The power of micro-donations
The number of natural disasters and escalated conflicts has significantly increased over recent years. Financing from traditional sources is no longer sufficient to cover humanitarian relief operations, and funding gaps are reaching threatening levels.
Looking ahead, the widening gap between the number of affected people and sufficient resources will be the greatest challenge facing the humanitarian system.
For 2017, the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) estimated that $23.5 billion in humanitarian funds would be necessary to support 101.2 million people in 37 countries. But, by mid-year, a mere $3.5 billion had been mobilized, leaving a frightful funding gap of $20.0 billion (85%) to be mobilized before the end of the year. In analyzing fundraising records from past years, it becomes evident that traditional fundraising is no longer sufficient. We need to radically change the way we fundraise for humanitarian relief aid, experimenting with and capitalizing on innovative fundraising methodologies.
The power of crowdfunding and micro-donations
Crowdfunding from public sources is emerging as a promising alternative to complement traditional fundraising efforts. ‘Donation-based crowdfunding’ or ‘crowdsourced philanthropy’ draws people together behind a belief, a project, or an emergency to share resources and contributions. Crowdsourced philanthropy provides a socially connected method, not only to raise life-saving funds but also to create awareness of and loyalty to a certain cause. Donation-based crowdfunding is particularly successful as it provides us with the feeling of being part of something bigger, a feeling of community, participation, and ownership.
The GoFundMe crowdfunding platform has raised 3+ billion US dollars since its launch in 2010.
Micro-donations (donations between $0.25 and $10) are the latest and most disruptive innovation in the world of giving. As we don’t usually think twice about giving such small amounts, micro-donations are an effective method of fundraising and are expected to play a significant role in the future. As they add up, micro-donations can make a true difference.
Mobile technology and micro-giving go hand-in-hand. Micro-donations have tremendous potential for charitable fundraising from the public, especially combined with mobile giving technology allowing us to give directly from our smartphone. With a target audience of 3.5 billion mobile internet subscribers and smartphones users globally.
In the past, a major obstacle of micro-donations had been high credit card transaction fees of $0.30 per transaction. However, as technology in mobile payment methods continues to advance, credit card transaction fees have significantly decreased, making it now possible to donate as little as $0.25.
Micro-donations also represent a new way of democratizing giving, especially at the grassroots level. Allowing each and every person to support causes they care about, micro-giving will shift the charitable giving landscape. We all enjoy feeling that we can make a real difference in another person’s life or that we can help someone in desperate need.
After the 2010 earthquake in Haiti, more than $30 million in mobile donations were pledged through SMS.
People are more likely to donate money if there’s an easy way to do it.
Through easy-to-use smartphone apps, the act of giving can be further simplified and made more convenient for donors on the go. With the help of existing technology, donating can be as easy as a tap on your smartphone. Following the introduction of ApplePay for charities, making a mobile micro-donation had never been easier. Platforms like ShareTheMeal, Google One Today, and Spotfund show how micro-donations can make a difference. ShareTheMeal has collected more than $8.5 million in donations since its launch less than two years ago.
Micro-donations can rapidly mobilize resources during emergencies
In the field of humanitarian emergency relief, donation-based crowdfunding through micro-donations can rapidly raise lifesaving support to help victims of natural or man-made disasters. As pictures of a disaster are broadcast on TV and social media, the public commonly sympathizes with those affected by disasters. Providing the public with a tool to translate their sympathy into action by making a small donation, crowdfunding can raise life-saving funding in the all-important and determining early hours after a disaster has struck.
As international funds are often only released in the days, weeks and months following a disaster, micro-donation crowdfunding can play an important role in bridging the time until international funds are released, covering expenses for life-saving early-recovery operations.
Major challenges
While the concept of micro-giving virtually looks like the ultimate solution to the gaping humanitarian funding gap, a number of technical and logistical challenges still remain.
- Timely transfer of donations. While crowdfunders can be launched within minutes — and donations collected within hours — the vetting of trust-worthy implementing actors on the ground, as well as the bank transfer of donations to recipient organizations, can take days.
- Required number of donors. To actually mobilize substantial amounts through micro-donations, thousands of people (often even hundreds of thousands of people) need to be reached and invited to make a donation to the fundraiser. Social media plays a significant role, and users have to be convinced to share and spread the fundraiser on social media with colleagues, friends, and family.
- Over-representation of most recent humanitarian emergencies.Fundraisers are commonly raising more funds for immediate relief aid for the most recent humanitarian emergency, rather than for protracted and underfunded crises that are often forgotten by the public, or for long-term recovery and disaster resilience efforts. Dedicated fundraising efforts for underfunded long-term humanitarian emergencies during giving-related holidays (i.e. Giving Tuesday, Eid, Christmas) can be a way to create additional awareness and to raise funds for those ‘forgotten’ emergencies.
What’s next?
Micro-donations are a powerful tool to engage the public and to raise significant amounts during a very short amount of time. For humanitarian relief operations, micro-donations can raise significant amounts to finance early recovery operations, often days or weeks before funds from traditional donors arrive. They therefore complement, rather than substitute, traditional fundraising.
The combination of micro-donations and app-based mobile giving has been proven to have tremendous potential. Some experts refer to app-based micro-donations as ‘the future of philanthropy’.
OneRelief is very excited to be part of that future, collecting micro-donations for humanitarian relief aid. With the OneRelief App, with as little as one click you can donate to disaster relief operations and make a big difference. OneRelief is working hard to launch the OneRelief app very soon. Sign up for launch updates here!
© Peter Prix, CEO and Founder of OneRelief. Find out more at onereliefapp.com, join us on Facebook, or follow us on Twitter @OneRelief.
