With the rise in online and mobile giving, micro-donations, also known as micro philanthropy, have become a positive trend in the nonprofit sector.
The term usually refers to a smaller sum of money donated by millions of people to a charitable cause. It would be a grave mistake for nonprofits and even churches to ignore the power of the masses and their smaller contributions.
As per Tech’s Good, micro-donations are donations between $0.25 and $10. They’re the latest and most disruptive innovation in the world of giving. Many donors don’t think twice before donating a smaller amount of money. That’s why it’s easier and more effective to make an appeal. Changing your mindset and trying new fundraising methods can be beneficial to your cause.
Micro-donations in the face of emergencies
This is where crowdfunding through micro-donations comes into play, a method that can help mobilize resources in the face of an unprecedented event.
Receiving small donations from a large number of people can help reach your target. And with the help of social media and news channels, your audience can be encouraged to show their sympathy and empathy at the same time. (Be aware that international help and funds can sometimes take a long time to reach their destination, given the requirement for approvals from authorities.)
Micro philanthropy enables people to help through their digital devices. The key is to make the process easy. Focus on a strong fundraising offer. Calibrate your ask to smaller amounts. And be sure the platform you chose is easy to use. People are more likely to donate if it’s easy and there’s a strong reason to give. Mobile phones make it very easy to give just when you see a good cause. Use technology to complement the process of micro-donation.
A recent example: during the Covid-19 pandemic, people needed aid from their fellow humans. That’s when small, quick transactions from different micro-donors helped across the globe. There are different apps and fundraising platforms that show how micro-donations can go a long way in helping.
The right audience for micro-donations
Although people across all ages can become micro donors, it’s the millennials (ages 25 to 34 in 2020) who form a large part of the donor group. Remember that older people still make up the largest group of donors. But millennials are not kids anymore. Nearly 3 out of 4 millennials have donated money during the pandemic. As with all donors, reach their hearts, make it easy to give, and you’ll see results.
Millennials are a smart target audience for smaller, easy-to-make gifts. Most want to help but are currently saving or paying up their student loans. 92% of millennials own a smartphone and the popularity of social media among the same age group can be seen every day. Social media as a platform is an excellent place to reach millennials. When your nonprofit promotes its micro-donation campaign, it’s the millennials you want to win over first since this is a group that can help you widen your audience with their followers and influences.
Limitations to consider
One major growth stopper for micro-donations in the past was high credit card transaction fees of $0.30 per transaction. The good news is that with the advancement in mobile payment processes, card transaction fees have gone down and hopefully will continue to do so in the future.
Another challenge in the way of micro philanthropy is reaching the required number of donors. The solution to this can be a widely generated outreach on social networking sites and asking your already existing micro donors (mostly millennials) to spread the word through social media posts, tags, story and status updates.
And be sure to think through the donation process. It’s better to use social media, like Facebook, to attract people. But move them to your website to make donations. You want to control the donor information so that you can build relationships with them from the start. Many donor management systems now integrate with social media.
Conclusion: micro-donations can be part of your fundraising strategy
It’s important to remember that what micro-donations lack in revenue, they make up for it in impact – even for the organization! This is a process that can be seen as a contributor to the democratization of philanthropy. By adopting it as one of your strategies, your organizations can gain a long-term benefit. Offered good donor care, millennials are an important part of the future and so are micro-donations.
Guest Author: Patrick J. Coleman
Patrick J. Coleman is the President of GiveCentral and Coleman Group Consulting. As a CEO to two enterprises, he is on a mission to help reduce costs and increase fundraising for all charities through ways such as mobile giving. With a diverse educational background and over 25 years of experience in operations leadership and strategic planning, he has developed a proprietary methodology that focuses on the art and science of negotiation to deliver measurable, implementable, and sustainable results. Mr. Coleman has served as Board President for Elk Grove United Way of Suburban Chicago, and as a board member of both Talkline/Kidsline and Public Action to Deliver Shelter (PADS).