News and analysis
June 05, 2015
Updated June 09, 2015

Crowdfunding Website Charidy Has Unique Formula for Giving-Day Success

A new model of crowdfunding and giving days is gaining traction among Orthodox Jewish nonprofits in the U.S. and abroad. Charidy, an online platform created in 2013, combines the heft of major donors, the pressures of time, and an all-or-nothing funding contingency.

The site’s founders claim their campaigns have had a 100-percent success rate, with many organizations exceeding their goals. Charidy campaigns have raised an average of $60,000 for participating organizations.

Here’s how it works: A nonprofit sets a goal for how much it will raise in small gifts from individual donors during a 24-hour fundraising campaign. In the weeks leading up to the event, they must line up three wealthier donors who each pledge to match every small-donor dollar raised, multiplying the potential payout for the nonprofit. If the small-donor goal isn’t met during the 24-hour event, the organization takes home nothing.

Moshe Hecht, Charidy’s chief fundraising specialist, says the framework was built with the donors in mind.

"The donors want a sense of impact, so we quadruple their donation," he said. "They want a sense of community, so everyone gets noticed in the campaign. They also want a sense of urgency and excitement for the organization, so it’s 24-hours, all or nothing."

The all-or-nothing model isn’t unique to Charidy. Kickstarter also operates that way. Other groups, like Indiegogo, take a fee from groups that don’t meet their goal.

Giving-Day Success

Since February, Charidy has hosted three pilot giving days, which they claim are the first for Jewish organizations. All three events exceeded their goals. These giving days function similarly to the individual campaigns except that they are collectively all or nothing, so the stakes are even higher. If one group fails to reach its individual goal, the others do not receive their pledge dollars, either.

During Charidy’s first giving day in February, 19 Jewish outreach organizations had combined goals totaling $1 million dollars. The second event, in May, had a $1.5-million combined goal, and the third event, last week, generated more than $3.4 million for 16 Jewish human-service organizations.

"Giving days are going to be a big part of our growth and a big part of our mission," says Mr. Hecht.

Unlike other kinds of crowdfunding days, like Giving Tuesday, that draw in hundreds or thousands of nonprofit participants with wide-ranging missions, giving days hosted by Charidy have all involved 52 or fewer organizations. Though the platform was not built just for Jewish groups, the creators, two Chabad Jews in Brooklyn, started with their friends and their organizations so the primary client base has been in the Jewish community and is moving outward from there.

The average donation made via the Charidy platform — not on giving days — is just over $100. On the giving days, that has increased by about 25 percent, said Mr. Hecht. For Give Local America, the largest nationwide giving day, which is not conducted on Charidy, the average gift size was $113.

Leap of Faith

In June 2014, Tobey Finkelstein organized a Charidy campaign for her children’s Baltimore school, Cheder Chabad, where she works as a part-time administrator. The small religious school had a $40,000 deficit at the end of the year. The school’s 60 families came up with $10,000 in an hour and 20 minutes, and donations that were matched by three $10,000 donors, so the school met its goal.

One of the $10,000 donors had been a serial $1,800 donor prior to the campaign. "He had always had the capacity to give, but he finally saw the value," Ms. Finkelstein said.

After that initial success, she wanted more groups to benefit and organized giving days for two other groups using the platform. "It gives them the momentum and the compel and urgency that they just don’t have with other crowdfunding campaigns," she said.

Still, in proposing the concept, she meets resistance from some organizations that aren’t savvy with online giving. "A lot of groups don’t think they can do it," she said. "This is so new to them."

To run a campaign on the site, charities go through a vetting process with Charidy staff to ensure that they’re setting an ambitious yet attainable goal, said Yehuda Gurwitz, Charidy’s founder and chief executive. Each organization is assigned a fundraising specialist — a staff members or a consultant — to help them along the way. The company also provides a webinar training series, a checklist of steps to take before and during the campaign, and marketing materials.

Nonprofits that run a successful campaign give 2.9 percent of the funds raised to Charidy in addition to standard credit-card processing fees. Though it hasn’t happened to date, nonprofits that do not meet their funding goal are not obligated to pay a fee.

Rabbi Yitzchok Lowenbraun, national director for the Association for Jewish Outreach Professionals, helped organize MillionforOutreach, the first Charidy giving day, with the $1-million goal. It ended up bringing in $1.4 million.

Participating organizations had to take a leap of faith that everyone would be successful, he said, but that was one of the biggest benefits. Charidy donors have the option of sorting the page to see which organizations are closest and furthest from their goals. People were giving to organizations that were further from their goal, even if they were affiliated with a different group, he said.

"One of the most beautiful things was that everyone was pulling for everyone else," he said.

"It was an experiment, and my hope was that we’d learn how to do it, we’d be successful, and we’d be able to grow it and do it better in the future."

Editor’s note: The titles for Mr. Hecht and Mr. Gurwitz were updated after this story was originally published.

Send an e-mail to Eden Stiffman.