In April 2007, a National Public Radio listener named Norman Bier learned that a women’s shelter on South Dakota's Standing Rock Indian Reservation — one of the poorest Native American communities in the United States — had exhausted its funding and was facing an imminent suspension of services until new funds could be secured. To help the shelter stay afloat, Bier outlined a fundraising plan on political activism Web site DailyKos.com. Part of Bier's plan called for the creation of a group fundraising campaign at ChipIn, an online service that helps networks of people collaborate to raise money.

Bier created a ChipIn fundraising page called Pretty Bird Woman House, in which he described the shelter's plight; he also built a fundraising widget (also known as a charity badge) that people could use to contribute funds and promote the campaign on their own sites or blogs. In addition, Bier kept a running diary at DailyKos detailing the campaign's progress. Remarkably, in just two weeks, Bier’s campaign raised over $27,500 from 683 donors, and the women’s shelter serving Standing Rock Indian Reservation stayed open.

As with playing the lottery, individual group fundraising success stories are not necessarily a good indicator of what most participants can expect. Not all of group fundraising campaigns raise $27,500 in 14 days — though most of them fare better than the average lottery ticket. Since overseeing a group fundraising campaign can demand a significant amount of time from your organization and its supporters, you may want to get an idea of just how much money you can raise before you take the plunge

To help you get an idea of whether group fundraising is worth your nonprofit's time and effort, we've compiled data from five popular services, which you can use to estimate how much money your organization might raise through a typical campaign. We've also included information regarding how much a campaign is likely to cost in planning and processing fees, as well as tips for exceeding the group fundraising benchmark.

Creating the Benchmark: Sources and Methodology

To arrive at benchmark figures for group fundraising, representatives from five leading platforms were asked to contribute private statistics about the activity on their Web sites. Survey questions included:

• How much money did your Web site generate in donations last month and to date?
• How many group fundraising campaigns were created last month and to date?
• What is the average amount raised by a group fundraising campaign at your site?
• What is the average number of contributors per campaign?
• What is the average size of a donation?

The five platforms were also asked to provide a subset of statistics on "successful" campaigns, meaning those that met their fundraising goals; those that raised more than $1,000; and those that stood out for their effectiveness in drawing many contributors.

This article includes data from ChipIn, Firstgiving, GiveMeaning, SixDegrees, and JustGive.org. Although these sites' platforms differ in many respects, the five groups share two points in common:

1. They permit anyone with an Internet connection to set up a group fundraising campaign on behalf of any 501(c)3 organization. GiveMeaning also permits individuals to raise money for registered charities based in Canada. ChipIn allows users to create group fundraising campaigns on behalf of any person or organization with a PayPal account.
2. They help individuals spread the word about a campaign through social networking tools. All five platforms offer a feature that allows you to email your friends, family, and colleagues to solicit donations. Many of the platforms also give users the option to set fundraising goals, create fundraising widgets, and upload videos and images. (For more information about fundraising widgets, read TechSoup's article Charity Badges: Turn Your Supporters into Fundraisers.)
   
   For more details on how the five platforms differ, please refer to About Micro-Philanthropy’s comparison chart.

Note that group fundraising services Change.org and Fundable also share the aforementioned points in common. Both platforms were invited to contribute their aggregated data to this article but either declined to do so or did not respond to TechSoup's invitation.

Other group fundraising platforms such as GlobalGiving, DonorsChoose, Kiva, Justgiving, and MyCause.com serve niche communities and have therefore been not been included. Still others — including Bring Light, Changing the Present, Facebook’s Causes, LinkedIn for Good — are too new to have statistically significant aggregated data.

The five group fundraising services agreed to share their private information on the condition that the platform-specific responses would remain anonymous. The data has been aggregated in order to produce cross-platform insights into the field of group fundraising as a whole. The benchmark figures for all campaigns can be contrasted with the cross-platform data on successful campaigns. Please note that these figures are not intended to be used as definitive statistics for all group fundraising services, nor do they reflect the performance of any one Web site or company.

