Across the country, they are called Giving Days — 24-hour fundraising frenzies.
Donors who contribute to nonprofit groups, naturally, want as much of their money as possible to go to the charities, as opposed to administrative costs.
A Nebraska company now has devised an approach it says will direct more of the donations to nonprofits.
“We believe this will go national,” said Jason Wilkinson of the marketing and software firm Firespring, “and that it will change the face of Giving Days.”
Firespring says its free “Givesource” software will eliminate the need for sponsoring community foundations to pay third-party software companies in “platform fees.”
Based in Lincoln, Firespring developed its free software in cooperation with the Lincoln Community Foundation and the Raikes School of Computer Science and Management at the University of Nebraska-Lincoln.
“When we looked at the spirit behind Giving Days,” Wilkinson said, “we just felt we could do something — and write software to allow more of the money to go directly to nonprofits.”
On well-publicized midnight-to-midnight Giving Days, thousands of people across the country typically donate online by credit card. As with normal credit-card usage at the gas pump or the checkout line, that costs 2 to 3 percent.
But on top of that, there is often another fee paid to outside companies that administer the software. Firespring says that’s where its free Givesource software can save money to benefit nonprofits.
For the past two years, as a kind of test market, the Lincoln Community Foundation has used the free software on its Give to Lincoln days — which Firespring estimates has saved $156,000 in fees.
Firespring says it is now making the software available nationally.
Michelle Paulk, program coordinator for the Lincoln foundation, said the 2018 Give to Lincoln Day , on May 31, raised $4.6 million, up about $920,000 from its previous record in 2017.
“We were blown away,” Paulk said. “And the nonprofits have really embraced the Givesource platform, which works well and is intuitive and user-friendly.”
The Omaha Community Foundation, which started its Omaha Gives Day in 2013 and raised $7.4 million this year on May 23, previously addressed a problematic software platform fee.
CEO Sara Boyd said the foundation had paid a software company about 3 percent of the money raised. As donations increased, that meant the company’s cut also increased — which Boyd said was unmerited.
After two years, she canceled the contract, calling it “highway robbery.”
The Omaha foundation switched to a flat fee (plus the cost of any upgrades) and a different company, Denver-based CiviCore.
Though open to considering other options, she said, the Omaha foundation is happy with its current setup — a flat fee rather than a percentage, and a familiar company providing reliable service.
When people donate to Omaha Gives, there is a 2.2 percent credit card fee, plus 0.79 percent that pays for administration, a total of 2.99 percent. So 97.01 percent of donations, she said, goes to charities.
This year on Omaha Gives Day, the foundation received more than 50,000 donations from 18,548 donors benefiting nearly 1,000 nonprofits.
The $7.4 million raised was down about 5 percent from the previous year’s $7.8 million and about 20 percent down from the 2016 peak of $8.9 million.
Boyd said that year was unusual because it benefited from two major donors.
Plans are proceeding for a seventh Omaha Gives Day in 2019, but it’s not certain it will continue beyond that.
Some cities, she said, have decided that Giving Days are nearing the end of a life cycle, having served their purpose — encouraging people to become philanthropists, no matter the size of their donations.
In any case, Boyd said, Omaha Gives no longer is limited to one day — people can donate any time. Some do so around Giving Tuesday, just after Thanksgiving, an event started by the United Nations Foundation in 2012.
Efficiency in handling donations is a goal of all reputable charities, and Firespring’s new Givesource offers another way to achieve that. The company says some community foundations around the country are paying 5 percent to 7 percent in fees.
John Jones, a vice president of the Washington-based Case Foundation and a close watcher of philanthropy, said he is impressed with Givesource.
It is “open-sourced,” he noted, meaning it is free and anyone can use it and improve on it.
“This is the first really well- done, open-sourced fundraising tool we have seen,” Jones said. “I think it’s a very big deal. Firespring has committed a strong act of philanthropy.”