In recent years, the amount of philanthropy from average-income Americans has decreased, while the wealthiest individuals in the country give more. This trend has some implications for nonprofits, which may face pressure after accepting larger grants from major donors and feeling forced to compromise their mission.
One of the emerging tools that has empowered average Americans to support charitable causes is crowdfunding, which has had an incredible impact. However, crowdfunding usually surges after a major news event, such as a natural disaster or a political crisis. As a result, organizations that need more sustained support have begun to struggle.
The Problem of Vetting in the World of Charitable Giving
Some industry analysts have pointed out that, while donating online has become easier than ever before, people often don’t know where to direct their smaller gifts without the pressure of a significant news story. Most people won’t go through the work of vetting the many nonprofits asking for donations, especially when they only have a limited amount of money to give. Wealthier donors usually sidestep this issue by using funding intermediaries like the Robin Hood Foundation or Proteus, which serve as middlemen between donors and charities. These organizations curate portfolios of nonprofits focused on certain issues so that donors have an easier time deciding which organizations to support.
At the same time, donors making more modest contributions often feel like they are left to figure out the complicated system themselves. One suggestion to address this involves curating funds that use crowdfunding technologies to appeal to everyday givers. Some newer organizations have risen to address this need, such as Amplifunds. This organization maintains a website of issue-based portfolios of nonprofits and seeks to connect everyday donors to grantmakers and other people who have expertise in particular philanthropic causes, such as animal welfare, racial justice, and education. People can donate to the portfolio of their choosing, and their money is evenly distributed across the different nonprofits included.
Another new organization that’s taken this idea a bit further is ALMA, which was founded by two former employees of Airbnb. Much like Amplifunds, ALMA allows individuals to donate directly to curated funds, each of which contains about five charities working on similar issues. However, people can also use the platform to find volunteer opportunities so that they can support the causes they believe in with their time as well as their money.
How ALMA Could Address Unmet Needs in Philanthropy
ALMA sprang from conversations that happened after the 2017 wildfires in California. The cofounders saw that many people wanted to donate and help out, but there was no central place to give. Similar issues arose in relation to tackling homelessness and other broad social issues. The cofounders decided they wanted to create a seamless platform for people to connect with the organizations working on the issues they consider important. Most people understand the impact of crowdfunding, but most crowdfunding platforms do not vet the causes people can donate to. Curating a selection of nonprofits helps people become more proactive rather than reactive in their donations.
The team at ALMA envisions their platform as the equivalent of something like the Robin Hood Foundation for small-scale philanthropy. The team looks for organizations that are addressing root problems and creating plans for long-term impact. The curation involved is quite extensive. The first fund created, called Seeking Shelter, focused on the problem of homelessness in San Francisco. While creating the fund, ALMA consulted with academics, thinktanks, and the San Francisco mayor’s office to get a full understanding of the issue and the different approaches that have the greatest potential for making a real impact. In general, the nonprofits in ALMA’s portfolios are vetted using three basic questions, including why the organization exists, what it does, and how it measures impact.
The Future of Crowdfunding Platforms Like ALMA
The future of ALMA is not quite clear. Although the organization relocated its headquarters from San Francisco to Washington, DC to have more of a nationwide appeal, the majority of donors are still from the Silicon Valley area, and the fund that has received the most support was made to help people affected by the Camp and Woolsey Fires in California. However, the platform is working diligently to open opportunities and address some of the shortcomings that currently exist in the philanthropy community. For example, ALMA recently created a feature through which community members can curate funds. This feature allows communities to identify the organizations they feel have the greatest ability to address their particular needs.
At the same time, it’s unclear whether the existence of organizations like Amplifunds and ALMA will really encourage more giving from everyday Americans. The future of such organizations depends on their ability to connect with people who want to give and to show them the benefits of donating through funds. These organizations can certainly simplify the giving process, so there’s real potential for growth, especially considering that ALMA is also focusing on the post-donation experience, which involves informing people of what their donation helped accomplish. This sort of link to the real work being done on the ground could give everyday donors an experience much more akin to that of major philanthropists.