Crowdfunding could harm older, established nonprofits

February 27, 2014

Crowdfunding could harm older, established nonprofits

Crowdfunding could have a negative impact on the future of larger and more established nonprofits, according to The New York Times. While a powerful tool for small organizations or single-issue causes, it can draw money from larger organizations where donors feel their contributions are less direct.

The Times explains that global charities such as Save the Children realized long ago realized that donors wanted to feel a personal connection to the cause they were supporting. To fulfill this need they offered monthly updates and pictures of the children or families that their donations benefited. There was an understanding that not all the money went directly to the child, but to programs that aided him or her. Some money, of course, was also used to support the nonprofit itself.

Crowdfunding removes the organization from the equation. That is not to suggest that charities are merely a middle-man – they are more than necessary to collect large amounts of money and direct them to a specific cause. However, younger donors seem more interested in seeing the direct impact of their contribution, instead of just assuming it is helping. For instance, supporting a charity that fights cancer might not provide the same reward as donating money directly to cancer patient that needs assistance paying their bills.

Successful support requires experience
The Times goes on to explain that  a direct connection is not always the most effective one, particularly if it is drawing funds away from an organization that is committed to helping everyone afflicted by a certain disease, is hungry or financially unstable. The nonprofits can distribute the funds to people who may not have the ability solicit funds through the use of the Internet.

The solution for larger nonprofits is to start using crowdfunding more often themselves. Perhaps they can a highlight a very specific causes or an individual on a crowdfunding site and use it to draw more attention the charity or organization as a whole. Crowdfunding could also represent just one more obstacle for nonprofits trying to raise money. As always, it could take some new and creative initiatives to keep former donors engaged and help them realize how much good an organization is doing.

Content presented by First Nonprofit Companies, the leading provider of state unemployment insurance solutions for 501(c)(3) nonprofit employers.

single-post11380

Ready to chat?
Get in touch today to request a no-obligation savings evaluation.

Testimonials

In addition to their money-saving purpose on behalf of nonprofit organizations like AHS, First Nonprofit’s Nonprofit Unemployment Fund streamlines the information we need to efficiently manage unemployment claims. Our relationship with NU Fund gave us access to such things as advice on planning for what’s ahead and how to analyze cost scenarios when unexpected events occurred. Both experiences were very helpful.

Asian Health Services, Oakland, CA

The Ensight Skills Center has enjoyed working with First Nonprofit for several years. We are enrolled in their Unemployment Savings Program and although we have not required a lot of intervention, there have been a few times. I know others have dealt with the same problem of unemployment fraud over the last year and in our case, a call to First Nonprofit (they actually answer their phones) cleared up the issue. They also sent us a letter to send to all our employees telling them what they needed to do to prevent this in the future and protect themselves. What a relief! Over the years if I have questions or concerns, they are happy to listen, advise and help if they can. Another BIG advantage of using First Nonprofit is that all the money that is paid into the Unemployment Savings Program lives on my balance sheet as an asset. The money continues to be Ensight’s not the governments. First Nonprofit has certainly given me peace of mind.

Ensight Skills Center, Inc, Fort Collins, CO

Visually Impaired Preschool Services has been a client of First Non-Profit since it was first offered as a benefit of VisionServe Alliance. We completed a thorough evaluation of cash savings to our agency before taking advantage of this wonderful benefit and it has been a very wise decision. Our experience with the processes from accounting to claims have been professional, expeditious and easy.

Visually Impaired Preschool Services, Louisville, KY

NYCON members who use First Nonprofit’s programs enjoy enduring savings and improved efficiency. Our association knows that success, because from the beginning, we achieved the same great benefits. Great savings, seamless technology, and responsive service. NYCON highly recommends First Nonprofit’s remarkable unemployment solutions.

New York Council of Nonprofits, Albany, NY

It has been our sincere pleasure to maintain a strong, vibrant business partnership with First Nonprofit. We greatly admire their strong industry knowledge, technical expertise, constant professionalism, knowledgeable and dedicated staff. They are always extremely responsive, personable and provide us with the necessary guidance and recommendations on a numerous variety of employment scenarios. We

Thresholds, Chicago, IL

Because INCS advocates for the operating conditions that allow charter public schools to provide high quality public education, partnering with First Nonprofit was an easy decision. First Nonprofit’s unemployment programs provide our member schools two operating elements crucial to their ability to provide high quality public education: savings and budget certainty. Capable, committed teachers are the key to student success. By participating in the unemployment insurance savings plan, charter public schools gain peace of mind and are able to invest more money in their teachers.

Illinois Network of Charter Schools, Chicago, IL

Throughout our membership in the Unemployment Savings Program, First Nonprofit understood our demands, community dynamics, and the importance of seamless services; that allowed us to serve our constituents better.

Prevent Blindness America, Chicago, IL