So it has been just about 6 months since the launch of GiveLoop, and we are starting to reflect upon three questions: What worked? What failed? What next?
We set out to help organizations raise more money by making the donation process more transparent and engaging, and did just that. We built a product that made the donation process more transparent and engaging, and have received great feedback from our initial clients. The bottom line: we feel we have proven that people want the donation process to be more transparent and engaging, and that is where online donations are heading.
Although, we believed the idea has been proven, the execution has missed its mark. So what didn’t work?
- Too many features. In my opinion, we totally over-built our tool. Our primary call-to-action (“vote with your money”) was lost in a sea of features (e.g. make a suggestion, donation feed, integration, sharing, shopping cart). Most of these “enhancements” took away from the main focus of the donation page, making it cluttered and sometimes confusing for what to do next.
- Lack of brand focus. What is GiveLoop? What does GiveLoop do? It can be answered in many ways and still would likely be accurate. We make donations more transparent, we make donations more engaging, we make donations more social, we increase your online donations, we increase your donor loyalty, we’re an online tool, we’re a widget, and so on. Bottom line: we have an identity crisis.
- Little to no tools for donor acquisition. We set out to enhance the online donations of organizations already collecting donations online. The reality is that most small-to-mid-sized organizations don’t have a large online presence, so simply putting our tool on their site wouldn’t attract new donations.
- Different solutions for different problems. We purposely created a donation tool that was generic enough so that any organization (non-profit, politician, software developer) can use our tool for their donation needs. The reality is that different organizations have different problems and needs, and thus require different donation tools.
In short, we are doing a major revamp of our brand and products. In summary, we will be doing the following:
- Different solutions for different problems. We will be creating a suite of different tools that can be used individually or concurrently. Each tool will be laser-focused on a specific concept/principle. For example, our first tool will be focused on the idea of “voting with your donations”. With this tool, an organization will display only two things that they are planning on doing next (ideally they will be two polarizing things), and their donors can compete and “vote” with their donations on what they want to win. We hope this is something that can be very fun, engaging, and easily sharable because of the competition element. Another tool might be laser-focusd on transparency, another might focus on feedback, etc.
- Simple, simple, simple. All our tools will have a minimum feature set with dead-simple and clean interfaces. Only essential information will be shown, and the main call-to-action will be unavoidable.
- Focus on shareable/viral. One question we will ask when building any tool: is this concept shareable? Since many of our clients do not have a big online presence or a dedicated online team, we want to make tools that will help them spread their message in a very organic, grassroots manner with minimal effort.
- Consistent branding. Although we will be creating numerous tools, our identity will remain consistent throughout. Even if our logo doesn’t appear on the tool, you will know it’s a GiveLoop tool given familiar design, functional elements, and ideology (think: Google apps).
We will be launching a beta of our re-vamped tool within a month, so keep a look out! We will also be testing the tools out with a small number of organizations through our pilot program. If you know of any organization who would benefit from a dedicated online fundraising team for the holidays, please have them submit their application ASAP!
Buying a product and making a donation are two very different things. When I am buying a product, I am told how much it costs and I can shop around for the best price. When I am making a donation, it is usually for an arbitrary amount, perhaps guided by a recommended donation amount or a very large fundraising goal. Additionally, when I’m buying a product, I can read customer reviews to look for the right product, as well as write customer reviews if I have a particularly good or bad experience. I am not sure how I can give feedback on a donation in this way.
To sum up the main difference between buying a product and making a donation:
- Products have well-defined costs, Donations do not
- Products have easily accessible feedback channels, Donations do not
- Products are an end, Donations are a means to an end
My question is, why can’t donations be treated more like purchases of products? But before I answer that question, I should answer the prerequisite question: “Why should we treat donations more like purchases of products?”
Simply put, at least in the U.S., people love to consume. The U.S. Retail Market was over 4 trillion dollars in 2009. Compare this to $303 billion in donations the same year. Admittedly, that’s a slightly arbitrary comparison, but my main proposition is that, since people in the United States are manic consumers of products, if we treat donations similarly, we would be able to increase donations significantly. We can do this in the following ways:
- Tie donations to specific needs with well-defined costs
- Create easily accessible feedback channels throughout the donation process
- Make donations more like a “purchase” of something with tangible value, e.g. show them the result of their donations
Tying donations to specific needs with well-defined costs gives the donor a better understanding of how much they should give to make a significant impact. This will likely increase donation size since donors know what they are “purchasing”, e.g. $200 for a laptop or $1000 for a sponsorship. Creating easily accessible feedback channels allows organizations and donors to build meaningful relationships and increase repeat donations. Finally by showing donors the result of their donations, you are essentially completing the “purchase” and feedback loop, which would also increase the likelihood of the donors giving again.
