Fundraising Update

Welcome to Fundraising Update. This week, we take a look at the state of fundraising on TikTok. Plus, the ethics of asking donors to opt out of donation increases.

I’m Eden Stiffman, senior editor at the Chronicle of Philanthropy. If you have ideas, comments, or questions about this newsletter, please write me at eden.stiffman@philanthropy.com.

Can TikTok Help ‘Future-Proof’ Nonprofits?

Last spring, the social-media video app TikTok organized a weeklong series of livestreams to direct donations to various causes. The CDC Foundation, a nonprofit established by Congress to help fund the national public-health agency, was one of the beneficiaries.

TikTok made introductions to influencers who promoted the events and appealed for donations to support the CDC Foundation’s “health heroes.” The foundation brought in $13,000 on the night of its livestream. The matching gift from TikTok bumped the night’s tally up to $26,000.

Historically, the foundation’s supporters were scientists, public-health professionals, and others with advanced degrees. TikTok connected the organization with a brand new crop of Gen Z and millennial donors and helped the professionals share science-based information about Covid-19 with them.

The next day, the phones started to ring. “I had moms calling, saying, ‘What is this charge on my credit card?’” Elizabeth Patrick, director of advancement services at the CDC Foundation, told my colleague Emily Haynes. After Patrick explained, none of the moms objected to the charge.

TikTok exploded in the early days of the coronavirus pandemic, when people sought entertainment online — often in the form of viral choreography. Users around the world installed the video-sharing app 315 million times from January 1 to March 31 last year — a record number of downloads of any app in a single quarter, according to Sensor Tower, a company that tracks mobile app data. By last February, more than 1.1 billion people were using the app each month, according to estimates by social-media ad agency Wallaroo Media.

The app is popular with people in their teens and early 20s, but because it’s not as time-tested as social-media platforms like Facebook and Instagram, and because the users are so young, some nonprofits hesitate to get on board. But as Emily found in her reporting, building an audience on TikTok is a simple way for charities to reach a larger audience, even if many of those individuals can’t provide financial support at the moment.

Nathalie Ormrod, senior media strategist at the consultancy Blue State, calls this strategy “future-proofing.”

“With emerging platforms, they might have younger audiences,” Ormrod told Emily, “but in five, 10 years’ time, those are going to be the people that are keeping these nonprofits afloat.”

Last April, TikTok launched a donation “sticker” similar to the one Instagram rolled out in 2019. TikTok uses the software company Tiltify to process donations made through its giving tool in real time. Of note to fundraising professionals: Unlike gifts made through Facebook and Instagram, which don’t share donor information with charities, donors who give through TikTok can check a box to provide the charity with their contact information and give it permission to email them future appeals. Just eight charities, including the CDC Foundation, were initially able to collect donations, and the company matched all gifts made on the platform during the tool’s first month in operation.

But since rolling out the donation tool last spring, TikTok has expanded the program to around 80 vetted charities, with more coming on board each month. In general, nonprofits that have an established presence on the platform are more likely to be granted access to the tool, Brett Peters, who leads TikTok’s education and philanthropy partnerships, told Emily.

Personal connection is at the heart of TikTok, Peters said. And that makes it an ideal platform for organizations to share their stories and demonstrate impact. “You can find volunteers or evangelists of your work to talk about why that work is so important to them or how it’s affected their lives.”

This story was truly a Chronicle team effort. Emily got on the app herself — and another colleague’s TikTok-savvy teenage daughter gave her a tutorial. There’s a lot of great information about how the app works and how a variety of charities — like the Actors Fund, the American Heart Association, and the Malala Fund — are using it to raise money or connect with new audiences. The full story is well worth a read.

Need to Know

32%

— Share of people who say they give to crowdfunding campaigns in a given year

A September 2020 survey of 1,535 adults by the Lilly Family School of Philanthropy at Indiana University sheds light on the promise of crowdfunding campaigns for nonprofits, Emily reports. People were most likely to give to appeals made by a family member or close friend: More than half of respondents who had supported a crowdfunding campaign said they had given to one such effort. Campaigns organized by charities were the second most popular, with more than 47 percent of crowdfunding donors saying they had donated to a nonprofit on a crowdfunding platform.

