DonorSee Faces A Hard Decision

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My life took an ironic turn two years ago when I founded DonorSee.

From Daily Village Trips To Desk Job

Prior to our launch in September of 2016, I had spent the previous 3 years living in Africa. I spent a lot of time in two places that I rarely see now: airplanes and rural Malawian villages.

I used to wake up, head to a coffee shop to get some work done and then in the afternoon I would head out to various villages to oversee projects I had started. Sometimes this included the school I crowdfunded and other times it meant smaller scale endeavors.

For example, arguably the first-ever “DonorSee project” was posted on my blog in September of 2013. I fundraised for a bike my first month in Malawi.

It was a fun time. It had its challenges, but it was fun.

Now that DonorSee has launched, my days look different. I spend less time traveling and more time looking at spreadsheets, sitting at a desk.

“Sitting at a desk” is why I left America several years ago to move to Malawi. “I could never do a desk job” I used to tell myself. Turns out I was wrong. I can do a desk job! I just need to know that the work I’m doing truly matters.

How To Maximize DonorSee’s Impact

It’s not hard to see that DonorSee is making an impact. Showing the difference that a few dollars can make is what we do. There are endless examples, but here are some of my favorites…

As the DonorSee community continues to make an impact in the lives of people all over the world, I consider it my responsibility to maximize that impact. In other words, what if we could continue changing lives, but do it at a scale that’s 1,000x what it is today?

As far as you or I are concerned, our lives wouldn’t be remarkably different if DonorSee grew by that much. You would still be reading my blogs and giving on DonorSee, and I would still be looking at spreadsheets at my desk.

But the lives of millions of people around our planet would be remarkably better. We’re talking lives saved, homes built, businesses started and much, much more.

That’s why this is an important consideration. Growing DonorSee won’t change much for you or me, but it will change a lot for people all over the globe.

But here is the reality: growing 1,000x doesn’t happen by chance or luck. It takes a lot of work, perseverance and (especially) hard decisions.

A Hard Decision I’m Considering

As our community strives together to make the world a better place, we will be faced with many hard decisions. The road ahead of us is not paved with ease. It’s paved with challenges (just look at the road behind us).

One of the challenging decisions that I am bringing onto the table (for our collective consideration) is the overhead that DonorSee takes.

One of the first questions I get asked when people first learn about DonorSee is “what fee do you take?” And I find it comfortable and easy to answer proudly with, “we take an average of 3.75% per donation.”

Such a low percentage was originally picked because we started off as a type of crowdfunding platform. We used to compare ourselves to GoFundMe or Kickstarter, who both take about 5%.

But in the last two years, we have evolved.

We have gone from “letting anybody post” to being highly selective in who we partner with. We now reject 90% of people who apply to post projects for us. We are singularly focused on bringing high quality projects to our donors so they can know that their money is making a huge impact.

We are not a crowdfunding platform. A crowdfunding platform is merely software. It’s a lot of written code that helps people do one easy thing well.

In structure, we more closely resemble a charity.

Certain charities that I highly admire, such as HOPE International and Mercy Ships, have overhead expenses of about 20%.

Even charities that claim to have 0% overhead, such as Charity: Water or Kiva, still have real-life overheads of 18% and 22% respectively. And I don’t think that’s inherently wrong of them. They both do a lot of impressive work.

Two Things To Look At

Before we continue the discussion on fees, there are two things that I think are important to look at.

The first is this TED Talk from activist and fundraiser, Dan Pallotta. He points out the double standard that rewards charities for how little they spend instead of how much they get done.

The second thing is this article about pricing from Silicon Valley investor, Marc Andreessen. He points out that startups are often paralyzed by low prices which causes them to be “too hungry to eat.” Their growth is stunted because they underprice themselves and are consequently unable to spend money on marketing. So no one finds out about their awesome product because they are too bashful to charge a fair price.

So Where Does That Leave Us?

As I have been pondering the “hard decision” of changing the DonorSee fee, I have been considering a few things:

The first consideration is that this decision shouldn’t belong to just me. We have a lot of generous donors who would be impacted by this decision. And we also have a lot of on-the-ground partners as well as people in need around the world who will be impacted.

The second consideration is that we don’t know what the future holds. Our low fee has worked for us so far, but there are some regulations heading for the tech industry (such as the GDPR) which could cripple us if we’re not prepared for them. It’s also possible that a lower fee is on our horizon should the appropriate situation present itself.

The third consideration is the hardest to digest. I’m scared to raise the fee. Having a low fee has allowed us to signal to potential new donors that we are not doing this for the money, but that we really want your money to go to people in need. However, it has also prevented us from spending an adequate budget letting people know who we are and what we do. A change of any kind to the fee is a risk. However, looking at our numbers, it’s a risk that could pay off big if we were able to devote a higher proportion of our budget to outreach efforts.

The fourth consideration is understanding how people (often including myself) make decisions. It’s a very small, but vocal, minority that are crying out for low overhead. Most people give with compassion, making decisions with their heart. Very few people hyper-analyze the numbers. And of the one’s who do, even they usually understand that it’s impossible to run an organization with critically low overhead.

The fifth consideration is timing. We are young and the general wisdom is that you should start off with higher prices. This is because you need it and because you can always lower them later (but you can rarely raise them).

The sixth consideration is the most important. In everything that we do, we want to constantly ask one singular question: what is best for the poor? Not: what is best for DonorSee? Not: what is best for our donors? No. We are here to serve those in need and we intend to focus on that with great intention.

With all of that, we are now left wondering one thing. If we change our margins, how will that impact those in need? Will we be able to help more people or less? Will we be more effective or less?

I Would Greatly Appreciate Your Help

As I stated above, I don’t consider this my decision. This is our decision. You have given on DonorSee and you have read this post because you care about building the future of charity. A future that we’re all proud of. But that future requires hard work and (most importantly) hard decisions.

I would value your input. Below is a 2 question feedback form. When you get a moment, would you mind filling it out and letting me know what you think about this decision?

2 question feedback form: