During the 2012 holiday season, the growth in online giving outpaced the growth in e-commerce. This season promises to grow even further. One reason is crowdfunding. Blackbaud, which offers technology for fundraising, estimates crowdfunding campaigns made up about 10 percent of online donations, bringing in $2.4 billion to charities for all of last year.
Small charities are using websites like Fundly, Indiegogo and Causevox to raise money for a wide variety of causes. Crowdfunding solicits small amounts of money from a large number of individuals to finance a project by leveraging social media sites like Facebook, Twitter and LinkedIn to reach out to networks of friends, family and colleagues.
While it makes up a small slice of the $300 billion in total charitable contributions, crowdfunding has the potential to increase giving. Nonprofits see it as a good way to engage the younger crowd who want to feel their donation is making an impact.
"Giving a small amount of money to a larger project is a way that they can feel like they are accomplishing something," said Cody Switzer, The Chronicle of Philanthropy's web editor.
He added these online campaigns can help charities cultivate the next generation of givers, "getting donors involved in your cause at that small level is a good way to get them to the next level, and make them lifetime donors, especially those younger donors who have years and years to give."