That finding should pique nonprofit fundraisers’ interest in crowdfunding campaigns, said Una Osili, associate dean for research and international programs at the Lilly School. “Charitable organizations can start to think about how they can build crowdfunding into their strategy,” she said in a webinar presentation on the report.

Participation in crowdfunding campaigns is still relatively low. About 91 percent of people surveyed were familiar with the concept, but just under 32 percent said they had given to such an effort. Still, that’s an increase from four years ago.

The survey also captured some demographic trends that set crowdfunding donors apart from those who give through other means. Crowdfunding donors are slightly more racially and ethnically diverse than donors who give by check or through a charity’s website. They’re also more likely to be younger, single, and less religious, according to the survey.

Plus:

• North Carolina State University set a new record for a 24-hour campus giving day. The college raised $58.1 million on its March 24 Day of Giving — an impressive total considering the campus had held its previous big fundraising blitz just six months earlier. At the outset of the pandemic, many colleges initially pressed pause on spring giving days or pivoted to support emergency needs for students, staff, and faculty. But the digital fundraising drives have been largely successful over the past year.

  Giving days present donors with a sense of urgency because of matching gifts available exclusively during that 24-hour period. This year, for example, the university’s chancellor approved the use of unrestricted funds to support a six-figure match for other contributions.

  The grand total was bolstered by a handful of large donations. N.C. State received nine gifts of $1 million or more, including two of at least $5 million.

  Brian Sischo, vice chancellor for university advancement and president of the N.C. State University Foundation, said some donors have become savvy about taking advantage of matching funds. Major donors who made a commitment in January or February might hold off on making their gift, he said. “They know that by waiting until Day of Giving, they can help their college earn some extra bonus money.”

The Ethics of Opt-Out Donation Increases

Early this month, the New York Times published an article on the Donald Trump campaign’s widespread use of an “opt-out” checkbox on its online donation form. The campaign wanted to raise money quickly and sign up more recurring donors who might not take the time to read the fine print and uncheck the box to opt out of future automatic contributions.

“As the election neared, the Trump team made that disclaimer increasingly opaque,” the Times reported. “It introduced a second prechecked box, known internally as a ‘money bomb,’ that doubled a person’s contribution. Eventually its solicitations featured lines of text in bold and capital letters that overwhelmed the opt-out language.”

That strategy ensnared hundreds of thousands of loyalists of the former president, many of whom were surprised and outraged by the mounting charges. “Banks and credit-card companies were inundated with fraud complaints from the president’s own supporters about donations they had not intended to make, sometimes for thousands of dollars,” according to the article.

Ultimately, the campaign refunded 10.7 percent of the money it raised on WinRed, its for-profit online donation platform.

The prechecked box on donation pages is not unprecedented in political fundraising. And while many nonprofit fundraisers may disapprove of the tactic, some charities have also used opt-out tactics to automatically increase the size of a donor’s recurring gift.

That’s the case at Plan International USA. Shanna Marzilli, the charity’s chief marketing officer, spoke to me in 2019 about the organization’s success increasing donation sizes this way.

A direct-marketing agency had suggested this tactic based on the success of other groups that had tried it, Marzilli said. Several times as the organization sought ways to cover increasing program costs, it sent notices to donors who made recurring contributions. The notices informed donors who gave by check or credit card that their contribution would soon begin increasing unless they took action to opt out (via email, a phone call, or returning a mailed form). Donors who sponsored one child with monthly gifts would see those increase by $2 a month. Others who supported multiple children or made recurring gifts to other programs may have seen those contributions increase by another amount.

Donors who contribute quarterly or annually were also informed of the increase. However, because of banking regulations, donors who made contributions directly from their bank accounts were asked to opt in to give more.

The opt-out automation helped the charity keep administrative costs down and boosted fundraising totals, Marzilli said. The charity repeated a similar campaign in 2019 but has not done so again since then, Marzilli said in an email last week. That 2019 effort was successful, both in terms of increasing donor contributions and retaining donors, she said. Some donors received the increase notice in both 2016 and 2019.

