12 digital fundraising trends for 2012 #4 Microdonations

Last November marked the first birthday of Pennies, the microdonation scheme run by The Pennies Foundation enabling UK retailers to offer their customers the opportunity to round-up the price of a purchase to the nearest pound as a donation to one of a selection of charities. The date was marked with the news that Pennies had raised just over £250k in its first 12 months, through one million ’round-to-the-pound’ donations. At the anniversary celebration the Pennies Foundation Chief Executive was quoted as saying “Clearly it’s early days, but we believe that 2012 could prove a real turning-point for microdonations” and their confidence can only have been added to with the news earlier this month that they had passed 1.5 million donations and £366k by the end of 2011.

Incase you haven’t come across the term before, in this context ‘microdonation’ is a low value donation ’embedded’ into activities or transactions that consumers are already undertaking. This type of fundraising is certainly nothing new but the growth in payment card use for ever lower value offline transactions, combined with the massive growth seen in ecommerce, is seen as offering the potential of a significant new voluntary income source based on a small proportion of the countless millions of transactions that happen every day having a small donation attached.

Certainly the UK Government believes that microdonations have real potential, with specific mention of it in their Giving White Paper released in May 2011 to showcase a range of initiatives aimed at helping stimulate a step-change in giving in the UK. In this they highlighted what they called ‘Round Pound’ schemes, such as Pennies as a key way to make it easier to give and “help overcome some of the biggest barriers to giving such as lack of spare time or money”.

By my reckoning, there are currently three different types of fundraising which seek to encourage embedded micro-donations in slightly different ways:

  • Affiliate Buying Schemes – where rather than you making a donation, a proportion of the affiliate premium earned by the shopping portal site you have chosen to shop through is given to the charity of your choice. Examples include the UK’s Give As You Live, which has raised over £2m since launch
  • Personal Nudge Schemes – this is a new example of microdonation fundraising that I came across last year when I read about Snoball over in the US. In this case you choose what event triggers your microdonations. It might be every time you go to your local coffee shop (triggered by a Foursquare check-in) or every time your sports team wins a match (using live links to sports stats), or whatever else you like. Then once you’ve set-up your triggers you can tell your social network about them, with the idea being that they’ll set-up the same triggers and the cumulative donations made will ‘snoball’

With the ongoing desire across the sector to find new ways to raise money online I have no doubt that interest in these schemes is going to grow this year. However, the big question for me is just how much the income generated is really going to grow over the next few years?

On its website the Pennies Foundation illustrates the income potential based on half of all UK payment card holders giving 8p per week – adding-up to over £89 million per year (not sure how they came-up with 8p/week). Certainly at that level microdonations would be a valid and very welcome addition to the UK’s annual donated income (which was estimated as £10.6bn in 2009/10). But it does feel like we have an awfully long way to go from the low £millions currently being achieved if we are going to see this sort of income coming through.

Clearly the technology exists to make microdonation giving one-click simple, and the ever rising volume of online customers shows that the potential market of donors is there (80% of UK internet users ordered goods or services online in 2010). But it doesn’t seem like the two are simply going to spontaneously combine to generate tens of millions in income without someone doing something to really get things moving.

Any bright ideas to help make microdonating really take off in 2012?

This is the fourth of 12 posts that I’ll be publishing throughout January on trends I think will prove to be important for digital fundraising in 2012. You can find the previous trend post, on Augmented Reality, here.

10 thoughts on “12 digital fundraising trends for 2012 #4 Microdonations

  1. Thanks for mentioning http://www.giveasyoulive.com Here are a few more details for you:

    – We’ve been able to help charities raise an average of £2.10 per month per supporter in additional income. All without asking anyone to put their hand into their pocket because, as you’ve identified, affiliate marketing takes advantage of existing online consumer spend.

    – Unlike other affiliate schemes, you can download Give as you Live and shop directly at over 1,750 online stores, so no one has to remember to visit a special website or change their online behaviour before shopping at Amazon, John Lewis, Expedia or more.

    – We work closely with charities and listen to their suggestions. A few leading charity CEOs suggested a bonus donation for every new shopper they create. So, to kick off 2012 we’re giving away a £5 bonus donation for every new shopper that spends over £10. All a charity has to do is contact us and share Give as you Live with their supporters. Then they’ll get £5 extra for every new shopper, in addition to the £2.10 average generated per month.

    Last year we worked with VOGUE.CO.UK for Online Fashion Week and we saw over £1,000,000 worth of transactions through Give as you Live. We’ re really excited by the potential for 2012 and appreciate your support.

  2. Happy New Year Bryan, thank you for sharing your thoughts on the coming year:)

    Interesting take on the microdonations-trend – I also very much believe in microdonations, however I hadn’t thought about the three types you mention. I don’t think we have any “organized” microdonation-schemes in Norway To me, micro-donations have been more important as a response channel for short (and intense) drives, campaigns where you pay for virtual goods, or where you really like an ad / campaign and pay a small donation there and then rather than making a larger donation to the cause. Some examples would be where you engage a twitter-following to raise x amount via small text-donations, or a facebook-application where you pay a small amount to put some badge / ribbon on you profile picture, or the donation-ask at the end of the brilliant iHobo-application. How could you not pay the £2 asked, even if you don’t want to immerse yourself in the cause.

    I think microdonations might be good way to get better return on fundraising videos and campaign microsites too, if you see a forwarded youtube-clip, or an interesting microsite, you might not get engaged enough to become a regular donor there and then, but you might chip in a tiny amount if it’s easy enough (text, I guess). Great case from Norway this christmas was one charity who simply shared a facebook-picture that asked for text donations of about £8 (which, at least in Norway, is still within what I’d juuust call a microdonation) to pay for two meals for a homeless person. They raised a staggering £200 000 on this. So yes – microdonations provide some very interesting oportunities in the time to come:)

    • Thanks Beate, great points! I think it might be useful to think in terms of two broad types of microdonations: ‘Embedded Microdonations’ where they are linked directly to another action or transaction being – through initiatives like those I mentioned here. Then ‘microdonations’ as the term for low value donations being made as specific, discrete gifts to a charity – like your outstanding Norwegian Text donation example.

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  4. I wanted to bring HelpAttack! to your attention – it’s most similar to Snoball, in the sense that activity drives microdonations. We focus our platform on the online actions that are already happening around your cause and supporters: Facebook updates, Tweets, #hashtags, blog posts. You can choose whatever content is meaningful for your campaign, and ask people to support you and donate a little bit when it happens. For example, people could give when overseas volunteers upload photos, or when young volunteers Tweet during a volunteer day, or simply to give people a way to “give where they live” on Facebook and Twitter. http://helpattack.com

    In the round-up category, Minidonations is also worth a look.

  5. Pingback: Top 3 Future Trends for Social Media Fundraising | HelpAttack!

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  7. Pingback: Cause4Opinion- Micro-giving with Macro potential?

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