Hispanics In Philanthropy To Experiment With Crowdsourcing

April 15, 2014       Zach Halper      

Hispanics in Philanthropy (HIP) has been strengthening the Latino philanthropic community for 30 years but it will soon be stepping into unfamiliar territory: Crowdsourcing.

The organization announced recently that it plans to launch tomorrow an experimental crowdsourcing program – called HIPGive. Like most crowdsourcing sites, HIPGive will allow donors to give to participating organizations for a set time period via the Internet. The difference here is that the program will focus on raising funds and resources only for Latino organizations in the U.S. and around the world. It is believed to be the first online giving platform used for such purposes and will start with three separate campaigns during a six-month period.

The first of those campaigns, beginning on HIPGive’s launch date, will focus on raising money for small or medium-sized Latino nonprofits. To incentivize giving during this period, the Western Union Foundation (WUF) will be awarding funds to organizations that have the greatest number of individual donors or have the greatest number of Facebook likes and shares. In total, more than $30,000 in matching funds will be provided by the Foundation. WUF, along with the Kellogg Foundation and the California Wellness Foundation, provided seed money to get HIPGive up and running.

The next campaign, beginning in August, will focus on education. The final campaign will begin in the Fall though a theme has not yet been decided.

According to Diana Campoamor, president of HIP, 25 organizations have signed up so far. This response confirmed the main idea behind the HIPGive: That Hispanic organizations were excited to be part of a program that previously had not existed, she said.

“We checked with the nonprofits we’ve provided grants to and we found that very few of them are using crowdsourcing,” explained Campoamor. The idea for HIPGive has existed for years and, according to Alexandra Aquino-Fike, HIP’s director of new initiatives. There had always been a desire within the organization to find a way to get donors to fund individual Latino nonprofits.

“When crowdfunding started to take off we realized we really had to revisit this idea,” said Aquino-Fike.

In doing research of similar platforms prior to the announcement of HIPGive, Campoamor noticed a few things. Not only was there no resource for Hispanic organizations, but she also noticed that most platforms did not serve specific audiences at all. “Part of what we learned is that many of these programs are a general market,” she said. “We want to see if there’s a place for a niche market.”

Campoamor and her team also discovered that while there are hundreds of platforms out there, there are two or three that have the most use. To encourage organizations to participate in their new platform, HIP is offering a lower participation fee than most platforms: Three percent.

Given that this is HIP’s first attempt at hosting a crowdsourcing platform, the organization is treating the launch of HIPGive as a learning experience. Because of that they don’t have a hard goal they need to reach in order to consider it a success, though Aquino-Fike said she has high hopes that at least half of the participating charities meet their targets.

“This is definitely an exciting experience for us,” she said. “Traditionally, we have not targeted individual donors.”

Aquino-Fike said that HIP will be providing training materials that will explain everything the organizations need to know about crowdsourcing. HIP will also carefully vet every nonprofit that applies to ensure they have the capacity to participate.

“We’re really supporting them every step of the way so they can meet their target,” Aquino-Fike said.

Aquino-Fike said that, so far, the hardest part about HIPGive has been marketing. Although they were able to get those 25 participants for the first campaign, she explained that it is vital that the site gains traction with donors. To help with spreading the word, HIP hired a marketing agency which has been distributing information about the site to various news outlets.

Ginny Mies, a staff writer at San Francisco, Calif.-based TechSoup Global, said that crowdsourcing is appealing for nonprofits like HIP because it makes it quick and easy for donors to support a wide variety of organizations using virtually any platform. “I think people also feel like they’re truly part of something when they donate or support a crowdfunded project or campaign,” she added. “Many platforms let backers share comments about the campaign. It’s a great way to feel some sort of virtual solidarity with like-minded donors.”

Despite this positivity, Mies warned first-time crowdsourcing users to be wary of potential fraud. She said you can minimize this risk by putting making a statement on your site that states clearly how the organization will handle fraudulent donations or organizations. This is a warning that HIPGive has heeded, as a notice on the site states that HIPGive will review all proposed fundraising projects to vet out fraud, and they have strict guidelines on which kind of organizations can participate.

As for potential fraudulent donations, Aquino-Fike said they have partnered with the processing company WePay which will process all donations. “We carefully choose WePay to process the donations made on our platform after reviewing their fraud risk management policies and systems – including their proprietary risk engine, Veda,” she said.

Aquino-Fike added that should they be made aware of suspicious activity, they will “take immediate action to review the risk and respond accordingly to protect our users and donors.”

Given that this is HIP’s first foray into crowdsourcing, Campoamor expects there will be some rough waters in the beginning. “Over the next months, we realize we’re going to have glitches so we’re looking to work through that and learn how we can improve,” she said.

“This is almost like a start-up, so we’re facing the same kind of issues,” added Aquino-Fike. “We want to make sure everything runs as smoothly as possible.”

The future is not certain for HIPGive after their three campaigns are finished, but both Campoamor and Aquino-Fike hope and expect that there will be more opportunities to use it in the future, and there is already talk internally of eventually allowing individuals and entrepreneurs to participate rather than just nonprofits.

“Our goal is to have this platform around forever,” said Aquino-Fike. You can learn more about HIPGive by visiting http://hipgive.org/