How to Host an Online Fundraiser

I often get emails from other bloggers who are hoping to spearhead a fundraiser on their own site asking for general tips and advice.  While this information may not be interesting or pertinent to most of my regular readers, I thought it might be a more efficient use of my time to just do a blog post about it.  Hopefully this helps someone along the way!

{Disclaimer: I am not a lawyer and this is not intended to be used as legal advice.  I’m just a blogger who’s hosted a fundraiser a time or two, and this is what I’ve learned along the way.  So if you get into hot water, I don’t want to hear “But Jeannett told me so!”.  Read this and then do your own research.  Kisskissloveyoumeanit.  If you ARE a lawyer and have some suggestions on how to make this more thorough, please email me and let me know!}

What method of donation collection should I use???  There’s so many, I don’t know which to use!

There are a lot of different collection methods.  Each with their own pros and cons.  Here are three of the most popular:

• ChipIn widgets that use Paypal
• GiveForward
• Directly through the charity website

ChipIn/Paypal:

Pros:

-The service is basically a real time widget on your website that tracks your total fundraising efforts. (See cons on this)

-The fundraiser organizer is able to access a list that gives them the name and email address of each donor and how much they gave.

-Uses Paypal.  Paypal is a great tool since most people have an account and can impulsively give without searching for credit cards and entering in a slew of numbers and information.  A simple, pre-set username and password combo makes it easy and fast for people to give.  (I don’t know about the rest of you, but I don’t have my credit card numbers memorized so by the time I have to go downstairs, hunt down my purse, trudge back up and enter in 487 numbers into the computer, I’m over it.  Pathetic but true.)

-Can be used to fundraise for any cause or person, as long as they have a Paypal account you can link the money to.  Your fundraiser doesn’t have to be for a non-profit.  It can be for anything at all.

–Free for the Organizer to set up and use.

-There are no fees for the use of the ChipIn widget.

Cons:

-The widget doesn’t always update and requires clearing your browsers cookies to actually get it to work.  Annoying.  The whole point of an updating widget is seeing the progress and watch the “ticker” go up and up (which encourages even more giving!).  If your viewers don’t clear their cookies (and many people don’t do this regularly) they think that no one is giving…and it could discourage them from donating because they think the fundraiser is a bust.  Or, you just end up fielding a lot of emails saying “I donated but the widget didn’t go up!!!  Did it go through???!!!”

-There is NO CUSTOMER SUPPORT.  No email address, no phone number, nothing.  Just an FAQ, a hope and a prayer.  Luckily, it’s fairly simple so it should all work, but you’re on your own if it goes wonky.

-Paypal may take a cut of the donations in fees.  These change often and depending on different things.  See here for current fees.

–Paypal does not allow giveaways to be paired in conjunction with giving. (More detail on giveaways below)

-You have to have your own website/blog/space to host the widget.  There are no complimentary web pages and you are completely on your own in terms of advertising and spreading the word.  The ChipIn widget is best suited for established bloggers and folks versed in social media.

GiveForward:

Pros:

-They also have a widget feature, and it seems to be much more reliable and less picky about cookies and whatnot.  It’s also prettier in my opinion.  :)

-Organizer is able to see who gave and how much.

–Free to the Organizer to use.

-Can be used to fundraise for any cause or person, whether they are a non-profit or not.  So you can fundraise for a friend with medical expenses, a trip to Disneyland, a seeing eye dog, or a new pair of shoes.  Anything goes.

-One organizer can set up a “group” feature where they can host various fundraisers and see the total raised from all of the fundraisers.

-FANTASTIC customer service.  Quick, hands on, and very helpful.

-GiveForward is on Twitter and Facebook and will often re-tweet about your efforts, and depending on the success of your fundraiser, they might even feature your event on their main webpage.  This is great, because you’re not completely on your own.

-GiveForward is searchable and open to anyone…so there is the possiblity that a random (non-blog reader) stumbles upon your fundraiser and gives!

–Integrated with other social media platforms…people can Facebook “Like” your fundraiser and further spread the word directly from your GiveForward page.

