Quite an interesting and well-considered approach to helping donors fund nonprofits doing excellent work in a given issue area. Philanthropedia, a nonprofit, canvasses experts in that issue area among foundation grantmakers. They provide area of interest funds to donors large and small.They also offer a gift card. The people associated with Philanthropediaseem to be mostly drawn from Stanford. I recently interviewed Dawn Kwan, Philanthropedia's Manager of Nonprofit Profiles & Social Cause Expansion.
What is your sustainability model? Where do your revenues come from?
Currently, we are grantees of the Hewlett Foundation. One part of our sustainability model is to eventually rely on donors to donate to us through the website to support further research. Currently, ~60% of our donors also donate something to Philanthropedia during the time of their transaction. We are also considering other revenue streams such as partnering with community foundations or other groups to sponsor future social cause research.
How many donors have used you? How much money has been given?
Since our official launch on November 2, 2009, we have 145 donors and raised almost $3,000 in donations.
Are you in the black? What does the future look like given current trends in attracting donors?
We are in the black and are optimistic that after only 2 weeks of having a live website, we'll be able to reach many more donors and raise thousands of dollars on behalf of the top nonprofits we highlight on our website. We're ramping up our outreach during the holiday season and launched a gift card this week for holiday shoppers interested in giving a charitable gift. We think that during this economic downturn, it's more important than ever that donors think carefully about how to have a bigger impact with their giving.
Do you see community foundations as collaborators or as competitors?
We see community foundations as collaborators, because we promote the same values and see our efforts as complementary--we both want to focus on strategic giving to maximize the impact of a donation by using expert knowledge about nonprofits. Also, if community foundations are interested in having us explore a certain social cause in their community, they could sponsor our research to find the top expert recommended nonprofits in that area. We want to work with foundations to make good information about nonprofits available to more donors--high net worth donors who are served by community foundation, as well as the many many others not currently plugged into that system.
Do you have or foresee connections or alliances with gift funds provided through such places as Schwab, Fidelity, Calvert?
We are interested in sharing our product with as many donors as possible. Matching donations and collaborating with financial institutions such as Schwab, Fidelity, and Calvert, are great opportunities that we plan on exploring in the future.
I have really liked what I have seen of this effort. One counter thought from a marketer's perspective. Many in the field seem to think that the key issue is pairing philanthropic dollars with a specific nonprofit, or program, in a rational way, as would be done by a stock analyst making or recommending an investment in a group of stocks he or she follows. Or, the investing of charitable dollars might be likened, on this vision, to an engineer buying electronic equipment after an extensive due diligence process involving reading Consumer Reports and many other articles, before making an informed purchase on totally rational grounds. But, really, is this how a consumer might purchase a suit, dress, handbag or automobile? How much of our day to day consumer choices are driven by painstaking logic and evidence and how much is driven by whimsy, social identity construction, keeping up the the Jones's, or emotive logic? Does Prada sell handbags on logic alone? I suspect gifts through Philanthropedia would soar if it had a Oprah Winfrey Gift Fund or a Michelle Obama Fund, or a Palin's Picks Fund, or Rick Warren Power of Purposeful Giving Fund, in which the celebrity were the ostensible picker of the underlying charities, though that work might be handled by nameless backroom experts. In other words, the Gift Funds might be branded and sold like any other prestige brand, or green brand, or brand of spirituality. I don't mean this is how it should be, but how in America it is. Given a choice of sweet reason or celebrity endorsement, go with the celeb. Might I suggest, at the risk of seeming to be self serving, a Happy Tutor Fund for the Moral & Intellectual Uplift of the 500 Wealthiest Americans? Bland experts like me could develop the theory of social change, pick the underlying charities, put metrics in place, and evaluate results, but it would be Tutor's unholy charisma and name recognition that would bring in the donors who are passionate about the cause. Tutor's theory of change is brutally simple. "I seek to uplift the moral and intellectual capacities of the 500 wealthiest Americans because it is their stupidity and corruption that has gotten us into this mess. By chastening them, and getting them to give wisely and well, we just might turn this thing around. But step one is beating some sense into them." Not everyone will agree with that assessment but it is a clear brand promise backed by a celebrity presence known to millions. It is worth a shot.
Phil—What an interesting perspective on how to “market” a charitable giving! Thank you for sharing this insight. You’re pointing to a major question in both the traditional consumer marketplace and the charitable giving marketplace: what influences people’s decisions? The overlap that you’re pointing to is that there is less “logic” used in both decision making processes—as much as we might not like it.
We have actually thought about something like this for a little while where we would recruit “Ambassadors,” prominent individuals, to create their own fund that others could donate to. This idea is a bit on the backburner right now, though if an opportunity opened up, we’d be excited to explore it in more depth.
--Erinn Andrews, COO, Philanthropedia
Posted by: Erinn Andrews | November 19, 2009 at 07:34 PM