Business executives put technical prowess to work by helping charities help themselves
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A group of Cincinnati based social entrepreneurs are tackling the two most significant challenges to the survival of every nonprofit: raising money and gaining donor loyalty. How? By providing the technology and tools necessary to do so in a world engulfed by digital trends.
Possessing all the vim, vigor, and business savvy of business entrepreneurs, social entrepreneurs are a slight variation of the breed; they measure their success in terms of social impact rather than profit and return. A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas business entrepreneurs typically measure performance in profit and return, social entrepreneurs assess their success in terms of the impact they have on society. While social entrepreneurs often work through nonprofits and citizen groups, many also work in the private and governmental sectors.
Every year, nonprofits face the challenge of having to work harder and spend more money to raise the same amount of fundraising support as the year before. However, increasing the frequency of direct mail solicitations or telephone fundraising is not only expensive, but involves risks. Overbearing solicitations can drive donors away, and in turn be cost prohibitive to the nonprofit. Therefore, the nonprofit industry needs new fundraising tools and communication methods to enhance their ability to communicate, raise money, and increase donor loyalty.
A local entrepreneur, Christopher Hytry Derrington, CEO of Alta Financial Technologies, set out to help solve this critical nonprofit issue. He assembled a diverse team of Cincinnati executives to explore all possible options using the latest business and technology tools.
After two years of research and development, Alta created a new fundraising tool specially designed to create donor loyalty. This tool enables donors to earn cash rewards from their donations year after year. The team of entrepreneurs took a well-established trust method called a charitable mutual fund, put it on the internet by using the latest technology, and made it available to the general public.
“No longer is earning cash rewards income and tax breaks from donations exclusively reserved for the high network individuals,” Hytry Derrington said. “Now nonprofits of all sizes and donor demographics can offer their donors cash rewards for their loyalty.”
Until now, charitable mutual fund models have required high maintenance overhead that made them available only to large dollar donors. Smaller, or “average,” donations were not cost effective in this trust due to the high costs of setting up and managing the charitable fund. As a result, the general public, or the largest segment of a typical donor base, was not being given the same compelling loyalty reward opportunities as the wealthy.
echoDonations.org, a web site created by Alta Financial Technologies, accepts donations as low as $25 to any U.S. 501(c)3 charity – currently 1.3 million on file with the IRS. All donations, large and small, that come through echoDonations.org™ are combined in an online charitable mutual fund, which is invested and monitored for performance in the market. As the charitable mutual fund builds investment return, annual Lifetime Cash Rewards™ are distributed to donors and charities while building an endowment for the charity. The benefit to nonprofits is exponential by way of the annual cash received and through the increased donor loyalty gained from receiving their rewards.
“The new technology offered through echoDonations.org is an impressive lead to the future of online giving,” said Drew Fink, Board Member of nonprofitSherpa.org, an organization dedicated to helping nonprofits through technology and innovation.
“This innovative idea is has enormous potential not only in the realm of nonprofit organizations, but of any educational organization in search of loyal donors for steady financial support.”