–Complimentary webpages you can use to tell more of your story and host the widget.  You don’t have to be a blogger or have a website to use it.

-A blog with lots of fundraising tips and suggestions.

-You can host a giveaway in conjunction with your fundraiser. (more on giveaways below)

Cons:

-They take a cut of the donations in fees.  These fees tend to be higher than those with the ChipIn, because GiveForward is a business venture with more overhead and customer service.

-Donors have to enter in full credit card information.  This can be a discouragement since it takes time to go hunt down your wallet, and enter in all of the numbers.  Donating is not an “impulse purchase” this way.  (My understanding is that they are hoping to offer payment with Paypal soon though!)

-There is no storage of credit card information on the site, so if a donor wants to come back and donate again, or donate to another GiveForward hosted cause, they have to enter in all of the information again.  Some people would consider this a pro since it offers more security, but it can deter giving because it’s more “work”.

Giving Directly through the Charity website:

Pros:

–No additonal fees.  All of the donation money goes directly to the charity. (Although oftentimes the charity uses a payment collection system that they have paid for in advance…so your specific donations do not have a percentage taken, but the charity is paying for the use of the service in their overhead costs.)

-Donors may feel more comfortable actually “seeing” that they are donating to the cause rather than just trusting that you set it up right.

Cons:

-In most cases, there is no way to track what your group has fundraised (I learned this the hard way once!).  The donations all go to the general donation pool and there is no way to know how much you specificially raised or who gave or where they came from.  (Larger charities like the March of Dimes and Charity: Water do have group/team fundraising widgets and tracking, but most smaller foundations do not.)

-Oftentimes (if they do not have a Paypal button) donors are required to enter name, address, phone number, and all credit card information.  Again, this may deter giving as it is less of an impulsive act.

What’s up with giveaways? Why is this its own separate topic?

A popular method that many people (myself included) are using to encourage giving, is to offer a giveaway in connection with fundraisers.

Oftentimes, Organizers will say something like:

“For every dollar you give, you get one entry to win this fabulous prize!  If you give $6, you get 6 entries.  So the more you give, the more entries you get, the better your chances of winning!”

This can be a great tool and can certainly encourage giving…particularly if you’re giving away an iPad or something equally rad.  (I’m not sponsored by Apple or any such thing, I just think winning an iPad would be awesome.)

BUT, it can be fairly complicated too.  Here’s what I know:

YOU CANNOT HOST A GIVEAWAY OF ANY KIND IN CONNECTION WITH A FUNDRAISER IF PAYPAL IS INVOLVED.

Paypal considers giving someone an entry to win in exchange for money (donation) to be a lottery.  It sounds silly, but think about it: someone gives money, they get a ticket to win.  You have to buy an entry.  That’s a lottery.  And a lottery is in direct violation of PayPal’s User Agreement which has a “no gambling” clause in it.  Lotteries are highly regulated by Federal/State laws…and unless you’ve whipped up clearances to host a lottery, PayPal won’t be happy.  And unless you’re some high powered mogul with a team of assistants, you probably won’t be getting those clearances anytime soon.  Sorry.

But I see people do it all the time?  They can’t possibly be that petty!

You see the giveaway/donation model all over the blogosphere.  For sure.  But that’s just because those particular people haven’t been caught.  I (personally) know people who were hosting a fundraiser for a very noble and legitimate cause…in fact it was an established non profit!…and PayPal caught wind of the giveaway promotion and shut it down immediately…not only freezing the account during a 6 week “investigation”…but also threatening to make the organizer refund each and every donation…which would have amounted to HUNDREDS of refunds, and hours of time.  Instead (in this case) she was able to forward the money along to the charity eventually, but not before first getting all kinds of official documentation from their headquarters and ending the fundraiser early.  I know this all sounds really dramatic and petty considering the poor girl was just trying to do something nice out of the goodness of her heart…and it sounds like PayPal is the big bad wolf for getting in the way of a kind heart with silly legalese, but the truth is that PayPal doesn’t want State Troopers swarming their offices because they are aiding and abetting illegal lottery and gambling practicies.  (Okay, I made up that swarming part.)

