Would you give to this? A new take on philanthropy

At the beginning of the year I came across a new social giving platform. Taking a cue from the success of Groupon and Living Social, Philanthroper has taken the idea of daily deals to the nonprofit world.

Philanthroper sends subscribers an email every day simply asking them to give US $1 to the cause of the day. It’s not much, but the goal is to get people to give small amounts each day. It’s a great idea, but I don’t see exponential growth anytime soon.

To their credit, they’ve built a smart product and they’re seeing growth. Highlighting one charity each day is creative, smart and unique. However, I see their current model failing to make a sizable impact for one reason – consumers have strong opinions about where they give.  It may only be one dollar but it’s often a morally complex choice.

Giving to a cause that educates children, is different than giving to a cause that teaches farmers in developing nations effective farming practices. A donor may believe that one is more important than the other. It’s not like choosing between two different types of tortilla chips in the grocery aisle. Giving to different causes is not homogeneous.

Now let’s take a look at some data. Here’s a snapshot of one week of causes on Philanthroper.

The average donation for the above week was $224.  Using this information let’s back into some figures.

Assuming the following:

• the daily email is driving 100% of donations
• open rate on the email is 50% (which would be well above industry average)
• click through rate is 15%
• 75% on site conversion

This means that for every $100 dollars of donation there need to be 1778 email subscribers.

As the average donation for the week noted above was $224 that would indicate that Philanthroper has 3983 email subscribers.  Fast forward to this week where the average donation was $585, and we can start measuring the growth of their reach.  Ignoring their social footprint our numbers indicate that their email list has grown to over 10,400 subscribers.  It’s good growth, but by definition, not exponential.

So, how should they increase their impact when growth isn’t taking off?  What I find most impressing is their ability to find their grantees.   Each day they seem to find a new nonprofit and I’ve never seen them repeat.  I suggest they take another tip from the daily deal companies and begin offering regional giving opportunities.  Not only will this expand the number of opportunities to give $1 a day, it will give many people more a reason to sign up and give.