Robert X. Fogarty, founder of Dear World, had chance to photograph Edward at Chicago Ideas Week event at the beginning of October.
I also decided to post Edward’s inspirational speech. It’s very long but if you have some time, I strongly recommend you to read it because it’s truly fantastic.
Hey, thanks a lot. Sorry, all these people came out and learned their lines, and the actor shows up and I need my script. Ridiculous. It’s ridiculous. It’s great to be here, and thanks for having me. I’m going to start by thanking my friend, collaborator, guru, Eric Lovskovsky [spelled phonetically], who’s one of Chicago’s great innovators and philanthropists and roped me into it.
And anything Eric takes seriously for Chicago, probably the rest of the world should be paying attention, because we’ll all be following his lead pretty soon. So thanks, Eric.
When I heard that the topic was philanthropy and giving back and everything, I thought it was a good opportunity, because for a number of years, with all love lots of friends and family have been saying to me that I should go to a 12-step meeting somewhere and say, “My name is Edward, and I’m a philanthropy addict.” And I’ve never done it. I’ve always assumed I would sort of get withering looks, that people would think I was being glib about addiction. But here, I feel like I can say that, and there’s probably a lot of you who relate. And I’d say, “I’m an addict,” and people will say, “Hi, Edward, thanks for sharing,” you know.
So I’m only semi-kidding. In the last — in the last 15 years, I overdid it. I substantially overdid it. I got involved with too many organizations. I joined too many boards. I took on a very primary role in too much fundraising. I’m not going to list it all. She read about a third of it.
Nobody would believe me. It would make me sound superficial, and you would assume I was a dilettante and not really engaged with the things. But I promise I’m really very, very passionately engaged with the things that I get involved with. And I’m sure many of you can relate. If your life takes you into interesting places, there’s just — there’s a lot of great work being done out there. There’s a lot of very inspiring people, amazing organizations. And, you know, let’s face it: Making movies is fun, but there’s a lot of problems in the world that really need fixing. And being engaged in those more substantive endeavors is very enriching and life- expanding and all of that.
That’s what always pulls me in, and then — and then, I find myself asked to fundraise. And that’s when it turns into this terrible weight of obligation. Sometimes almost feels like an albatross around your neck, because, you know, this is the dirty, hard work of supporting the great work that people up here have been talking about. And, for me, it got more aggravating as I began to really peek under the hood and look at the dirty secret that we all know is under all the great work and all the great organizations, under the hood, which is that raising money costs a lot of money. And the more I looked at that, the more I became really dismayed with the sense that it really costs much, much more than it needs to, that a lot of the strategies being engaged are three generations old, and that the cutting edge of how a new generation, my generation and younger, of people are interacting with each other, transacting, supporting the causes that they care about, has really not been effectively absorbed in terms of the strategy that most organizations are pursuing.
And, you know, this is understandable, because, obviously, the role of an organization is not to raise money; it’s to fulfill the mission at which, hopefully, they’re — you know, they’ve very expert at. And fundraising is this tertiary responsibility that they have. The problem is, they need to invest their resources in their mission, which means they can’t invest too much in fundraising and development, which means it’s hard for them to get the best talent and really pursue and invest in the most innovative ideas, and that means, ironically, they get stuck doing the same old stuff and spending too much to do it. And I think, you know, it’s fair to say that most organizations are spending over 20 cents on every dollar that they raise. They’ll tell you different. They’ll tell you it’s less, but in my experience, when you really look at it and add it all up and amortize, like, staff and everything, very, very few organizations are pulling off a better yield ratio than that. And when you go to a big gala dinner and buy a table and eat a dinner that you didn’t want and hear a music act that you would have never bought a ticket to on your own and you watch a video that you could have watched at home online in your pajamas, and then you find out that that event cost 50 percent of what was raised that night to produce it, you reach the conclusion — I did — which is the title of my talk here, which is that rubber chicken dinners suck, and crowdfunding is awesome.
And rubber chicken dinners suck, as does direct mail consultants, anything that you pay for up front and hope that it works and find out that it costs way too big a chunk of what you raised in the raising of it. All of that is just terrible, awful. And in getting aggravated about it, I found that, for me, you know, the fantasy that started to grow in my head was that there was a better way of doing this, that you could come up with, what, I thought, you know, an outsourced, performance-pending, radically cost-efficient way to leverage, you know, macro-philanthropy capacity with grassroots, peer-to-peer crowdfunding strategies that raise a lot of money, do it very efficiently, and have the added benefit that they pull a lot of young people in and keep them engaged and cultivate the next generation of activists and philanthropists.
