The lightning speed evolution of technology has transformed every aspect of our daily lives—how we work, learn, shop and communicate. And as the COVID-19 pandemic kept us homebound for months, it further increased our reliance on digital tools and made the virtual feel more real-life than ever before.
But the nonprofit sector regularly lags behind in digital evolution due to the substantial cost to obtain new technological infrastructure and the expertise to use it—barriers that are often easier for for-profit businesses to overcome. However, for donors, who are increasingly accustomed to the ease and convenience of digital tools in every other area of their lives, a frictionless digital experience is quickly becoming non-negotiable.
1. Technology and social media are creating new ways to engage in philanthropy.
Donors are increasingly going online to participate in giving—using digital tools and platforms for everything, from making transactions to choosing which causes to support. While significant numbers of donors are using these tools, the movement is being led by Millennials. The younger generation is much more likely to have used mobile devices, social media and other digital tools to engage in giving.
Digital trends in giving
Made a donation using a mobile device
Donated through a social media platform
Made a donation after learning about a cause/organization on social media
2. Donors are increasingly engaging in direct giving online.
Giving money directly to an individual or family is not a new practice. Though it does not get measured to the same extent as traditional charitable giving, it is one of the most tangible ways to provide help and support to someone in need. With their emphasis on seeing results, it is perhaps not surprising that younger donors engage in direct giving more than their older peers.
And digital platforms—which make it easy to find and contribute to grassroots fundraisers for anyone for any reason—are amplifying this trend further. Nearly 60 percent of Millennials have donated to individuals through an online giving platform, such as GoFundMe. They see a need and have an easy, convenient way to address that need immediately—often with the help of hundreds or thousands of strangers from around the globe.
Digitization of direct giving
Gave money directly to an individual
Donated to individuals through an online giving platform (GoFundMe, Patreon, etc.)
"People want to see impact, whether you’re a big high net worth donor or giving $10, you want to understand, “Is this going to make a difference in someone’s life?” And when you give directly to a person who’s running an individual campaign, you can feel it more. What comes when you give to a person is an emotional connection. The person who receives those funds can say ‘thank you’."
-Tim Cadogan, CEO, GoFundMe
3. The pandemic increased our reliance on virtual tools and accelerated digital trends in philanthropy.
As our lives became increasingly virtual due to the COVID-19 crisis, charitable giving followed suit. A January 2021 survey explored additional ways that donors used digital tools for philanthropy in 2020.
For example, nearly six-in-ten donors made a donation on a charity’s website in 2020, and 18 percent said they did this more frequently than in the past. And a third turned to online resources to research a cause or organization, with 12 percent saying they did so more frequently in 2020. While cell phones and other devices were already well on their way to becoming mobile philanthropy machines, the COVID-19 pandemic may accelerate this trend.
Digital giving amid the COVID-19 pandemic
Made a donation on a charity's website
Used online resources to research a cause or charity
Contributed to a cause after hearing about it via email
Shared a charity's post on social media
Attended an online/virtual event for charity
Technology will give donors access to a new menu of options.
As more donors turn to online tools to research their grantmaking choices, new giving platforms could use big data and artificial intelligence to enable matchmaking between donors and giving opportunities. This could be particularly beneficial for donors who wish to think outside their usual giving patterns or to make strategic gifts that take into account other factors, such as racial or gender equity. Volunteerism could also be transformed as more donors look to get involved with organizations in new virtual ways or outside their local communities.
Nonprofits that are unable to adapt to digital trends could struggle to succeed.
Charities’ budgetary restraints could keep them from obtaining the resources and expertise to competently operate in the new digital landscape. Obtaining this technological infrastructure—which would enable organizations to deliver services more effectively and efficiently—requires funding from donors, who often prefer their contributions to be used for direct services and programs.
Technology and social media could redefine community and build the foundation for greater collaboration among donors.
Many donors prefer to support causes in their local communities where they can see the impact of their gifts more tangibly, but virtual tools could help overcome the bias toward local giving and connect donors to global issues and organizations.
Digital platforms could also help transform collective giving by bringing together likeminded donors and connecting them with the projects that need their support. One format for this type of collective action could be virtual giving circles.
Donors will increasingly engage with the platforms that streamline giving and integrate it into what they are already doing online.
As the speed, security and privacy of digital asset transfer strengthen—and if trust in major institutions continues to erode—more donors could embrace direct giving platforms so they can see the immediate impact of their donations. Tech giants such as Facebook and Google could become leaders in the philanthropic space with their own giving solutions based on their existing relationship with the donor. With this shift, donor giving could become less strategic and proactive and more impulsive and reactive to the posts and fundraisers they see in their social media feeds.