Microphilanthropy 101

Like everything in the world, nothing is certain. Weather patterns shift, the stock market fluctuates, new technology trends emerge, and consumer behaviors evolve. No industry is exempt from the precarity of change, not even philanthropy. Historically, philanthropy was an exclusive activity of the wealthy, where guests would attend high profile events to write large checks or bid on coveted items. With the introduction of the web and social media, philanthropy is now more accessible and transparent to the everyday person. While microphilanthropy used to be seen as the underdog of philanthropy, it is beginning to punch well above its weight.

What is Microphilanthropy? 

As suggested by the name, ‘micro’ ‘philanthropy’ is any donation between the amounts of $0.25 and $10. As evidenced by popular personal finance apps like Acorns and Venmo, technology has provided consumers with greater autonomy and efficiency in peer-to-peer payments, investing, debt relief and savings. These same trends apply to charitable giving. Donors want the ability to give when they want, how they want, and with ease. Progressions in fundraising like spare change round ups and peer-to-peer crowdfunding campaigns capitalize on these consumer behaviors, providing seamless ways to support social causes.

A major benefit of encouraging micro-donations is that the barrier to entry is low, which means more first time donors will be able to contribute to the cause. This is particularly true of younger demographics as they are often cash poor and buried with student loans and other debts. The stats show these groups are generous as a proportion of their wealth. That’s why it’s critically important to thank donors individually, even at lower levels of giving. You never know what someone’s true giving capacity is or what it will be in the future. 

Unlike traditional annual appeals, where prospective donors are already known, many microphilanthropic initiatives (like peer-to-peer crowdfunding) encourage participation from networks outside your existing donor database. Activities like fun-runs and swim-a-thons that involve collaborative action also inspire donors to be more interactive and, therefore, connected to the mission. Donors who engage in social forms of philanthropy will naturally become educated and passionate. This translates to longer lasting relationships.  

Furthermore, since the donations are small, donors can afford to give more frequently and weave donations into everyday life. So, instead of giving once or twice a year, people may start rounding up their everyday purchases as an ongoing commitment to create impact. This model makes giving back a more integrated and fun part of everyday life.

Why Microphilanthropy?

Experts often caution investors against putting all of their eggs in one basket. The same principle applies to nonprofit fundraising. Since unprecedented change can occur at any moment, it’s important for nonprofits to avoid being too reliant on a single strategy or revenue stream.  

At the end of the day, there is no one-size-fits-all solution. The best thing that you can do for your organization is to evaluate your current channels and examine any loose ends or areas you may be overlooking. As the last few years of data suggest, microphilanthropy is a proven channel that not only builds larger donor lists, but also fosters longer term relationships between donors and the causes that move them. 

Richie Kendall is the Co-Founder and CEO of Cheerful — the all-in-one fundraising platform for modern philanthropy. Cheerful works with many of the nations’ leading nonprofits on innovative, high-impact campaigns for social good. Connect with Richie on LinkedIn.