So, to follow my personal problem of working too much on fundraising for organizations and being engaged in this whole second and third full-time enterprise that I didn’t have time for, I started a company to do a better job at raising money for all organizations, which has become even more of a full-time job than the problem that I was trying to solve, and has doubled down on my problem. Which has led me, at times, to say, “What — you know, what is wrong with me?
Like, what is wrong with me? I’m a successful actor. I’m bi-coastal. I’m living the dream. And I keep doing this. It’s so stupid.”
So, despite having established that I’m an idiot at lifestyle management, I do think that what we’ve been doing at CrowdRise is instructive and that other people can learn from my compulsive addiction and pain. These are the themes, I think, that are really relevant.
Efficiency, leverage, youth, and fun. It’s got to be fun. And those are the things that we’ve been speaking about. And engineering around CrowdRise which is a company I should not have started. But which I will say is one of the most awesomely talented and inspiring teams that you could ever hope to interact with and I hope that some of you are lucky enough to. What we’re doing on kind of a tiered level is we’re trying to help individuals on a grassroots level be independently very, very effective at backing the causes they care about and at tracking their own long-term impact, taking pride in it and owning it as a part of their long-term personal narrative by giving people a platform, a long-term permanent platform, for them to stage their philanthropic lives on and to effectively fundraise for the causes they care about. We’re helping organizations raise money in a more innovative way, leverage major donor support with much stronger grassroots, strategies that are more cost-efficient. We’re helping foundations leverage the investments they’re making and assist their constituent organizations with more than just cash by bring them, you know, strategic capacity through us. We’re helping a lot of corporations leverage their CSR dollars with grassroots, campaigns, and reorient their whole impact strategy in the sense of instead of trying to engage customers in cause-related activities that they arbitrarily picked, flipping it, and getting — trying to interact with their customers based on what customers care about, what their customers are supporting themselves.
And we’re doing all of this and bringing it in at a cost of under 8 percent. That’s our commitment. And for those of you in organizations out there who are overly fixated on price versus effectiveness, which I think you have to learn to distinguish between, actually half of the cost that we declare, will do this at, is actually the embedded cost of credit-card processing and organizations are already paying on their own site. So we’re actually talking about delivering these new strategies and fundraising modalities if you want to call it that for really an incremental cost above the credit card fees of a couple percentage points and you only pay it if it works. So that’s how we’re trying to revolutionize the whole cost-expense model.
So before I talk about specific things that we’re doing, I just — here’s a few statistics that I think are amazing because everybody in this room in one way or another is thinking about like where’s philanthropy going, how is it changing, what do we have to do to adapt to it? Think about some of these statistics. Overall individual giving in the United States has stayed pretty consistent over the past five years. But online giving, as a percentage of individual giving has doubled in the last five years. It went from 5 percent of individual giving in 2000 to 10 percent in 2011. So more than double the percentage just over the last five years, that now likely totals $20 billion being donated online annually. Network For Good, one of the great instruments of moving money to charity shows that online giving was up 14 percent in 2011 after being a 20 percent in 2010, online giving is the fastest growing segment of all individual giving. And this is kind of an arcane one, but first time online gifts is 37 percent of all online revenue, which means that a lot of people are moving into online giving every year and doing it for the first time. So it is a huge, huge growth sector within how we are all moving money into the causes we care about.
This is interesting too, within online giving, one of the highest yields and lowest cost strategies for mobilizing online giving is peer-to-peer fundraising, which means people backing the cause they care about not with their own dollars but by mobilizing their networks and relationships leveraging their own financial capacity to actually micro-fundraise for the cause they care about. That’s the highest yield online fundraising strategy today. And this is where it gets very interesting. People age 20 to 25 are overwhelmingly more willing to give and more willing to ask their friends and relatives to do the same when they feel passionately about a cause and raising money rates much higher than donating money in surveys as the criteria for what delivers the biggest sense of the engagement with the cause. So young people are basically saying they feel more engaged with the cause if they raise money for it than if they donate to it.
