For millennials, snail mail is definitely out – and they have their doubts about email, too. Businesses have been adjusting, developing digital approaches to get their brand in front of today’s 20- and 30-somethings, such as creating a presence on social media or distributing apps that provide value for users.
The one business that still hasn’t figured out how to reach millennials is the nonprofit business. As a result, according to Jonathan Ben-Dor, CEO of new Israeli start-up PocketCause, US nonprofits lost out on over $6.5 billion in donations from potential givers with whom they could not successfully connect.
“Smartphone users who read email appeals from organizations on their smartphones tend not to respond, since so much email turns out to be spammy or scammy – and until PocketCause there was no other digital platform through which supporters of causes could donate.”
About 200 or so Israeli nonprofits signed up for the company’s beta test last month.
“After just a month, we are processing 1% of all the donations these nonprofits received, and that is without advertising or promotion of any type,” said Ben-Dor.
According to a report prepared by PocketCause, “nonprofits are outstandingly poor at maintaining relations with their current donors. The sector has among the lowest retention rates of any industry in America: only 41% of donors make a repeat donation, compared to 94% in the for-profit sector. Among donors who’ve donated for the first time, 81% will not donate again.”
The reason for this, according to the report, is poor “customer service,” a difficulty in reaching donors who care about the cause but want to be treated as people, not “cash machines. Sixty-three percent of donors report wanting to know how their donation will be used. Even more importantly, 53% of donors report that they didn’t repeat their donation because of a charity’s lack of communication,” said the PocketCause report.
It’s those issues that the app seeks to resolve, said Ben-Dor.
“PocketCause provides a streaming feed of updates from all of the social causes that users have chosen to follow or have Liked on Facebook. Users can receive direct messages from the organizations that they’re donated to or have Favorited, and can send requests directly to the organization, right through the app. The mobile platform also utilizes gamification and rewards, to incentivize users to support and promote the causes they care about.”
It’s the best way to reach out to mobile users, especially young ones, who are willing to communicate solely with their devices. But PocketCause offers nonprofits a web interface as well, said Ben-Dor.
“Users add their payment information in the app – it’s very securely stored, and if a user doesn’t want to donate by credit card, they can use Paypal for an extra layer of security – and when they see a cause they want to support, they just tap on it and type in the amount they want to give. Via the app, that organization will send updates, tweets, photos, videos, and of course future appeals – keeping the donor engaged and coming back to see how their money is being used.”
With Purim – a traditional day of giving – taking place this week, Ben-Dor felt it was the appropriate time to introduce the app in the US and is partnering with several American giving groups, like Give America, to spread the word about the app.
“One reason we are going to be very popular is because we are cheaper to use for processing payments than other platforms,” said Ben-Dor.
Many small non-profits can’t afford to process either checks or credit card payments, and turn to private companies that – for a fee – collect the money and forward it to the organization.
“Most of them charge between 3.5% and 6% per transaction, but we charge only 3%. We handle the payments, security, cloud platform, and everything else a nonprofit needs to raise their giving levels. There is no one else doing this right now – it’s a major opportunity for us, as well as for the nonprofits.”