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Flash funding: the growing trend of large gifts that fund tons of crowdfunding campaigns at once

Do these big gifts signal a more equitable future for crowdfunding, since they take emotional connection out of the decision-making process?

Flash funding: the growing trend of large gifts that fund tons of crowdfunding campaigns at once
[Source images: Benjamin Child/Unsplash; Michael Longmire/Unsplash; HstrongART/iStock]

The first time it happened, DonorsChoose.org founder Charles Best was shocked. It was 2010, and a woman called his company saying that she was having a little bit of trouble making a donation to the site, a crowdfunding platform that helps teachers across the country fund classroom necessities and educational projects. Best called her back himself, “and I figured I would just be helping her troubleshoot a $10 donation,” he says,” but then a curious thing happened: She asked how many classroom projects there were from the state of California, and how much it would cost to fund them all.

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Best did the math, and the nearly 2,000 projects totaled $1.2 million. The woman said, “Okay,” and hung up the phone, and Best thought that was the end of that. “But a few days later we got a $1.2 million check in the mail to fund every single classroom project in California as one surprise,” he says. “And it really was magical.”

Each time it happens, Best says they’re still surprised.

This spurt of generosity was not a one-off, though each time it happens, Best says they’re still surprised. It’s grown into a trend that DonorsChoose staffers have dubbed “flash funding”: when a single donors funds all the projects—either in a geographic area or in a specific subject matter, like STEM.

But no matter how many teacher projects get wiped out by donors, there will be more projects created by more teachers to take their place. No matter how many people with medical bills or destroyed homes get an influx of cash from strangers on the internet through GoFundMe or Indiegogo, there’s already another tragic story to hold our attention and generosity. But with flash funding, at least, the pressure is off to stick out in the crowd. That means getting a project funded does come down to a little bit of luck for those in the right crowdfunding category at the right time, but it also means a potentially more equitable way of giving—one that only works on a platform like DonorsChoose, which rigorously vets all of its campaigns.

The rise of the flash fund

Since that first $1.2 million donation, Stephen Colbert flash-funded all the projects in his home state of South Carolina, which inspired a wave of philanthropy in which people wanted to step up for their own hometowns and states, from Craigslist founder Craig Newmark to Serena Williams to Elon Musk. PNC Foundation has flash-funded all the pre-K projects in several communities. Companies like Walmart, Google, Staples, and BJ’s Wholesale Club have flash-funded projects in the same areas where they open new offices or stores. In 2018, cryptocurrency startup Ripple funded all the projects on the DonorsChoose site in one fell swoop with a $29 million donation. “That was the apex of flash funding,” says Best.

In that year, the site saw $150 million in total giving, so close to 20% of all the funding came via flash funding. It may have been the peak of the trend (so far), but it wasn’t the end: Just last month, the Chan Zukerberg Initiative flash-funded all of the teacher professional development projects on the site. Sonic Drive-In, which has run a “Limeades for Learning” promotion with DonorsChoose for more than a decade that lets the public vote on classroom projects and then donates to the winners, flash-funded in five of its markets this fall.

Remove the 2018 Ripple windfall, and flash funding makes up about 10% of all DonorsChoose giving annually, says Best. But it still has a big effect, and not just on the teachers who get surprised with a fully funded project. After all of the California teacher projects were funded, it only took a couple of weeks until there was more than $1.2 million worth of new projects created by teachers there. “When flash funding on our site was a rarity, when it had only happened a couple times and it was a foreign concept to teachers, we would actually see that there would be such a pop from these flash fundings that so many teachers would try out our site and create new projects right after,” says Best.

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That dynamic has decreased a bit, and Best notes that since flash funding tends to be a surprise, it’s a bit like lightning: You won’t see it strike the same place twice. “The one predictable thing is that a flash funding will not repeat itself anytime soon with the same criteria,” he says, so that helps to not distort the ecosystem of the site.