This is amazing too. The Chronicle of Philanthropy study, which a lot of this is pulled from, says that the same people age 20 to 35, 70 percent of people surveyed between under 35 years old, 70 percent, they have said, they have helped solicit donations. Not donate, they have helped solicit donations by encouraging their colleagues and others to support a cause. That means peer-to-peer fundraising, relationship-driven cause support is the next generation engine of grassroots fundraising, period. No contest. That is how it’s going to get done by the next generation of activists and philanthropists and almost all of the peer-to-peer fundraising is being done online.
So, like, what do we take from all that? There’s this whole new generation of people out there that, for one thing, are living online, transacting online, socializing online, doing their cause- related life online. Number two, they know how to network, they have a demonstrated willingness to ask, not just to donate. And C, they’re young, they’re looking for fun, they’re looking for adventures, for life-expanding experiences, empowering experiences, and they do not want snail mail please and thank you letters to fulfill that desire. So, what should organizations, foundations, corporations, be doing to activate that next generation engine? How do you get that leverage and turn all that on?
I’m just going to run through some of the things we’ve been doing that have worked really, really well. And when I say these are just a few, I really mean there’s a lot of ways to skin this cat and this is just a couple fun things that we’ve come up with. I’ll try to rip through them pretty fast.
So, matching campaigns. Okay, this was — a Japanese-American family offered the Red Cross $500,000 to support the Fukushima disaster and they said it had to be matched within a month.
So the Red Cross asked CrowdRise if we could do, like, 10, 15 percent of that match online.
We did 70 percent of a $500,000 match in less than three weeks in donations of under $100. So, matching — you know, what does this say? Organizations, if you’ve got major donor capacity, don’t ever leave it on the table one to one; lever it up, get two for one through a grassroots match campaign, because people are very responsible to the idea that their dollar is going to get matched by some bigger donor. It’s a very, very strong incentive to get people to donate, and this worked really well. Event — I mean, participatory events like marathons, we all know what huge peer-to-peer fundraising engines these are. The numbers are amazing, but companies, like, for instance, John Hancock, which is the main label sponsor of the Boston marathon, had had over a thousand slots in the Boston marathon for years, never activated them for fundraising. We got John Hancock to mount its 1,100 runners in the 2012 Boston marathon. They raised $6,700,000 with 11 runners in less than two months; $4,500 a head they averaged, for 90 charities. And they’re on fire now; those guys can’t wait to do this again. And there it was, lying there dormant, this thing that their company was doing ever year was lying dormant and they weren’t doing anything with it. So we helped them activate that.
Some people don’t want to run marathons. These guys got creative, they’re a bunch of trainers, they just did push-ups for charity. Push-ups for charity! They raised almost $300,000 getting
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people to have their friends back them for doing push-ups. Unbelievable. [laughter]
This one I love. This is one of my favorite things that we’re working on. You know, if you think about running a marathon, you can be running a marathon for the Nature Conservancy, what do the two things have to do with each other? Like, nothing. But people back it all the way. People who are volunteering — of which there are millions of people in America volunteering, especially the young people — people who are volunteering are working at the work of the organization.
Why wouldn’t you get your volunteers to leverage their activity the way a marathon runner leverages the activities for fundraising? This was a guy, a hedge fund manager in New York, who had been self-funding this group called the iMentor, where finance professionals mentor inner-city at-risk kids in computer science skills. He’d been funding it himself. They had never considered this idea of treating all their iMentors like a marathon team. So we mounted them up on a team page and, in a month, just by asking their friends and family to back their volunteering, they raised $112,000. If you think about how many people are volunteering in America, and if those people treated themselves like marathon runners, the numbers are off the chart. Off the chart. We regularly see volunteers who ask their friends and family to back them like a runner, putting down much, much bigger numbers than your average marathon race. So we think sponsored volunteerism is a huge strategy that lots of people are leaving on the table and should activate. Yeah. I mean, a really easy one. Birthdays. Everybody’s got boards.
Everybody’s got huge supporter networks. You know, we’ve found — now, this is a famous actress, Sophia Bush, but she made $63,000 just by hitting her social network and asking people for this great group Pencils of Promise. And we’re seeing not-famous people regularly raise over $5,000 and even toward $10,000 in birthday campaigns. Huge way to activate your network without asking them for another dollar. Let them ask their friends for it.