Marzilli wasn’t concerned about donors being caught off guard by donation increases. “Nothing Plan does is automatic,” she wrote in an email. The charity sends multiple notices in the months leading up to the date the increases go into effect, she said. Plan International USA has a loyal donor base and is regularly in touch with supporters, providing updates on children who are sponsored and other ways to engage with the organization.

‘Passive Engagement’

While the strategy may net more money in the short term, fundraising experts are highly critical. They’re wary of its potential to turn off individual donors — and harm the nonprofit world’s reputation.

The AFP Donor Bill of Rights states that fundraisers must “obtain explicit consent by donors before altering the conditions of financial transactions.” When charities ask donors to opt out, they run the risk of alienating a donor, said Robbe Healey, a member of the Association of Fundraising Professionals’ ethics committee.

“Opting out is a passive engagement with a donor, while opting in requires them to actively engage with you,” she said. Nonprofits that are serious about stewarding and cultivating donors “want them to engage with you, not just passively allow everything you’re suggesting.”

Opt-out tactics also bank on people not reading the fine print, said Harvey McKinnon, a fundraising consultant in Canada and the author of Hidden Gold, a book about wooing monthly donors.

“Organizations that do this may make more money, but they are going to tick off a lot of donors,” he says. “It’s basically something that will trick donors who aren’t paying attention, and people resent that.”

Read what other fundraising experts had to say about this opt-out tactic for increasing donations.

In Case You Missed It

Our April issue takes an in-depth look at solutions to help fix the inclusivity problem in fundraising offices. It’s a critical issue for the field. Be sure to spend some time with these stories:

• Diversity Is Not Enough in Fundraising Offices: Nonprofits have been talking about diversity for a long time. But making sure fundraisers feel included and nurturing a sense of belonging require a level of intention most haven’t mustered.
• Nonprofit Created Its Own Fundraising Pipeline: A summer “boot camp” helped the All Stars Project train diverse, early-career fundraisers.
• Efforts to Increase Diversity in Fundraising: A number of organizations are working to expand the number of fundraising professionals of color and support pathways to leadership positions for those already working in the field. Here is a sampling of programs.

Tips & Tools

• How to Connect With Prospective Major-Gift Donors Now: Three veteran fundraisers offer advice about how to build relationships at a time when meeting face-to-face is still tricky.
• Understanding and Tapping Into Donor-Advised Funds: These philanthropic accounts have become the preferred giving vehicle for many donors. Use this collection of articles and other resources to learn how charities can connect with fund holders.
• How to Host Engaging Virtual Events: It’s unlikely that virtual events will fully replace in-person events after it’s safe to gather indoors again, but fundraisers expect some events to remain online. We spoke to fundraisers, event planners, and consultants who explain how to make them special.

What We’re Reading

• The head of AFP’s Women’s Impact Initiative has filed an ethics complaint against well-known fundraising copywriter Tom Ahern. In recent weeks, Ahern, a white man, has criticized the Community Centric Fundraising movement and individual fundraisers who have pushed back on the donor-centric model of fundraising that Ahern advocates. “Ahern’s criticism appeared to many to be an unseemly unprovoked display of an established white male ‘thought leader,’ a conference circuit regular for decades, careening around the virtual globe like a bowling ball intent on knocking down fundraisers of colour like so many bowling pins, belittling the systemic racism they and others have experienced along the way,” the author writes. She notes that the complaint against Ahern puts a spotlight on the AFP Ethics Committee’s ability to deal with professional misconduct based on issues of privilege and race. “It’s easy to imagine this could be the first of many complaints it receives about race-based behaviour, especially as people see it as a potential space to have professional misconduct around racism called on the carpet.” (Charity Report)
• The University of South Carolina’s biggest donor has written a scathing letter to the institution after it failed to acknowledge the recent death of her mother. Darla Moore, who has given more than $75 million to the university, said she was “embarrassed and humiliated” by her association with the university after it was silent on the April 1 death of her mother, Lorraine Moore. She said the university had been “the recipient of the most exceptional generosity in the history of this state by virtue of her [mother’s] life” and that she regrets the “effort and resources” she has devoted. USC’s business school bears Darla Moore’s name. In an April 6 statement, the university expressed its “deepest condolences” to Moore. It would not comment on why it had not reached out to its benefactor earlier. (Post and Courier)