Agree or disagree? Let me know!
Here at GiveLoop, we’ve been struggling with the question of accountablity. Since we allow donors to direct where they would like their money to go, we want to ensure that the organizations receiving the donations are held accountable to how they claim they will be using the donations.
DonorsChoose.org, an online charity that helps schools raise money for specific projects, handles accountability pretty well. DonorsChoose actually purchases the classroom materials, shipping items directly to the school and alerting the principal when the materials are on their way. In this sense, the donor really needs to only trust DonorsChoose and not the specific teachers to spend their money properly.
That said, there’s one big drawback: it’s expensive, and thus difficult to scale. As of this writing, there is a 13%-19% donation to DonorsChooose by default for each donation to a project. In 2009, only 59.6% of their money collected went to classroom projects materials, 31.7% went to “classroom projects processing” and “classroom projects advocacy”, and the final 8.7% went to DonorsChoose’s own administrative and fundraising costs. Although we have yet to hear back from DonorsChoose about the specifics of the terms “classroom projects processing” and “classroom projects advocacy”, it seems like well over 30% of donations are going to cover the costs of making the purchases happen rather than the purchases themselves. In other words if I donate $100 to a classroom, about $60 of those dollars will be used on actual classroom project materials. I understand that may be the cost of good service and accountability, but that still seems much higher than it should be.
I am also pretty sure this is why DonorsChoose is sticking to being a platform for public schools and not expanding to big fundraisers like NGOs, religion, or politics- the process can’t scale.
So is there another way that accountability can actually scale? The main problem is that, if Organization ABC said they used $100 on product XYZ, we need to prove:
- Organization ABC purchased product XYZ
- product XYZ costs $100
- product XYZ is being used as intended
The concept-du-jour “crowd-sourcing” is something that immediately comes to mind. This might mean to allow users to submit photos and video that visually proves if something was purchased and used as intended. This might be a good first step, especially if you can apply game mechanics on top of this to incentivize user-submitted proof.
However, user-submitted images can easily be doctored and gamed. Perhaps adding another layer of proof-scoring can improve the quality of user submissions. For example, I can approve or disapprove someone else’s proof, which would increase or decrease that proof’s score or authority (and perhaps that user’s reputation). We can also tie this system of proof to an organization’s overall accountability score, which may motivate the organization to be more transparent. In other words, tying actions to actual individual’s and organization’s reputation, could increase overall reliability of this system.
The problem is that crowd-sourcing natually draws skepticism since it is slightly counter-intuitive. I think individuals like to trust official entities like DonorsChoose rather than “the crowd”. Perhaps some gray-area might work, like a GiveLoop-moderated-crowd-sourced platform, where GiveLoop moderaters manually gives accountability scores to organizations in addition to or in combination with crowd-generated accountability scores.
This problem is definitely something we will be continually tackling as we move forward. Have any other ideas for how to scale accountability? Let us know!
Right now we are a very early start-up with very modest revenue, but even now, how can we “practice what we preach” and be more transparent?
What is Transparency?
To be honest, I’m not exactly sure what “being transparent” actually means and by no means am I an expert in this field. I think a lot of my ideas on this subject stems from the open-source/open-content movements prevalent in the software development and blogging communities. Personally, I believe transparency, as it relates to business (or more specifically, our business), boils down to a few things:
- Honesty: Simply put, we’re not out to pursue our business goals at the expense of misleading our partners, clients, customers, or users. This at times is easier said than done, especially when next month’s rent is on the line. Let’s say there’s a huge potential client that will only do business with us if we had proven success with previous large clients. As a start-up, we may not have that data. Sure, we can inflate our numbers or exaggerate the truth a little bit, but I’d argue that’s really not necessary and will probably be detrimental to us in the long run. In my experience, being frank and open like saying, “To be honest, you are one of our first clients, but it only means you’ll get 99.9% of our attention and get to greatly shape our product to fit your needs” can really go a long way. And even if they turn you down, they’ll likely appreciate and remember your openness and will likely listen to you when you’re in a better position to serve their needs.
- Accessibility: We try to make relevant information as available as possible, and try to convert that information into knowledge. This may simply mean making yourselves available directly to your customers if they have any questions or concerns. This also means just making relevant information very visible, for example at GiveLoop we may want to share exactly what our business model is (i.e. no hidden costs/fees) or show how we use the money generated from our business.
