Making an impact even with a little

You don’t need a fortune to be a philanthropist. For example, you can:

Start a charitable fund. A number of community foundations let you funnel as little as $1,000 a year into donor-advised funds, and let you choose the recipient. You contribute cash, stocks or other property — and take a tax deduction for your contribution each year — until you reach a certain threshold, typically $5,000 or $10,000.

Give to a classroom. What better way to spend your charitable dollars than to help teachers help kids? At DonorsChoose.org, you get your pick of teacher-proposed projects. DonorsChoose makes the purchase and sends it to the teacher.

Volunteer on vacation. Use your next vacation to give something back.

Or you can be an angel for as little as $100: Upstart allows you to give money to entrepreneurial college graduates. You can invest in $100 increments in one “upstart” or as many as you choose. You’ll receive a modest portion of the company’s income — up to an annual rate of return of 14.99 percent — for 10 years.  You can also contribute to projects through Kickstarter, which focuses more on creative individuals who want to raise money to produce films, music and art.

Tip on deciding on how much to give to an individual charity

Most of us feel generous in December, the top month for charitable donations, reports the Atlas of Giving. But regardless of when you give, you want to make sure that the funds are actually used to do real good.

A 2012 study from the Chronicle of Philanthropy reports that the median amount American households donate to charity each year is $2,564. That’s a nice chunk of change, but not if you’re divvying it up among dozens of organizations.

“For every gift, there are fixed costs associated with stewarding and tracking it,” adds Patrick Rooney, director of the Center on Philanthropy at Indiana University. “So the smaller the gift, the larger the percentage that goes to transaction and administrative costs.”

Jason Franklin, who teaches nonprofit management and philanthropy at New York University and is executive director of Bolder Giving, a nonprofit focused on helping Americans give more effectively, suggests using the 50/20/30 rule: Half your giving should be focused on one charity — the gift you’ll spend the most time thinking about.

Then set aside 20% for small impulse gifts and the final 30% for institutions you support on a regular basis, like your alma mater or your church.

Weibo philanthropy in China

Nine months after Ma Chunhua’s baby was born, she was diagnosed with leukemia. Ma, a low-wage worker in Hubei province, said she grew desperate, knowing her family couldn’t afford the chemotherapy and bone-marrow transplant needed to save her baby. So she turned to China’s online masses, tweeting pictures from the hospital and posting their plight.

Chinese citizens are increasingly depending not on their government nor officially sanctioned nonprofits, but on Twitter-like microblogs called Weibo for donations.
The emergence of Weibo philanthropy has been spurred on by widespread suspicion and exasperation among Chinese with their government’s decades-long stranglehold over the social assistance and charity sector.

Current laws prevent the existence of any nonprofit unless it is partnered with a government-related entity. Even then, such groups cannot raise money — a right reserved for a small number of government-controlled charities.

And for the ruling Communist Party — in the midst of a once-in-a-decade transition of leaders — the trend towards Weibo fundraising suggests a troubling disconnect. The fact that increasing numbers of citizens would rather donate to random strangers online than to state-managed charities points to a growing distrust in government institutions. And donations to official charities has declined over the past two years.

“Weibo is putting great pressure on the government because it shows that if they don’t solve basic problems they are responsible for like food and health, the people will solve it without them,” said Deng Fei, a former investigative journalist.

The philanthropic force of connected giving

As governments around the world pull back, the philanthropic sector will be a critical force in meeting global needs. In what is called the “Giving Pledge”, 81 billionaires have committed to give more than half of their wealth to charitable organizations.  This level of philanthropy, over $37 billion by Warren Buffett alone, is historically unprecedented.

Warren Buffett most lasting contribution will not be his money; rather that he has successfully leveraged his social network and the media to inspire other billionaires to give extraordinary wealth for charitable good.  He is reshaping the way the rich think about money and giving.

And in the same way Warren Buffett has used media to get other billionaires to pledge their fortune to charity, people all over the world have used social media to raise money and inspire their network to join them in giving.

Indeed, according to Blackbaud, people are 200 times more likely to donate to a cause if their friends ask them to support a charity, in comparison to receiving an e-mail solicitation from the organization.  This is part of a distinct cultural shift – you no longer have to be a professional to be a fundraiser.

With the rise in connected giving will come the use of social data for fundraising.  Seventy percent of Millennials ages 20-35 report they prefer to give online, making online giving as the #1 preferred method of giving.

The IDC, a technology research firm, estimates that the total amount of data doubles every two years.  Social media data is a major part of this growth.  Marketers are interested in the “social network value” of a customer– how one person’s purchase influences others to buy a product.  Similarly, nonprofits are becoming aware how a donation can have a ripple effect in the donor’s network.

–Matt Bishop, founder and CEO of iGiveMore