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The Business of Giving: Microgiving


Even tiny donations can make huge difference.

Nonprofits are increasingly interested in the Web, since it enables even the youngest in our society to make a huge impact. I'm talking about microgiving.

It may be a new buzzword, but it's really been around since the March of Dimes was founded by President Franklin Roosevelt in 1938. We learned then, when people in the thousands sent dimes directly to the White House to fund the fight against polio, that lots of people contributing small amounts can make a tremendous difference.

Fast forward to 2008. While the United Nations Foundation has been battling malaria for years, it was a Sports Illustrated (TWX) column by Rick Reilly that inspired thousands of Americans across the country to donate at least $10 for the purchase of anti-malaria mosquito nets for African children. Thus the Nothing But Nets campaign was born; to date, it's raised $20 million from over $70,000 people, or 2,034,449 nets at the time of this writing. According to a New York Times article about the organization, it's particularly popular with teenage givers.

As giving becomes hip, there's been a rapid increase in the number of websites allowing donors to give directly to people or organizations in need. Sites such as and allow you to read through countless heartfelt requests for everything from art supplies for a kindergarten class to funds to save a home from foreclosure. Sites like allow you to purchase gifts to benefit those in need, such as vaccination against six childhood diseases for one child at a cost of $17.

The idea that your money is going directly to a person in need is appealing, but its grassroots nature makes this kind of philanthropy riskier than most. Before you click the "Donate" button, make sure to confirm the validity of the requesting organization. If you're looking to make a tax deductible donation, make sure the requesting organization has 501(c)(3) status.

Finally, check for administrative fees. Some websites don't charge any fees at all, instead transferring 100% of your donation to the charity; others charge only the PayPal (EBAY) processing fee (approximately 3%). Other websites, however, may keep up to 15% of your donation to cover their costs (and raise their profits) before passing on whatever's left to your chosen charity.

In the world of philanthropy, microgiving is an exciting new fundraising method with seemingly unlimited potential. Expect to see an increasing number of established charities raising substantial capital online through modest donations from large groups of supporters.

I'm keen to see this newly hip spirit of giving reach all levels of society. My hope is that we'll all be in a better place because of it.
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