At the end of the day, whether you think it’s silly or not, it’s not worth the hassle and headache if it goes south on you.  Or at least not in my opinion anyway.

But I really want to do a giveaway with my fundraiser…how can I make it work?

If you use a giving site that does not use Paypal…like GiveForward or a direct charity website that also gives you donation tracking results.   In other words, as long as you can see who gave (and how much) and PayPal isn’t involved, you should be able to host a giveaway with it.  BUT, don’t forget about that pesky lottery thing.  You still can’t host a mini lotto from your desk in suburbia.  In order to keep it legit, you have to offer a “No Purchase Necessary” way to win.  You know all those contests you see and the fine print tells you that if you just send in a postcard…you can win too?  Well, that takes away the lotto part of stuff.  Now you aren’t requiring payment for an entry…now, my friend, it is a SWEEPSTAKES.  And sweepstakes are kosher.

The bummer about a sweepstakes is that, basically, someone can win your fabulous prize without having given a dime to your cause.  And no, you can’t rig it so that those people don’t win.  That’s a no-no.  And there are people out there who actually make a living out of contest entering.  Not kidding.  They spend their days entering contests and win a bunch of cool stuff.  It’s crazy.  So you can find yourself with lots of “No Purchase” entries and very little donations.  But if a giveaway is something that you feel is important to the success of your fundraiser, it’s part of the gig.  Sorry.  Please don’t shoot the messenger.

Ooooohhhh…so that’s why I see stuff like “Like My Facebook Page” or “Follow me on Twitter” as an extra entry!!!

Um, yeah, that’s a problem too.  Apparently, you can’t give people an entry to win in exchange for liking you on FB or being your Twitter minion either.  You see, both of those platforms might like you and all, but that doesn’t necesarily mean they want to be affiliated (or perceived to be affiliated) with your fundraiser or cause. I don’t know that anyone’s actually gotten in trouble with FB or Twitter over this, but it’s technically not okay.

Great.  Now what?  You’re killing me.

I think that the easiest, least potentially damaging way to offer a No Purchase entry is to simply ask them to leave a comment in that post.  Ask ’em to say Hi.  What their favorite color is.  What they had for breakfast.  Whatever.  It’s boring and frankly…annoying.  That someone can end up winning a cool prize for simply telling you they like lima beans, when the whole *point* was you trying to do a nice thing and raise money for something near and dear to your heart.  I know.  But hopefully you’ll get more donations than you get creepers trying to snake free swag.

The moral of the story for giveaways?

If you feel the need to include a giveaway (and I do think they can be effective tools), be sure to NOT use PayPal, give people an extra entry just for leaving a comment, and be sure to be impartial when selecting a winner (keeping some kind of record/proof/screenshot is a good idea).

Another option is to simply offer a giveaway…not in connection to the fundraiser…but just for fun.  In the post body, simply remind people that you have a fundraiser going on and to please check it out.  Don’t forget to be ULTRA clear that odds of winning are not connected to donations received.  The point here is that the giveaway might drive traffic to your blog and give you an opportunity to just let people know other stuff you have going on.  “By the way, while you’re here entering to win this amazing prize, check out this cool fundraiser I’m hosting!”

In summary…

The really fun part of the internet is that its dynamic and interactive and relatively instant.  The other side of that is that rules, policies and laws can change and evolve without you even knowing you’re doing anything wrong.

Remember, I’m not a lawyer.  I’m just passing along the info I’ve gathered along my bloggy travels…if you ARE a lawyer, or you know something I don’t, please email me directly…I want this post to be as accurate as possible!  (even if it’s not legal advice).

{Disclaimer #2: GiveForward is one of my blog sponsors, but this post, and all reviews of their site is based on my honest opinion.  I would have included them in this post whether they were a sponsor or not…they’re just one of the many tools out there…and one of the few that I’ve used.  I can’t exactly review a site I havent used, so that’s the deal.}

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jeannett

I'm a mom to four. A wife to one. I believe in story. I love telling you about mine and would love to hear yours. There's really no sense in wasting our suffering and not sharing in each other's joy. We're all in this together...even if it doesn't always feel like it.

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