We think there’s a lot of other things you can do. Weddings. This is two people who set up on our wedding registry and made $13,000 with their wedding instead of things. Again, something that’s very easy to ask your network or your existing base of supporters, your board, whatever.
We’ve got a big program to — with the knot, the wedding site, to promote the idea of turning weddings into a charity impact.
Obviously, lots of organizations — Jonah Hill, who’s a friend of mine, and very funny. Lots of charities have someone well-known who support them. And Jonah just went out on his social network, you know, raised $61,000. There’s no reason at all not to have anyone notable who’s supporting you using their resources to fund. This is really interesting. This is a football game between the Trojans and UCLA. And they had this whole thing going on, and we sort of said to them, “How come you’re not leveraging the competitive nature of the game into some competition for fundraising?” So they picked a joint cause. We put a little widget on their existing site. And you see, they raised almost $170,000 just in the students competing in and around the competition of the game. So we took something that was competitive and fun and people were already fired up about and just leveraged it that way, which was really fun.
This is something that’s really interesting we’ve been starting to do. This is something relating, I think, particularly to corporations. We’ve been doing these challenge campaigns where — we’ve done one with Patagonia. We’ve done a very successful one with Groupon for Earth Day. We’re heading into our second round with Mozilla Firefox. And what — Martha Stewart is doing one with us. What we’re doing is saying, “Look, if you have $50,000 that you were going to give away, don’t run some stupid contest asking for essays and taking the best three essays and giving some money to a couple organizations. Take the same amount of money, make it available as prize money, invite organizations to fundraise and compete for it. You’ll be giving the organization something to reach out to their base with, and someone will win the money.”
Mozilla leveraged the money they gave as prize money 12 to one. The organizations raised 12 times the prize money. Patagonia leveraged at nine to one. With our Groupon campaign, in only three weeks, for Earth Day, all the conservation organizations competing for $50,000 from Groupon raised almost $400,000 in three weeks. So, in terms of, like — oh, and by the way, the Firefox campaign got 80 million impressions. Mozilla wanted to tell its own story, and they got over 80 million impressions in this campaign, because obviously a couple hundred groups were reaching out through their whole networks and, you know, for the brands that have supported these challenge campaigns, they’ve gotten phenomenal PR, and they’ve taken the dollars they were already going to give and leveraged them up into, you know, many times over. So we think that’s an interesting idea.
I like this one just because it shows, clearly, an individual person being creative. These two guys — you can’t really see it well enough. They created rhino suits, and they ran around through American cities. And the video was so funny that they raised $21,000 for this thing. But this I like because it’s — they did it on their own. The organization called us up and said, “What the hell is this? We just got $21,000.” And we said, “There’s two guys, like, running around in rhino suits. They’ve put up a page on our site.” And I kind of love it. It’s just creative.
So, you know, what does all this have to say? I think — here’s my kind of point. This is my final slide. I think it’s kind of fun. Yeah, okay. So this is my surfing guru Dan, who’s insane. He’s one of the great surfers in the world. This is him surfing a wave off New Zealand that’s just a behemoth, because you get in the slot, and you’re in this great place, and then it throws off this horrendous ledge off the face, and it just wipes everybody out. And I show this slide because I genuinely believe that, in their secret hearts, this is what a lot of organizations and companies and foundations think is going to happen to them if they try to grapple with this crazy wave of change that’s taking place in the online network world and take it on. But Dan made it. He made it. He did well, had the ride of his life. And he rode it to glory. And I think the point is, is that we all can too. We’re trying to engineer this so that there’s not that much risk involved. You may wipe out a few times, but we’re trying to do it so as I said, you’re not paying to experiment, you’re paying in success, and I think that this is the scale of the wave that I think is taking place within philanthropy, I think it’s going to be happening within 10 years in ways we don’t even recognize right now.
And you’ve — we’ve got to commit, we’ve got to go for it. Everybody’s got to commit to this new level of engagement because otherwise we’re going to miss the whole next generation. And at CrowdRise, you know, we’re doing this all day every day, we’re seeing people achieve all these kinds of incredible successes, and we’d really like to help, so please call us up.
So I feel much better, I feel like I’ve had my 12-step group, thanks for letting me share. I’m still a philanthropy addict, but I feel like I’ve got a community of support around me, thanks.