Charities Turn to Crowdfunding This Holiday Season

Olivia: Olivia, center, was transferred from Staten Island to Steven and Alexandra Cohen Children’s Medical Center (CCMC) in Hyde Park New York after suffering a stroke when she was only one and a half years old. Following a 10 day hospital stay, she underwent months of physical and occupational therapy. CCMC is using crowdfunding catalog to raise money for the toys Olivia used during her therapy. (Lee Weissman & Adam Cooper, RBP North Shore-LIJ Studios)

NEW YORK—The holidays are a time of giving, and many charities harness that holiday spirit to fill up their coffers with donations. In past years telethons, direct mailers, and local events were the best way to entice someone to give, but this year many charities are turning to the hottest new fundraising trend: crowdfunding.

“Putting a check in an envelope feels pretty sterile,” said Dave Boyce, CEO of Fundly, a crowd-funding platform site.

“Crowdfunding brings some fun and transparency back in the process where it is fun to give again,” said Boyce.

Crowdfunding uses an interactive online platform to raise money. The sites allow donors to see who else has given, how much they gave, how close the project is to its goal, and allows them to recruit their friends through social media to donate to the cause.

“It makes me feel like I am involved,” Boyce said. “Even if I give only $50 or $100, I get all of the information and sense of belonging that a $10,000 donor would feel in a traditional campaign.”

Using a crowdfunding platform not only benefits the donors, but also the charities. Traditional campaigns can be quite costly with both manpower and supplies sometimes ranging into the hundreds of thousands of dollars. But anyone can start a crowdfunding site, which runs from free to a few thousand dollars with an additional predetermined percentage for transaction and credit card fees.

First of Its Kind

The new fundraising method is hitting all sectors, including the health care industry. Children’s Miracle Network Hospitals (CMNH), which competes with big name organizations such as St. Jude’s for charitable donations, was looking for a new and innovative way to set itself apart and drive donations its way.

According to Boyce, CMNH has launched the first crowdfunded hospital gift catalog—the “Neiman Marcus catalog for good”—with gifts ranging from $30 to $12 million.

Much of the catalog aims to meet the needs of its patients; needs that are not covered by insurance, including books, art supplies, comfort toys, and other diversion therapy. “Typical hospital bills don’t pay for family services needs,” said Kevin Carraccio, vice president of development at Steven and Alexandra Cohen Children’s Medical Center of New York, which is a member of CMNH and will receive donations from the gift catalog this year.

Carraccio said when children come to the hospital with serious illnesses, often their siblings and parents need ways to cope with the life-changing situation. Those costs come out of pocket to the hospital, which is the largest provider for children in the state of New York.

Day to day supplies—monitors, incubators, blood pressure cuffs, pediatric wheelchairs, lab supplies—are in the catalog to make sure the hospital is prepared for whatever walks through the doors. “We can’t wait until a kid shows up at the door to buy equipment,” Carraccio said. “We need to do it before hand, be ready, and trained.”

There are eight big-ticket items that include the naming rights to new hospital wings, such as the epilepsy center in Chicago, or purchasing expensive equipment, such as a linear accelerator for radiation oncology treatment in Los Angeles.

The big-ticket items, much like those in the Neiman Marcus catalog, are a statement piece. “The fact that there is a $12 million need out there gets people to start thinking,” Boyce said. “When you stare at it all, it starts to become real for you, even if you haven’t lived through it. The range emphasizes what it takes to take care of these kids and help them survive.”

Boyce said with the big-ticket items in play, the average donation actually increases.

Phase One

During its introductory year, the new platform has some limitations. Outside of the eight super gifts, donations cannot be made to specific hospitals, but will be doled out to the nearest zip code of the donor. Donors can, however, create a fundraising page for a specific hospital on the site and spread the word via social media.

The Give Miracles catalog launched on Nov. 8 and will run through the holiday season. “The response has been great in terms of the interest,” Carraccio said. “Donations, hopefully, will follow.”

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