The importance of vetting

An early criticism of crowdfunding had to do with the sob story element, or, more broadly, the concern that only viral stories would get funding. “The crowdfunding site truly allows you to tell a story, where a lot of nonprofits don’t have that opportunity,” because with a crowdfunding campaign, an individual and their needs is front and center, says Roy Morejon, president of the crowdfunding consulting and marketing agency Enventys Partners. It’s a more public one-on-one than the “private ‘I wrote a check, I did a good deed.'” That creates a more personal connection for these donations, but it also means certain stories get funded more than others thanks to a boost from a local news segment or a link in a viral tweet. And for every individual sincerely helped by this sort of crowdfunding campaign, there are campaigns that are a bit less altruistic, like the infamous potato salad Kickstarter (which began as a joke, though the money was donated to charity once the campaign went viral), or the GoFundMe for a homeless man that turned out to be a scam.

The one predictable thing is that flash funding will not repeat itself anytime soon with the same criteria.”

Charles Best

Not all crowdfunding programs are necessarily philanthropically focused. They’re all about giving, yes, but many don’t have a clear focus or strict vetting, compared to DonorsChoose. From the lens of corporate giving, it’s much riskier to fund swaths of campaigns on GoFundMe or Indiegogo in one feel swoop, where there are often conflicting campaigns—like ones that appeared for both Christine Blasey Ford and Brett Kavanaugh during their hearings, or more broadly, how there are campaigns to support both the border wall and immigrant rights groups—or also less-verified campaigns that are tinged with individual gain. If an organization were to fund every project on these site in, say, one city, could they be sure their money was well spent?

On DonorsChoose, says Best, it’s impossible for teachers to flood the site with vague “I need stuff” requests. “If a teacher said, ‘I need stuff, please help me out,’ that request would never see the light of day. We would send it back to the teacher with follow-up questions, asking them to explain the student learning experience, the specific skills they will acquire, the learning that will result from this particular need. So that’s actually one guarantee that flash funding will not result in a lot of teachers with a lot of flimsy ideas on our site, because there’s a really rigorous vetting process.”

Can flash funding grow?

The amount of projects on DonorsChoose and the site’s success rate are important factors that show this vetting works. Currently there are 90,000 project requests, and the chances of a teacher getting one of their projects funded is 77%, which has remained steady even with the increased trend of flash funding. Kickstarter has about 4,160 projects live at the time of publication with an overall success rate of 46%. “So there’s like 22 times more projects on DonorsChoose,” notes Best, “and I think flash funding has had something to do with that.” Teachers see that organizations are giving broadly on DonorsChoose, and that they can be a part of that, without the personal social network or viral story needed to solicit donations.

GoFundMe doesn’t seem to share its stats, but a 2017 study on medical crowdfunding found that more than 90% of GoFundMe campaigns never meet their goal (and that this crowdfunding “has the potential to deepen social and health inequities in the U.S.”). These other platforms are trying to become more closely connected to philanthropy, though; in October, GoFundMe officially launched GoFundMe Charity as a way for already-established nonprofits to use the site to accept donations easily online. Kickstarter Patrons, though still focused on creative projects, allows nonprofits like the Knight Foundation and AmDoc, or for-profit institutions to commit to funding projects that align with their vision.

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Still, it seems flash funding, in the sense of taking care of every single crowdfunding campaign in a geographic area or topic category, has only really been done on DonorsChoose. And it has to be done with the utmost secrecy. “If word ever gets out about a flash funding, all of a sudden teachers will flock the site and budget estimates will suddenly have to be thrown in the trash,” says Best. This could actually make flash funding impossible, because corporate partners usually come in with a budget, and if the cost of funding all projects in an area suddenly skyrockets because word leaked about the upcoming generosity, “that would usually mean that flash funding just won’t happen, because a company can’t sign up for uncapped liability.”

Flash funding is just one way for big organizations to use crowdfunding for their philanthropy efforts. There’s the Patron and Charity programs on other platforms, and there’s also, through DonorsChoose and other sites, match offers that allow corporate partners to work with the public to give to projects, and gift cards companies can give their employees so they can choose to support the specific projects that speak to them. “But when a corporate partner says, you know, what’s most important is to make a big splash and capture people’s attention in one moment, that’s when flash funding makes the most sense.” And Best hopes the flash-funding trend continues, because there’s nothing like the surprise and delight of telling a bunch of teachers at once that they’ve been taken care of.

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