Benchmark Figures for Group Fundraising

Bier's campaign to save Standing Rock's women’s shelter averaged $40.36 per donation. That figure is less than the average donation amount reported per campaign by the five group platforms participating in this article.

Since July 1999, ChipIn, FirstGiving, GiveMeaning, SixDegrees, and JustGive.org have helped nonprofits and individuals create 86,900 group fundraising campaigns. Collectively, these five services are responsible for over $44 million dollars in charitable giving; in April 2007 alone, they generated $3 million in donations through 1,720 group fundraising campaigns.

The charts below summarize the benchmark figures calculated from the five platforms’ responses to the questions mentioned above. For each indicator of success — average donation amount, average amount raised per campaign, and average number of contributors per campaign — the highest figure, the lowest figure, and the benchmark have been listed.

The benchmark figure is an average of all five platforms’ responses, and as a result, does not correlate to the midpoint between the high number and the low number.

Benchmark figures for all group fundraising campaigns

Four of the five contributing group fundraising platforms identified a subset of campaigns as successful. Successful campaigns were selected by one of three criteria: campaigns that met their fundraising goals; campaigns that raised more than $1,000; and/or campaigns that stood out for their effectiveness in drawing large numbers of contributors.

Benchmark figures for “successful” group fundraising campaigns

Costs in Planning and Processing Fees

The largest expense in planning a group fundraising event or strategy is the staff time needed to plan and coordinate the initiative. Nonprofits that do not invest time and energy in creating momentum for the event are unlikely to see substantial results.

Supporters may need encouragement and sometimes help in creating their campaigns and telling their friends, family, and colleagues about the giving opportunity. Nonprofits should therefore plan on devoting as much — if not more — time to developing and implementing a group fundraising strategy than they would to a more conventional online fundraising campaign. See the section “How to Exceed the Group Fundraising Benchmark” for suggestions on how to develop and implement a group fundraising event.

The second largest cost is the processing fees that the platforms charge for administering a group fundraising campaign. Each of the group fundraising sites has its own fee structure, which usually entails taking a percentage of the donated funds.

For more information on the fees associated with each group fundraising platform, refer to About Micro-Philanthropy’s comparison chart.

Benchmark figure for Processing Fees

Exercises to Help You Set Realistic Expectations

Nonprofit employees and fundraising consultants can use the benchmark figures mentioned above to set realistic expectations for their group fundraising event or strategy. A group fundraising strategy refers to the long-term steps taken to encourage supporters to create person-to-person fundraising campaigns on behalf of the organization. A group fundraising event refers to the short-term messaging and actions that result in campaigns being created.

The following exercises serve as examples for how the benchmark figures above can be put to real-world use. Please note that these exercises are intended to produce ballpark figures; the actual results of your group-fundraising campaign will depend on numerous factors, many of which cannot be predicted or controlled.

Exercise A: Determine the number of supporters who would need to create individual campaigns in order to reach an overall fundraising goal.

Step 1: Ask yourself how much money the organization needs to fully fund a specific project or program?

Step 2: Calculate the additional costs your organization will incur through a group fundraising service’s processing fees. (If you don't know which site you'll be using, multiply the amount you are trying to raise by the 4.4-percent average commission fee.) Add this number to the amount you are trying to raise to obtain the total amount you would require to fully fund your project.

Step 3: Divide the total by the benchmark figure for the average amount raised
per campaign ($692.80). This step assumes that the average amount raised by each of your supporters will correspond to the benchmark figure for average amount raised per campaign.

The resulting figure will correlate to the number of supporters who would need to create independent person-to-person fundraising campaigns for your organization to meet its overall fundraising goal.

Example:

Step 1: Overall fundraising goal: $100,000

Step 2: Processing fees: $4,400

Step 3: Total amount that needs to be raised: $104,400

Step 4: Divide by average campaign total $104,400 / $692.80

Number of supporters who would need to create a campaign: 151

Exercise B: Determine how much your organization is likely to raise through group fundraising.

Step 1: Ask yourself how many of the organization’s supporters are likely to volunteer their time and energy to create and promote a group fundraising campaign?

