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A Study in Nonprofit Excellence: Donors Choose

Matthew Monberg of Beyond Giving is hosting next week's Carnival of Nonprofit Consultants and asks for posts on nonprofit excellence, due tonight. Serendipitously, this article from Slate on Donors Choose slid into my inbox this morning.

Donors_choose The basic premise of Donors Choose is for public school teachers to use the Donors Choose site to post requests for supplies and materials to help their students learn. Individuals can then select a particular project to fund:

"Donors scroll through the hundreds of proposals (searchable by region, subject, level of school poverty, etc.) and fund them in whole or in part with a couple of clicks. If there's no market for the proposal, it doesn't get funded, though most eventually do. DonorsChoose handles all of the discounted purchasing from vendors, so no money goes directly to the teacher."

As of this writing, Donors Choose has raised more than $11 million to help over 500,000 students across the country.

So what makes Donors Choose excellent?

Transparency--All transactions are transparent. You know exactly what you're buying when you send in your donation. You can request a copy of the bill if you want it. You even receive handwritten thank yous from the teacher and his/her students a few weeks after you make your donation. In a world where consumers are coming to expect that not only is there nothing behind the curtain, but that there isn't even a curtain to hide behind, this is a refreshing change from the experience that many donors currently have with the charities to which they donate.

Value-Add Collaborations--We've talked this one to death in the nonprofit community. Clearly the trend is toward collaboration and the need to form partnerships. But too often the partnerships we see in the nonprofit world are not particularly cooperative and often don't really add value to the process for customers. But Donors Choose is working on forming collaborations specifically to add value to their process.

For example, The Blogger Challenge is a partnership between Donors Choose and individual bloggers who can pick the project that appeals to them and then run a fundraiser through their blog. This leverages the relationships that bloggers have developed with their audiences, creating value for Donors Choose (increased donations), the blogger (a "pet project" supported) and the blogger's audience (being able to support a particular project and to feel a sense of community in working with others to meet that need).

And clearly the entire concept of Donors Choose is about a collaborative partnership between the site and the thousands of teachers who are submitting proposals.

An Innovative Funding Model
Jonathan Alter, who wrote the Slate article, is also on the Donors Choose board. He talks about what happened early on in their planning process:

"Early on, some well-meaning but clueless Harvard Business School graduates instructed us that DonorsChoose had to automatically take 15 percent off the top of every gift for overhead. Otherwise, the HBS team warned, our organization would never sustain itself. In fact, these gents withdrew a large gift because they thought our business plan didn't work without the automatic deduction. We said we wanted to offer DonorsChoose donors the option of whether to give us additional money for overhead at checkout. If the donor wants, 100 percent of his or her donation can go directly into the classroom, but he or she is also invited to contribute to covering the organization's expenses. The HBS experts said we would be lucky if 10 percent of our donors voluntarily ponied up extra. But they were living in a pre-Web world in which people weren't used to being asked what specific uses their money could be put to. How many of the thousands of DonorsChoose donors give us 15 percent extra to fund ongoing operations? Try 93 percent."  (my emphasis)

What the Harvard guys were suggesting was the old way of doing business. Donors Choose saw that they needed to adapt their model to changed online behavior. And got fabulous results.

A Focus on The Customer
Alter calls the Donors Choose approach "market philanthropy," where the donors are consumers able to direct their dollars to "buy" those goods and services they believe are worthy of support. That in itself is a more customer-focused approach--it's allowing buyers and sellers to connect to one another in the ways that will bring value to each, rather than Donors Choose assuming which projects  are most "worthy" and where they will send their financial support.

But this customer focus is carried through in the Donors Choose processes as well where submitting a proposal and making a donation are processes that have been developed with ease of use for customers in mind.

 What is probably most valuable to me about a nonprofit like Donors Choose, though,  is that it represents fresh ideas and new ways of looking at how we do things in the nonprofit world. It's a "kick in the pants" that forces us to evaluate if maybe there isn't value in a model like this for serving other customers in other ways. I like that.  Any time we get some new blood flowing through our veins, that's a good thing. 


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