Money “Laundering” And The Future of Fundraising

March 1, 2016       Steve MacLaughlin      

The annual Consumer Electronics Show (CES) recently convened in the glitzy oasis that is Las Vegas. The buzz was all about autonomous automobiles, drones, gadgets, wearables, and all of the indulgences from the Internet of Things.

Another new technology application making its debut at CES was the world’s first charitable washing machine. The separate press releases from Whirlpool and IBM described it as the “Whirlpool Smart Top Load Washer and Dryer enabled with Connect to Care program.” In short, customers have the option to make a per-washer load charitable donation to Habitat for Humanity through a mobile app connected to the washer. When you buy the washer/dryer it comes with a mobile app that you download. That app connects to the machine and one thing that it lets you do is donate.

As you might imagine, the response on social media was plenty of 140-character snarky comments about spin cycles and static cling-free stewardship. Some even wondered if April Fool’s Day had arrived early. But everyone should be reminded of Marshall McLuhan’s wise words: “We drive into the future using only our rearview mirror.”

Let’s suspend the natural skepticism for a moment to consider what a washer/dryer that donates to charity means for the future of fundraising. First, Whirlpool and IBM working on analytics of connected appliances is a preview of things to come. Technology offers some amazing possibilities to connect supporters with the causes they care about and nonprofits they support.

The future will also allow us to leverage the data from all those connections in meaningful ways. Now, you shouldn’t expect the average nonprofit organization to be running a four-node Hadoop cluster to sift through data. But behind the scenes, that kind of technology will surface to give fundraisers key insights.

No one likes to hear this, but the key to getting data right begins with having the right data. The average nonprofit has 18 percent of its donor file with invalid postal addresses. Email became mainstream nearly 20 years ago and yet the average nonprofit is missing email addresses for 74 percent of their supporters. It’s time to adjust the mirrors and get the holes in your data filled.

Second, the use of mobile to make a donation isn’t the future – it is reality. Data shows that 14 percent of online donations were made on a mobile device during 2015. The modern donor is a mobile donor and the importance of what is happening here cannot be overstated. The app-focused micro donations of 15 cents, 25 cents and half a buck that Whirlpool is testing is something to watch.

A little mobile technology combined with Big Data and machine learning will also change how fundraisers do their jobs. We’re already used to mobile agents in our daily lives such as Apple’s Siri and Amazon Echo. It’s not going to be long before fundraisers use mobile agents to help them make decisions, alert them to new information, and get that lapsed donor report the boss wants.

There are two sides to mobile you can start taking seriously right now before the fundraising robots arrive. Externally, all digital communication from the website to email and social media needs to be mobile friendly. If you’re not mobile first, you’re going to end up last.

Internally, nonprofit managers need to embrace mobile as a way to increase use by more staff of the systems they’ve invested in. Reject the idea that such-and-such just won’t use the computer to file their donor contact reports and stick a mobile device in their hands.

Third, the power of suggestion and social influence has proven to sway behavior. Whether it’s changing how people use towels in a hotel room or pouring a bucket of ice water over your head, the resulting network effect can have positive impacts on society.

That is what social proof is — the phenomenon where people often look to others for cues concerning the correct behavior in a situation. While it’s true that social media is more about friendraising than fundraising, the long-term influence shouldn’t be discounted in a world of social networks.

After looking through a ton of data, it’s clear that social media plus peer-to-peer fundraising does work. All the cool kids are now calling it crowdfunding, but the concept has been around since the early 1900s. All we’ve done is remove most of the friction and connect over a billion people to it. Make an effort in 2016 to experiment with social media as part of a crowdfunding project and stay engaged with those supporters afterward.

If none of those reasons convince you to care, perhaps the fact that Whirl­pool will directly donate a minimum of $95,000 and up to $100,000 to Habitat for Humanity in 2016 should be noted. Just 5 percent of charitable giving comes from corporations with a lot of that being made up of in-kind donations. Every successful partnership counts these days.

Corporate Social Responsibility (CSR) programs have been all the rage in recent years, but many in the nonprofit sector are equally skeptical about these initiatives. Regardless of where you fall on this debate, the reality is that corporations and nonprofits have mutually-beneficial reasons to work together. The growth of the social conscious consumer is with us to stay. Those habits eventually make their way into the mindset of donors too.

Corporate leaders are starting to see the convergence of trends across consumers, employees, and Millennials. A recent survey by America’s Charities found that 92 percent of respondents noted their customers expect them to be good corporate citizens and 88 percent believe effective employee engagement programs help attract and retain employees.

Also worth noting is that 60 percent of companies surveyed run year-round giving programs. Fundraisers should con­tinue to invest in both corporate partnerships and cultivating matching gift opportunities.

That brings us back to a washing machine that makes a donation to charity. Of course, that’s not really what’s happening here. It’s actually an exciting theatrical trailer that gives us a look into the future of fundraising. All of the really good parts lie ahead of us in the main attraction.

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Steve MacLaughlin is a director of analytics at Blackbaud. His newest book, “Data Driven Nonprofits,” will be published in 2016. His email is Steve.Mac­Laughlin@blackbaud.com

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Editor’s Note: This story was updated to clarify the relationship between technology companies.