Online philanthropy is increasing, and Giving Tuesday is helping to raise awareness of donating to charities as part of web commerce.
Giving Tuesday is Nov. 29, and in its fifth year, it has become one of the top five days for online giving, says Steve MacLaughlin, vice president for data and analytics for Charleston, South Carolina-based Blackbaud, a provider of cloud software to the nonprofit sector. Blackbaud has tracked online giving trends for the past decade.
Online charity grows. While online giving as a whole is still less than 10 percent of all charitable giving, online donations growth rates are increasing quickly.
Sandra Miniutti, vice president of marketing at Glen Rock, New Jersey-based charity watchdog organization Charity Navigator, says online giving grew by 9 percent last year, while overall giving grew by 2 percent, which suggests that people are becoming more comfortable hitting the send button for donations.
"With online giving there's more tools for monthly giving, too. You can do a set it and forget it," Miniutti says, versus writing a single check once a year.
Giving Tuesday is starting to be seen as a kick off to the whole "giving season," when people who are looking for last-minute tax deductions by Dec. 31 ramp up their charitable donations.
The Belfer Center for Innovation and Social Impact at 92Y in New York created the idea of Giving Tuesday and specifically chose it to follow Black Friday and Cyber Monday, two of the biggest shopping days of the year, says Asha Curran, chief innovation office and director of the Belfer Center.
"After two days of getting deals, Black Friday and Cyber Monday, we wondered if we could create a day to focus on giving -- that's how the idea of #GivingTuesday came about," she says. "We were -- and are -- convinced that social media has tremendous power to reach large numbers of people, and it's our responsibility to harness that power for good."
Last year, 700,000 people participated and raised $116 million for charities, according to the Giving Tuesday organization.
How it helps. Organizations can officially join the Giving Tuesday movement, and many smaller charities get more visibility when they do, MacLaughlin says. Blackbaud says since 2012 there's been a shift to small and medium nonprofits receiving donations on that day.
"There's so much more media awareness generated, and that heightened awareness helps the smaller and medium-sized nonprofits," he says. "It also gives them some legitimacy and gravitas that they are part of this larger movement."
Jason Friedman, chief of development and growth officer at Chicago-based One Hope United, which runs community-based support programs for at-risk youth, saw a rise in donations from $2,000 in the first year they participated to $5,000 last year and this year they've set a goal for $10,000. The social media aspect of Giving Tuesday also helped beyond the monetary donations.
"There's the brand benefit and the buzz created on a day that's devoted to organizations that do great work," he says.
Joe Flint, senior development director of Evanston, Illinois-based adoption agency The Cradle, says Giving Tuesday is "extremely successful" for them. He says their donors seem to like to be part of participating in a national movement, and it has encouraged some donors to give more because The Cradle had a partner matching donations that day, and encouraged some new donors.
Blackbaud's statistics back that up, MacLaughlin says. The average gift to a nonprofit under $1,000 is $50, he says, while the average online gift is closer to $154 for small and medium nonprofits. This can make a serious difference to a charity.
It's hard to tell whether Giving Tuesday had increased donations or just shifted when people donate, Miniutti says, noting that for the past 40 years, giving in America has held steady at about 2 percent of gross domestic product.
How to give. Just like shopping on Black Friday, it's important to not get caught up in a donating frenzy.
"It's important to be a proactive giver and not a reactive giver," Miniutti says. "That's when you can make a mistake."
Registered 501(c)3 charities who join Giving Tuesday with a specific campaign tied to the day are listed on the organization's website, givingtuesday.org. Even if an organization doesn't partner with Giving Tuesday, most charities have donate buttons on their websites and details about their work.
Nancy Doyle, author of "Manage Your Financial Life," says for people who are interested in a charity, the more transparent organizations are on their websites, the better.
"Go on the website and look at all their communication materials. In the past if they've communicated results about initiatives to their donors, you can be confident they'll do that going forward," she says.
Doyle says donors should practice what she calls "venture philanthropy." Just as a venture capitalist invests in and takes an active role in a rapidly growing company, a venture philanthropist can use those same tactics to support a charity, she says.
"Venture philanthropy is a more thoughtful approach to giving," she says. "People tend to focus on a smaller number of initiatives, they do more due diligence and they also expect results."
Both Doyle and Miniutti say once donors find an organization that aligns with their passion, they need to look at the charity's financial health, commitment to be accountable and transparent and look to see if the results of the charity's work brings about the changes they're hoping to accomplish. Much of this is available online. In addition to Charity Navigator, other charity watchdogs include Charity Watch and GuideStar to help donors independently assess the organizations.
"More organizations that I've spoken with and worked with will provide specific results and benchmarks to donors because they know they'll expect them," Doyle says.
Debbie Carlson has more than 20 years experience as a journalist and has had bylines in Barron's, The Wall Street Journal, the Chicago Tribune, The Guardian, and other publications. Follow her on Twitter at @debbiecarlson1.