Step 2: Multiply this number by the benchmark figure for the average amount raised per campaign ($692.80).

Step 3: Deduct the amount of money your organization will have to pay in processing fees. (If you don't know which site you'll be using, multiply the amount you are trying to raise by 95.6 percent).

The resulting number correlates to the total amount of money your nonprofit can expect to raise using a group fundraising platform.

Example:

Step 1: Number of individual campaigns: 75

Step 2: Total amount raised through campaigns: $51,960.00

Step 3: Subtract processing fees: $2,286.24

Amount that can be raised: $49,673.76

An organization can side-step the goal of encouraging supporters to create group fundraising campaigns on their behalf by starting the campaign themselves and emailing supporters with a solicitation to donate money.

This plan would create dynamics that are similar to traditional online fundraising. The voice of your campaign would be the organization. The recipients of the solicitation would be existing supporters. As a result, this approach would produce results that correlate with the benchmark figures that have already been identified for traditional online fundraising.

How to Exceed the Group Fundraising Benchmark

Nonprofits that are ready to begin experimenting with group fundraising are encouraged to observe the following recommendations. These tips can be recalled through the mnemonic S.I.M.P.L.E., which stands for Strategy, Incentives, Message, Promotion, Luck, and Effort.

1. Strategy

Make sure that your organization has set realistic expectations for the amount of money it expects to raise through group fundraising and the number of supporters it expects to play an active role. Devise a long-term strategy and short-term plan for encouraging people to create group fundraising pages. Review the two exercises above to help identify your goals.

For more advice on planning a group fundraising campaign, refer to this ChipIn Widget Fundraising Case Study written by nonprofit technology consultant Beth Kanter.

2. Incentives

A number of articles have demonstrated that providing supporters with incentives will increase donations and response rates to action alerts, and this also applies to group fundraising. Individual group fundraising campaigns are more likely to succeed if they have a deadline, as well as an organization, corporation, or sponsor that will match donors' total contributions.

For more information on the role that deadlines and matching funds played in Kevin Bacon’s Six Degrees group fundraising event, read Katya Andresen's blog posting titled Asking For Money Online: What Works.
You might also consult Robert B. Cialdini’s article The Power of Persuasion: Putting the Science of Influence to Work in Fundraising.

3. Message

Nonprofits experimenting with group fundraising have two messaging challenges and must communicate with clarity and purpose. First, there is the messaging to your supporters inviting them to create group fundraising campaigns. Second, and more important, is the message that your supporters will relate to their friends, family, and colleagues through their group fundraising campaign.

Make sure that you have given your supporters wording, images, and video that they may need to successfully encourage their personal network to contribute, which will ensure that they do not have to spend the time crafting promotional materials themselves. However, some of your supporters may wish to modify the message to better solicit donations, and you should feel free to allow them to do so.

4. Promotion

Your supporters will carry the burden of promoting their respective group fundraising campaigns by emailing their friends, family, and colleagues about the event, but you can help by suggesting additional tips that may increase the number of donations. Resources such as Firstgiving's Best Practices guide and Network For Good's Tips for Successful Person to Person Fundraising With Online Charity Badges may give your supporters other ideas that will help them publicize the campaign.

5. Luck

Some of your supporters will be more connected to large social networks than others. The more of your supporters that you encourage to create person-to-person fundraising campaigns, the more likely you are to find someone who can quickly spread the word to sympathetic audiences beyond his or her immediate social network. This leap into other communities requires a stroke of luck, as well as an easily understood project.

6. Effort

Although the mnemonic for these tips spells the word simple, devising a group fundraising event or strategy is anything but. You will find that a significant amount of your organization’s staff time and energy goes into helping the campaigns succeed. Nonprofit employees should be cautioned that sustained effort is the most important ingredient to producing exceptional results with group fundraising.

Group fundraising is an exciting technology rising from the social-networking sphere, offering organizations a unique opportunity to reach new donors while still engaging the most steadfast supporters. If you can invest the time and effort necessary to meet the benchmarks referenced in this article, it might be time for your nonprofit to take its first step into the promising world of group fundraising.