The digital revolution has affected nearly every activity we engage in. Philanthropy is no exception. Although sophisticated tech solutions have been slower to reach the nonprofit world than some other sectors, their arrival was inevitable. Today, they can help make charitable giving a simpler and more effective component of your financial plan.
Technologies that are Helping to Revolutionize Charitable Giving
Both general technology and apps specifically designed for charities and donors have a place in modern philanthropy. You can use them to:
- Research charitable organizations you may be interested in.
- Make online donations.
- Keep track of your giving activity.
- Streamline the operation of your trust, foundation, or other charitable structure.
- Access information on how your chosen charity is performing.
- Increase your impact by advocating and joining with others through social media.
Technology has made researching nearly anything much easier. If you know the charity you want information about, you can go directly to their website. But you can also access third-party research to get an unbiased picture of a charity that interests you or to find a charity that fits your interests and concerns. Sites you can go to for information on a variety of organizations include:
- GuideStar
- Giving Compass
- The Center for Effective Philanthropy
- Charity Navigator
- National Center for Charitable Statistics
- BBB Wise Giving Alliance
- Great Nonprofits
Other technologies make donation payments simpler and easier. These include digital wallets and online payment platforms like PayPal, Venmo, Apple Pay, Stripe, Bill.com, and Google Pay. To streamline online charitable giving, many charities also accept donation payments directly on their websites.
Business software (accounting, time tracking, project management, communications, etc.) can streamline the daily operation of your trust or foundation, leaving you or your hired advisors more time to spend on strategic investment and distribution decisions. And reporting software, especially with artificial intelligence capabilities, can help the charity you support collate data and produce reports that enable you to understand better where your money is going and how it is being spent.
Social media is also having a significant influence on philanthropy, by fostering community and engagement and enabling donors like you to inspire and motivate others to support your cause.
Technology’s Impact on Transparency and Smarter Decision-Making
The large and ever-increasing amounts of data that modern technology provides—known as big data—can have a major impact on transparency and decision-making for donors and nonprofits.
As more donors turn to online tools to research their choices, big data and artificial intelligence can make matchmaking between donors and philanthropic opportunities more personalized and compelling. This can be especially beneficial if you want to think outside your usual giving patterns or consider additional ESG (environmental, social, and governance) factors when making your donations.
It also has never been easier for an organization to understand the effectiveness of its initiatives or to communicate the details to its stakeholders. Modern AI-powered business and reporting software makes accessing and sharing data with stakeholders simple and convenient. Management and donors can quickly view data and insights about missions, projects, funding, and results, increasing transparency across the board.
Transparency is critical in the nonprofit world: Charities with greater transparency have been shown to attract 53% more contributions.1 People give more when they can see exactly what their money is accomplishing. Plus transparency can help nonprofits operate better. Enabling these organizations to clearly understand the effectiveness of their programs can lead to more informed decisions, greater efficiency, and better results.
Tools for Collaboration and Collective Giving
In addition to boosting transparency and efficiency, digital platforms can support collective giving by bringing together like-minded donors and connecting them with projects that need their support.
Donor-Advised Funds and Technology
A donor-advised fund (DAF) is a popular vehicle for individual charitable giving. But since it can accommodate multiple donors, it also can be a good tool to attract family, friends, or other like-minded contributors to help achieve your charitable goals.
DAFs are designated charitable accounts you can set up and fund with cash, stocks, or other assets. They can provide immediate tax advantages—a tax deduction on the full fair market value of your funding in the year you fund it—with as much time as you want to make distributions. They are relatively inexpensive to set up, and assets can grow tax-free in the account. But the current rise in their popularity may be mainly due to technology, which makes them more accessible and easier for most people to use.
Technology can help DAFs perform many tasks, including:
- Using AI to find appropriate giving opportunities.
- Tracking giving and distributions.
- Communicating with other donors and charities.
- Analyzing outcomes.
- Managing investments.
- Ensuring compliance with applicable rules and regulations.
Collaborative Philanthropic Platforms
Technology and the Internet have also led to the growth of collaborative philanthropic online platforms. These platforms pool or channel resources from multiple donors to nonprofits. Collaborative philanthropy has surged in the past decade as donors have discovered the advantages of sharing knowledge and due diligence while multiplying funding to scale impact.
If you’re interested in collaborative charitable giving sites, there are hundreds to choose from. You can make your selection issue-specific (for example, human services, environment, arts and culture, health, or economic development) or regional.
The Bridgespan Group, partnering with the Gates Foundation, has published a list of more than 300 collaborative platforms, with their value propositions, primary issues, geographical areas, and information on their leadership and grantmaking decision parameters.
How Technology Can Enhance Philanthropic Journeys for Individuals
This is the age of technology. It enriches our daily lives in more ways than we possibly could have imagined just a few decades ago. Today, technology can help you make good choices about your giving activities and streamline the processes, from finding the right nonprofit to managing the investment of your charitable funds and tracking the effectiveness of your philanthropic strategy.
The best use of technology is as a tool to supplement the assistance of a knowledgeable financial advisor who can help you plan your philanthropy efforts as part of an overall financial strategy that includes budgeting, estate planning, and tax optimization.
To be custom-matched with a financial advisor you can trust to support your goals with customized planning, take advantage of our advisor matching program today.
1 FoundationSource.com, “6 Technology Trends that Can Maximize Donor Impact,” https://foundationsource.com/resources/white-papers/6-technology-trends-that-can-maximize-donor-impact/.
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Our philanthropic interests are personal to us and are not reviewed, sponsored or approved by Cetera. All information herein has been prepared solely for informational purposes. This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel.
