As the main crowdfunding platform for Give Local America, Kimbia had one job: make it easy for donors to give to charities during the 24-hour blitz on May 3. But due to a combination of technical issues, it failed. Online forms loaded slowly or not at all, preventing donors from giving. In other cases, individual gifts were processed multiple times.
In the months since then, nonprofits have been grilling Kimbia to explain how it will prevent another costly meltdown and re-evaluating their own technology operations. They’ve also been reaching out to Kimbia’s competitors and considering whether to make a switch.
And some nonprofits are taking the debate a step further, questioning whether giving days are a smart and sustainable way to raise money.
The venting over the May 3 event began immediately on Facebook, and two days later staff members from 15 community foundations dialed in to an informal conference call.
“Everyone needed to get stuff off their chest and express disappointment, sadness, anger, and hopefully opportunity,” said Priscilla Enriquez, chief giving officer for the Sacramento Region Community Foundation, who coordinated the call.
That call, which she jokingly refers to as “group therapy,” became a weekly occurrence through June. As others joined in, the calls evolved into a forum for the community foundations to share ideas, develop a better understanding of the technology, and highlight the importance of crisis planning.
Making Amends
In May, 23 nonprofits and one stand-alone giving-day organization signed a joint statement to Kimbia’s chief executive officer, Dan Gillett, expressing their need for more transparency from the company.
“A lot of us had more questions,” said Ms. Enriquez. They wanted to know what really happened and how Kimbia could help them recover what they lost and insure that this wouldn’t happen again. Could the company cut its fees further to offset the lost donations and time spent preparing for the events?
Some participating communities had to cancel or reschedule their giving days, while others extended the period for fundraising.
Kimbia had already waived about $370,000 in fees — roughly one-third of what it would have received from this year’s Give Local America event. For nonprofits in most participating communities, that meant 1.99 percent of funds raised were deducted instead of the typical 2.99 percent.
Mr. Gillett pledged to forfeit three months of his salary to distribute to nonprofits. The company has since decided to add a bit more to the pot. Each of the 47 local giving days affected by the company’s failure will receive $1,000 to offset some of the setup and services fees it paid. These “rebates” will go out next month.
The company also offered to provide free fundraising trainings, though just 50 nonprofits have registered, said Lori Finch, Kimbia’s vice president for community giving, in an email.
The company recently completed a review by third-party forensics firm BDO, which found that the technical problems were caused by a variety of factors, Mr. Gillett said, “some of which are on us, some are on our hardware vendor.”
Kimbia staff members declined to share the report’s findings on the record but presented a summary with Give Local America participants in a webinar last week. Sources on the call said the firm had ruled out a security breach. Issues included problems with the giving-day application bypassing Kimbia’s standard caching processes for form delivery, a developer making code changes outside of the company’s normal testing procedures, and Kimbia’s third-party database host not following its own established procedures.
In August and September the company will run more tests on its platform, Mr. Gillett said, “to have evidence that the changes we’ve implemented were effective.”
Kimbia has hosted several other giving days since May 3, and several more are scheduled for the coming months.
“We’re committed to making sure we have the technology in place that allows us to be successful at these events at any size and scale,” Mr. Gillett said. “We want to make sure that we’re able to build the trust of our community partners to ensure our platform can deliver not only at last year’s level but at a much higher level going forward.”
An advisory committee, made up of staff from community foundations that have participated in Give Local America, is providing more recommendations for how the day might evolve next year and into the future.
Donors, community foundations, and other charities had harsh words about the company’s slow communication and lack of transparency about the issues faced on May 3. Mr. Gillett says the company is working to strengthen its crisis-communications plan and help its clients do the same.
“We have done hundreds of these kinds of events without having that problem,” he said. “Until you’re in the middle of it, you don’t realize all the details you need.”
Crisis Learning
Many community foundations have used the incident as a learning opportunity.
“It’s a shame that such a major issue happened,” said Christopher Whitlatch, manager of marketing and communications for the Pittsburgh Foundation. “But at the same time, the good thing about the sector is it learns and grows any time something like this happens.”
Even before the May 3 meltdown, the foundation was looking to re-evaluate the technology options for its Day of Giving, as its contract with Kimbia would soon end.
Mr. Whitlatch developed a tool to evaluate giving-day technology and shared it on one of the weekly conference calls.
“My feeling is that community foundations have an aversion to technology because it’s not their core business. Their core business is serving donors,” he said. But that must change, he added. “It’s a subject that we need to bone up on because a lot of our donors are moving online.”
The foundation, which suspended its Day of Giving, rescheduled the event for September 21. The group will be using another platform, CiviCore.
Other giving-platform companies say they’re getting a boost in business.
More than half of the community foundations that participated in this year’s Give Local event have been in touch with GiveGab, said Charlie Mulligan, CEO of the company. “We’re going to gain a fair amount of customers.”
“People immediately got ahold of us, asking if it could happen with our technology,” says Aaron Godert, the company’s chief operating officer. And the technology questions have been more pointed. Customers and prospective customers want to have more in-depth conversations about these issues than before, he said. “I welcome that. I think it’s in everybody’s interest, including the technology vendors, to force them to get better at avoiding these types of things.”
A vice president at Razoo, another competitor, says the company has also received inquiries from community foundations exploring other options.
Rethinking Giving Days
Unlike Giving Tuesday, when participating charities can use any fundraising platform, all but a few of the community foundations and United Ways participating in the giving day used the Kimbia giving platform. But while that decentralized model certainly has its perks, no technology platform is fail-safe, says Ms. Enriquez. Community foundations must be prepared with contingency plans for any issues that may arise.
And many foundations are considering the longer-term sustainability of giving days. “It’s not the hardware and software that’s really going to make the day,” she said. “It’s everything else.”
Many giving-day organizers are discussing how to make the events more sustainable. That might mean cutting costs by finding creative ways for donors to cover credit-card processing fees or building partnerships with local companies and other organizations to help share the workload required to put on a giving day. It might mean integrating the online-fundraising trainings that many foundations do leading up to the day with year-round training for nonprofits. It might mean spearheading broader efforts to promote philanthropy in their area.
“The communities that have established giving days, they become so mission critical. But the technology must be mission critical, too,” said Beth Kanter, a consultant who has moderated the Giving Day Exchange. The nearly 200 member Facebook group is a project of the John S. and James L. Knight Foundation, which has helped finance, study, and evaluate community giving days for several years. The foundation, along with consulting firm Third Plateau, will release a report on the long-term value of the events next month.
Earlier this month, the Silicon Valley Community Foundation, which has used Razoo for its Silicon Valley Gives event, announced it would take a break from its event in 2017, citing donor fatigue and concern about vendor transaction fees. And other foundations continue to have discussion about what makes the most sense for them, says Whitney Caruso, a director of Third Plateau and an author of the forthcoming report.
But for the most part, said Ms. Kanter, “people aren’t giving up on giving days.”
See a Chronicle of Philanthropy article on how to choose a giving-day fundraising platform.
Send an email to Eden Stiffman.
