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Strength in Numbers

Date: 11/28/2011

The Wall Street Journal As big donations fall, nonprofits look to make up the shortfall in volume. The trick is reaching the masses. By RUTHIE ACKERMAN It all adds up.

With the shaky economy taking a bite out of big donations, more nonprofits are turning to small donations raised through nontraditional methods to help fill their coffers. Many are using online social networking to draw in the large numbers of donors needed to make small contributions add up to big totals, often relying on individual donors to enlist their friends and others to help.

"Just as microfinance uses innovative tools to reach credit markets and solve problems in poor countries, microphilanthropy uses the same innovative, bottom-up approach to fund raising," says Una Osili, the interim director of research at the Center on Philanthropy at Indiana University, in Indianapolis.

The trend has gathered steam since the American Red Cross raised some $32 million through $10 donations texted to the organization in the wake of the Haitian earthquake of 2010. The widely publicized success of that campaign opened the eyes of many donors and nonprofit groups to the possibilities of microphilanthropy.

Building Networks Small donations aren't replacing the big gifts that have always supported large-scale charitable organizations. Rather, they are a way for nonprofits to diversify their fund raising so that they don't rely too heavily on any one method, says Ms. Osili.

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