Groupon = Fundraising 2.0 for Nonprofits?
While online coupon service powerhouse Groupon has recently been the subject of scrutiny for its ad spot during the Super Bowl, business has hardly skipped a beat. Groupon’s revenues have been going gangbusters (rumored to be at the lofty tune of $800 million to $2 billion for 2010) and most of its 26.5 million users and featured businesses would agree that it’s been a win-win for all parties involved. Several similar sites have also emerged, including LivingSocial and BuyWithMe, which certainly attests to Groupon’s successful business model.
So, the big question for nonprofits is: Can we leverage this new channel to support fundraising efforts and initiatives? And if so, how?
The answer is yes, opportunities do exist that can fulfill the interests of the nonprofit sector, its business partners (the focus of the second part of this two-part series), the daily coupon site and its users. For nonprofits, Groupon and other sites boast an attractive audience largely comprised of college-educated women aged 18-34 with moderate to significant disposable income. While on the younger side of the traditional “ideal” donor, tapping this discerning, cause-conscious yet difficult-to-reach segment can afford charities an opportunity to cultivate the next generation of philanthropists and get them onto the “gift ladder.”
In addition, some sites like Groupon allow nonprofits to advertise on their site for free. Charities can also actively benefit from a “Groupon” deal, whereby each coupon sold is matched by an underwriting partner and 100% of the monies raised go towards the cause. This makes the ask that much more compelling for site users, as not only are they supporting a great cause, but they also have the satisfaction of knowing that every dollar they donate is effectively doubled. The only real “catch” for nonprofits in this instance is that Groupon will place the onus on them to find a partner. The Chronicle of Philanthropy summarizes a great example of how matched giving can work on Groupon: DonorChoose.org partnered with the Pershing Square Foundation last May and was able to raise $162,000 on Groupon to support public education projects.
Moreover, in the world of hyper-segmentation, a myriad of daily coupon sites are emerging to meet the needs of the many market segments out there. Moms have notably and appreciably been the sweet spot of several such sites, including Plum District and DoodleDeals – depending on your cause, these may well be worthwhile investigating. New York’s best established mom daily coupon site, PoppinsPerks, also donates 10% of all its sales to DonorsChoose.org (yet another great coup for this early adopting NGO of the daily coupon cyberspace). Other sites (CauseOn, GivShop, Philanthroper) seek to do well by doing good while appealing to a cause-conscious audience and donating a portion of their revenues to local charities. Groupon, which originally evolved from The Point, an online platform that allows individuals and groups to galvanize action for causes they care deeply about, is now looking to go back to its roots by introducing G-Team, an added layer to a Groupon deal that will allow a social good to take place if a pre-determined tipping point is reached (e.g., if X number of Groupons are sold for a given deal, then a local book shop will donate Y number of books to a public library).
Please tune in next week for the second part of this two-part series, where we will explore how running a cause-related campaign on daily coupon sites can be advantageous to businesses, and how nonprofits can attract business partners to align with them.