through simple forms tacked onto the end of campaigns.
And it’s not the only one. Whether you call it “cause-based crowdfunding” or “micro-fundraising,” today’s largest networked advocacy groups have made this strategy a powerful means to sustain the work they do. Given the scale of money raised directly from young, idealistic donors, this new model is a game-changer for corporate advocacy and nonprofit fundraising alike.
It may come as a surprise, then, that many of these groups started out as online petition networks, which were not so long ago dismissed for encouraging lightweight and ineffectual “clicktivism.”
Avaaz.org, which aims to “bring people-powered politics to decision-making everywhere,” started hosting cause-based petitions in 2007. With each petition that went viral, the organization’s member base eventually grew from about 2 million in 2010 to more than 40 million today. That growth has resulted in Avaaz becoming a leading advocacy network for policy change and rallying help for humanitarian causes.
SumOfUs was also petition-based, but arrived on the scene in 2011 with an even more radical agenda: focusing almost exclusively on campaigns to stop rogue business practices.
In spite of what critics had to say about the small scope of online activism, these petition networks used the momentum of their campaigns to drive protests and real-space happenings around their most popular causes. Through extensive testing of their appeals and integrating efficient donation forms into their petition pages, they became crowdfunding powerhouses.
There’s now growing recognition in the nonprofit fundraising world that Avaaz and SumOfUs are onto something.
According to online fundraising expert Beth Kanter, both groups are perfect examples of what she calls “networked nonprofits.” They have succeeded, Kanter believes, because they have mastered the art of messaging to younger audiences and driving them to donate via social media.
“While older donors don’t trust social channels, millennials are frictionless donors and buyers,” she tells Mashable.
Acting collectively, millennial donors have proven a steady and stable source of revenue for both organizations. SumOfUs currently draws 85% of its $4.7 million budget from small member donations, with only 15% coming from charitable trust grants. Avaaz operates on $20 million per year, and is 100% funded by microdonations.
By raising funds directly from motivated donors, Avaaz and SumOfUs have also bought themselves considerable freedom. They’ve avoided what Kanter calls “the trap of big donors and big donations” — the subtle strings attached to large grants and what groups can and cannot do with the money.
“For us, it means that no corporate target is off limits if they’re behaving badly,” says Jon Lloyd, fundraising and campaign director at SumOfUs.
The group’s recent hits include a handful of companies such as Starbucks that, according to the Union of Concerned Scientists, were purchasing unsustainable palm oil.
SumOfUs is also targeting Turing Pharmaceuticals — which continues to make headlines because its founder, hedge fund manager Martin Shkreli, jacked up the price of an affordable AIDS drug — as well as the global accounting firm KPMG, which the Canadian Revenue Agency has accused of helping wealthy clients dodge taxes.
Though generally less confrontational, Avaaz doesn’t shy away from waging campaigns that target corporate practices. It notably supported a series of worldwide protests against biotech giant Monsanto, condemning the company’s attempts to patent the genetic code of everyday vegetable varieties. In Argentina, an Avaaz-assisted campaign was even successful in blocking the construction of a Monsanto factory.
Avaaz’s chief operating officer, Heather Reddick, credits this freedom to its member-supported model. It allows the organization to “campaign where we want, with whom we want and on the issues our members care most about — without worrying about losing major donors,” she says.
Small donations from supporters have helped these groups avoid the limits of non-operational funding, too. In the voluntary sector, this lack of support for an organization’s everyday expenses creates what the Stanford Social Innovation Review has dubbed the “nonprofit starvation cycle” — when nonprofits can barely afford to function.
But while this emerging fundraising model has become undoubtedly enticing for nonprofits watching from the sidelines, several respected names in the field have expressed words of warning.
Craigslist founder Craig Newmark, for one, recently compiled research that shows nonprofits raise only $10,000 on average through crowdfunding campaigns — hardly a drop in the bucket when it comes to many organizational budgets.
Henry Timms, founder of #GivingTuesday, also advises caution when it comes to new online campaigns.
“Though these funds can be fast and flexible, they can sometimes be fickle,” Timms tells Mashable. “The right ecology for most organizations will be a blend of new and old power funding streams, neither overly dazzled by the new, nor overly critical of the old.”
Despite their apparent success at doing so, even SumOfUs and Avaaz admit there are tensions when raising money from millions of members.
“Members are our bosses,” Reddick says. “We have to bring them great ideas to fund. If we don’t, the community will let us know, and we won’t run the campaign or the fundraiser.”
For Lloyd, however, those challenges mean a healthy exercise in sticking to the mission.
“There’s something quite democratic about the model of microdonations,” he says. “It keeps us focused on the issues that our members care about.”
As millennials grow older and become an increasingly important donor base for all nonprofits, we can expect to see a lot more cause-based crowdfunding efforts in the near future. And that means these organizations may be free to do even edgier and more uncompromising work — just the way their new “bosses” like it.
Originally published at mashable.com on November 29, 2015.