The year 2020 has been a chaotic year for people all over the world, but especially detrimental to nonprofits.
As someone who is passionate about the nonprofit sector, I often volunteer my time and donate when I can. This year I wanted to participate in Giving Tuesday, a global movement for giving and volunteering on Dec. 1. I went on the givingtuesday.ca website and inputted the name of the charity I wanted to donate to, my city, and my province. I then selected the charity and was brought to the Canada Helps website to fill in my personal information. If I wanted to support multiple charities, this process would have been frustrating. After looking at Canada Helps, I realized you could create an account to keep your address and payment information in one place. However, this was not obvious through the charity links on the Giving Tuesday page.
I was also interested in contributing to the Times Colonist Christmas Fund, which collected readers’ donations to redistribute to needy Greater Victoria families. However, I found the process of donating quite frustrating. I was given three ways to donate. The first way was to phone a local area code number, the second way was to mail in a cheque, and the final way was to use Canada Helps to donate. This got me thinking. I am a part of Gen Z and my generation cares about corporate social responsibility and helping those in need. We also use technology to do everything in our lives and it’s surprising that donating to charities is not more ingrained in our everyday lives. Donating to Giving Tuesday and the Times Colonist Christmas Fund felt a little archaic. I no longer call the taxi line because I prefer Uber. I no longer watch shows using cable because there are Netflix and Disney+ options, and I will almost always check Airbnb before hotel listings when I travel and book accommodations. These apps and platforms have adapted to how Millennials and Gen Z prefer to live their lives, but nonprofits are still using legacy platforms to collect donations.
I have many friends who are activists for issues such as homelessness and disability rights. One friend, let’s call her Larissa, has made posts on her social media calling for donations to women who need help covering their rent due to a recent layoff or need help with meals and small bail funds. All of these donations are done through e-transfer. Yes, strangers in Canada are sending other strangers money to help them out. This mirrors the trend of strangers Venmoing strangers in need in the United States.
Caitlin Dewey talks about how Cash App and Venmo have upended the century-old charity model, and I can see that this is becoming more popular in Canada. The article “Cape Breton Man Relying on the Kindness of Strangers to Buy Musical family Heirloom” posted by The Chronicle Herald highlights this switch. Rudy Pacé raised a large portion of the $2,800 needed to purchase a family heirloom for his friend Duane Nardocchio using traditional methods but provided an email for e-transfer to fundraise the rest. This switch of using less traditional giving platforms to give focuses on ease and simplicity. Another similar story, “Strangers step up after cash stolen from Orillia senior’s wallet” was posted by Orillia Matters, highlighting alternative donation methods. Taisto, an 81-year-old grandfather, had strangers on the internet e-transfer him $380 to replace the missing money from his dropped wallet within 3 hours.
Here are some key findings from Interac Corp.’s study results released on September 28, 2020. There has been a 55 per cent growth in overall Interac e-Transfer transactions between April-August 2020, in comparison to the same period last year. More than 64 per cent of Millennials and 58 per cent of Gen Z increased the frequency of their use of digital payments during the pandemic. A total of over 66 million Interac e-Transfer transactions took place in August 2020 alone, with the total between April and August being 325 million Interac e-transfers. The Interac survey found that 33 per cent of Canadians used Interac e-Transfer to send money to friends or family members in need during the pandemic. This number is likely higher since e-transfers to strangers in need were not captured.
Despite my personal and friend’s personal success stories with this way of giving, direct digital giving has risks, both for the donor and recipient. Scams are unfortunately common and fact-checking backstories isn’t the easiest. This movement toward direct giving could also threaten the traditional ways of giving in the charitable sector in the long-term, especially given the pressures from COVID-19 and cancelled fundraising events.
Philanthropy is inherent in human nature. Despite economic uncertainty, 83 per cent of Canadians agree that charitable giving is a good way for them to make a better place, and 93 per cent agree that even helping charities a little bit is always worthwhile. Great recession statistics show that in times of hardship, people tend to be more generous. But the way people give has shifted during the pandemic. It went from a traditional, in-person donation method with cash to virtual donations with little face to face interaction. People have grown more familiar with the once-foreign concept of direct digital giving, and the pandemic has spurred a higher adoption rate of digital giving. According to the Bloomberg analysis of United Nations data, Gen Z accounted for 32 per cent of the global population, and Millennials accounted for 31.5 per cent of the global population in 2019. This means that 66 per cent of the population are digital natives. The current shift to digital giving, coupled with traditional fundraising events being near impossible due to COVID-19, makes this a trend that nonprofits cannot afford to ignore.
Currently, the biggest group of donors are Baby Boomers. They gave more than 40 per cent of total donations since 2000 but will be retiring soon, with the oldest Baby Boomers turning 74 next year. The oldest Millennials are 39 years old today, and Millennials and Gen Z will have more decision power in just a few years. Nonprofit organizations need to adopt digital solutions or get left behind by more agile alternatives that have embraced digital engagement and fundraising solutions.
Nonprofit organizations might believe that adopting digital solutions is costly, but the truth is that the benefits could likely outweigh the cost. Nonprofits often use legacy technology and are not tech affluent. Often nonprofits are not even aware that they can find better software solutions for free or at a reduced cost through a membership to TechSoup Canada. They are not aware of or entirely using the capabilities of free event hosting platforms such as Eventbrite and Facebook. They might also be unaware of fundraising solutions that make giving a more regular part of donors’ daily lives. For example, Green Apple Pay allows donors to make a microdonation automatically every time they make a purchase with a linked debit or credit card to the charity of their choice. All these platforms are virtually free to use. For a technology that comes at a higher upfront cost, the opportunity to cut costs in the long term and allow nonprofits to gather and analyze data about their donor base and utilise big data to build stronger connections with their donor base is invaluable.
Since such cheap and free options exist, there isn’t an excuse for nonprofits to ignore the rise of digital giving to stay ahead of the curve. Since many of the nonprofits struggling the most during the pandemic are grassroots, they could maintain both solidarity and the efficiency of direct giving, with the added guardrails of knowledgeable employees and formal procedures and legal contracts. There is also clear evidence that 2/3rd of our population are digital natives. This means that nonprofits must look at adopting technology-based solutions for the long term, rather than short term. Finding digital options that mirror what individuals are doing with Interac e-transfers already would enable nonprofits to face the changes and challenges ahead.