November 12, 2009

Small Charities Again Dominate Fund-Raising Contest

Little-known charities again struck big in America’s Giving Challenge, a contest designed to show the power of online social networks to raise small donations.

Groups participating in the month-long challenge competed to raise the largest number of gifts using the Causes application on Facebook. At stake was $245,000 in prize money from the Case and W.K. Kellogg Foundations.

Nearly 7,900 charities brought in 105,420 donations totaling $2.1-million in the competition, which ended last week. That was 17 percent more money — but 50 percent more donations — than last year’s contest, the first of its kind. More than twice as many groups participated this year.

While final results have yet to be announced pending a review of winning charities, it’s clear that smaller organizations outperformed larger groups.

Overseas China Education Foundation, a volunteer-run charity in Houston that raises money for children in rural China go to school, received the most donations — 13,722 for a total of $190,332. The group is likely to win the $50,000 grand prize.

The Prem Rawat Foundation’s Food for People program, which feeds poor people in India and Nepal using traditional recipes, raised the most money, 11,981 donations totaling $225,299.

Small charities likely fared better in part because they were more motivated by the prize money than were less-established groups, said Jean Case, chief executive of the Case Foundation. She said she had anticipated that some large groups would play a more active role in this year’s competition, but that “we didn’t really see that dynamic emerge.”

Another reason for the success of small groups could be that they have more readily embraced the “decentralized strategy” required of online giving contests, said Michael Smith, a vice president of social innovation at the Case Foundation.

“The most successful causes have hundreds of people that are out there and are trying to raise money on behalf of their cause,” he said. “It’s not a development director sitting in an office in Washington, DC.”

The Case Foundation spent the month before the contest providing tips and strategies to help charities raise money through social networks.

The economy may have taken some toll on this year’s competition, as the average gift was smaller than in last year’s challenge. But Ms. Case said the competition has always been about revealing the power of small donors, particularly younger people with less money to give away.

“They don’t have a $50 gift to give,” she said. “They might be able to give $10, and that’s just fine with us.”