- Engagement (discussion/feedback/collaboration): This would generally mean our customers are heavily involved in our product and business development process from beginning to end. Instead of just being “accountable” by telling you what we did, we would tell you what we are planning to do and receive feedback from our customers throughout the development process.
- Build our brand, make more money: Personally, I’d like to do business with those who are honest and open. Even though they may not have the best product (however, see #2) or the best prices, I at least can trust that they won’t pull the rug out from under me and will do what they say they will do. Transparency also puts a face or person to a brand, allowing you to build stronger, long-term relationships with customers. Loyal customers generally lead to loyal promoters, which leads to more customers, and more money.
- Better product: By including the customers in the product and business development process, naturally we should approach something that our customers would enjoy using. This may not go to the extreme of crowd-sourcing or open-sourcing our product, but at least allowing our customers to voice their opinions and allowing us to listen to your customers is a good first step.
- Karma (transparency can be contagious): I would love to see the companies and brands of products I use be more transparent, as well as individuals, politicians, schools, and charities that I support. If we can show that it works, maybe it might spread.
So What Are We Doing Now To Be More Transparent?
- Ask the question for every feature, every decision: Although many of our decisions aren’t that massively impactful just yet, I think it’s good practice for us to simply ask the question, “does this follow our mission of transparency” or “can this be more transparent?” Or if we are not sure if we should do feature A or B, as a tie-breaker we just ask, “which one follows our mission of transparency?” Our final product and business is really just a cumulation of very small single decisions and features, so if we want to be a transparent company, we must integrate it into our decision-making process.
- Make ourselves fanatically available: We currently allow our users to call us directly on our cell-phones. We also setup formspring accounts (mine, Todd’s) to allow our users and fans to ask us anything about our company. Although this may not be that scalable, we’ll continually search for viable solutions for allowing our customers to talk directly to our team.
- Solicit feedback: We’ve created a GiveLoop page listing out some things we’re planning on implementing in the future and their respective costs in a hope to create discussion around what we should pursue in the future while being transparent about how much it would cost us.
- Honest about our business model (no hidden fees): We’ve tried to lay out our fee structure as clearly as possible, and give the power to the donor on how much of the fee they would like to cover. Additionally, we are trying to educate our users on why there are fees and how they can reduce them.
We obviously have a long way to go and will continually explore new ways to tackle this idea of transparency. We’d love to hear from our readers more ideas of how small (and large) businesses can be more transparent, and hopefully we’ll have more to share the next time we write about this subject.
Yes, admittedly this is another company blog. But before you stop reading, let me throw out some bullet points to help you decide if this blog is for you.
The goals of this blog are:
- To be a place for us (GiveLoop members, our readers, and colleagues) to share our thoughts and explorations in the concepts of “transparency”, “openness”, and “accountability” as it exists on the Internet.
- To be a place for discussion and debate of the above-mentioned issues.
- To be a place for us (GiveLoop members, our readers, and colleagues) and others to practice (what we believe to be) transparency and openness on the Internet.
As a quick introduction and background, my name is Brian Foo, and I am launching a company called GiveLoop with a good friend, roommate, and colleague, Todd Spitz. Todd and I met each other while attending Columbia University’s engineering school (SEAS), where we graduated in 2008 with a mechanical engineering and computer science degree respectively. We’ve both acquired a taste for entrepreneurship early on in our lives, and more seriously towards the end of our college careers.
Personally, I’ve been interested in the intersection of transparency and the Internet in recent years- particularly corporate transparency. I launched a website called Project Label in 2007, which strives to produce “people-powered company nutrition labels.” Although Project Label still exists, I’ve run into some very clear barriers and frustrations with corporate transparency on the Web, which is a very young field with very little standards and is particularly prone to things like “greenwashing” and carefully-crafted PR.
GiveLoop was born as a slightly different approach to addressing the transparency problem on the Web. Todd and I expressed interest in the concept of “tracking dollars” to see and understand exactly how money is transacted and moved through different entities. When faced with this daunting task, we decided to focus the problem a bit to online fundraising, a space that we believe would particularly benefit from being more transparent.
By no means do Todd and I consider “experts” in the space of online fundraising or transparency on the Web and acknowledge the great amount of research and discussions already happening. We want this to be a place of discovery, debate, and development of issues having to do with transparency, openness, and accountability on the Internet. We hope you enjoy reading and participating in the discussion!