NEW YORK – Millions of people have been displaced by global conflicts. Communities experiencing unusually severe natural disasters. Lives turned upside down by health care inequities.
In the middle of these crises are nonprofits, ordinary people, and aid groups—all looking for your dollars to make a difference. But with no shortage of worthy causes and the emergence of new donation technologies, how do you donate?
The choice can be overwhelming for those looking to open their wallets. Many appreciate ordinary charities. But others — Gen Z and millennials, as well as the unmarried and less religious, according to a 2021 study by Indiana University’s Family School of Philanthropy — like crowdfunding, collecting donations online for people in dire straits.
These approaches reflect different estimates of impact and reliability. But they are not necessarily opposed.
“It’s really: What is the right type of support that an organization, a community or an individual needs?” said Bloomerang Chief Customer Officer Todd Bayliss, who co-founded the platform that helps nonprofits raise funds online. “And the ability to tailor it to the individual gift giver.”
Here are some questions to consider as you determine which aid best suits your goals:
It can come down to whether you want to make a big difference for one person or contribute to a large-scale change.
Tiltify is a technology platform that helps nonprofits and individual crowdfunders raise money. If donors want to ensure that food reaches communities recovering from disasters, Tiltify CEO Michael Wasserman says a nonprofit contribution is probably best, as established organizations already have distribution channels and experience.
But if you want to make sure a specific person can take care of themselves, he said, donating directly to a crowdfunding campaign might make more sense than sending money “through the charity funnel.”
“It really depends on what your goal is as a donor: whether you’re trying to help someone in particular, or whether you’re trying to help people in the plural,” Wasserman said.
According to one non-profit money transfer organization, you can do both at the same time. GiveDirectly reports sending more than $860 million to 1.6 million people on three continents. Senior program manager Richard Nkurunziza says the idea was initially met with fears of misuse. But GiveDirectly believes that monetary donations are a worthy way to empower poor people to invest in their special needs.
In Rwandan villages, he said, recipients spend donations on home repairs, new businesses and youth education, all of which ultimately benefit their entire community.
“There is a bit of freedom,” Nkurunziza said. “It empowers the recipient to decide how they will use the funds for themselves.”
Crowdfunding can be considered “more democratic,” according to Claire van Theunenbroek, a professor at the University of Twente who specializes in online donation behavior. That’s because donors have more control over how their gifts are used when they choose exactly who it benefits.
The downside, she says, is that the people with the greatest needs don’t always have the greatest success. People tend to support “easy sell” projects with highly emotional appeals. Research has also shown racial disparities in crowdfunding.
The most popular reason donors told Bloomerang they stopped giving was because they didn’t believe the contributions were being used wisely, according to the company’s Generational Giving Report. The second most common response was that donors no longer feel connected to the nonprofit they previously supported.
The responses highlight the need for recipients to proactively prove their trustworthiness.
Tax-exempt nonprofits must file a financial report with the Internal Revenue Service every year that contains publicly available information, including executive salaries. Watchdog organizations such as Charity Navigator compile lists of vetted nonprofits and rate their work.
Crowdfunding, while convenient, is much more susceptible to fraud. Online sites are relatively unregulated, placing the responsibility for protection on donors and the platforms themselves. In the case of GoFundMe, donations can be returned up to one year after they were made. The company also advises organizers to identify themselves and their beneficiaries, as well as clarify their plans for spending contributions.
Internet users mistakenly associate high donation numbers with credibility, according to van Theunenbroek. She said the best way to reduce risk is to make sure the project description is detailed.
“For a donor, if you prefer more certainty, then traditional nonprofits are probably better because they have a solid reputation,” she said.
ALSAC CEO Rick Shadziak said his charity is working hard to make sure donors feel confident that their money is supporting St. Jude Children’s Research Hospital’s mission: to improve survival rates for children from cancer around the world by covering the cost of care and research on treatment methods.
Shadyak urged people to donate regardless of the medium and always look for respectable causes. Bonafide charities, he said, bring a “greater level of trust”, while crowdfunding requires more “due diligence”. But he sees room for both.
“They really have to complement each other,” he said.
“Some of it is more in the area of micro-charity, where they might want to help a particular person because they’re in a difficult situation,” he added. “But if you want to help children with cancer, you want to help cure heart disease, there are charities that are very focused on that.”
Shadziak said ALSAC gets nearly a quarter of its annual revenue during the last two months of the calendar, around the time of year designated as the “Season of Giving.” The uptick may be due to the spirit of generosity during the holidays, he added. Certainly, a 2023 study found that people in a good mood are more likely to donate to charity.
They may also be making year-end tax plans.
“Nonprofit organizations give them the opportunity to do some things that are important to them while getting tax deductions,” Shadziak said.
However, crowdfunding donations to individual campaigns are not deductible on your taxes. But crowdfunding can make it easier to identify the ultimate beneficiaries of your gift, van Theunenbroek said.
Mutual aid refers to networks of mutual support of neighbors who promptly meet each other’s most pressing needs when existing systems cannot make them united. Because of these mutual ties, participants often describe the act as “solidarity, not charity.”
In the Internet age, these groups often require cash contributions through online payment systems such as Venmo, Cash App, PayPal, or Zelle. Anyone can scan QR codes that are commonly reposted on social media to donate. The money goes directly to those affected or helps purchase supplies for shared resources such as community refrigerators. Transparency can be in the form of a screenshot of the receipt that the organizers have shared on their profile.
Tamara Nizzi joined several mutual aid efforts in the early days of the coronavirus pandemic to care for her neighbors in Oakland. Knizy, director of the nonprofit think tank Data & Society, said these groups tend to start as immediate responses to crises that hit disadvantaged communities the hardest. The idea, she added, is that “renunciation of the state cannot be solved by charitable donations alone.”
Knizi said the bottom-up problems with such groups are that resources are shrinking and people are burning out. Only so many requests can be processed. Clash of organizers’ politics.
The benefits, she found, are that support comes from within the community and members interact directly with those who use it.
“It’s not just a feeling of charity, like when you make a donation and you’re done,” she said.
Associated Press coverage of philanthropy and nonprofit organizations is supported by a partnership with The Conversation US with funding from the Lilly Endowment Inc. This content is the sole responsibility of the Associated Press. For all content on philanthropy, visit /hub/philanthropy.
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