How Big is the Gift Economy?
Reading a Netsquared interview with Robert Tolmach, founder of Changing the Present I came across a startling figure. Tolmach refers to a $250 billion gift economy.
I initially thought he was referring to the micro-lending economy. Have small donations become such a hit? “How much of that 250 billion is exchanged online?” I thought to myself.
Upon closer reading I realized Tolmach was talking about the actual “gift economy” which is spurred on by every Christmas, birthday, etc. He is trying to find a way for people to give chartable gifts to their favorite cause or nonprofit.
“At the same time, none of the non-profits have enough money, and we’re all passionate about our favorite cause. We’re spending 250 billion dollars a year in this country alone, buying presents for each other. We’ve all given and received some great presents, but we’ve also all given and received some not so necessary ones. A lot of people just don’t want any more stuff, so, you don’t have to buy stuff to show your love. Another way to show your love is do something meaningful in a friend’s name.”
Still – it got me thinking about several possibilities.
- Could donation to an investigation even be considered a “gift” in the traditional sense of the word, as in – here’s my gift to you.
- What is the “donation” economy (which is a closer definition to what I usually call the “gift economy.” How much do Americans donate a year? How much of that donation is now happening online?
How “low-hanging” is the fruit of donations? National Public Radio seems to do fine with it. In fact, they are one of the most well respected news organizations in the country sustained on the backs of donations. I’d argue, however, that the appeals for donation they make could be more refined online. In fact, with some clever thought NPR could achieve more than Spot.Us’ wildest dreams. They already have tapped into the gift economy, are well respected and have a cadre of reporters ready to pitch the public.
Perhaps NPR will make the jump to community funded reporting in the future after Spot Us has jumped in and figured out what does or doesn’t work. I would certainly invite them to do so.
UPDATE: Ask and ye shall receive. The State of Fundraising Online: Results of a Giving USA Survey.
Very interesting stuff.
When I give a gift or make a donation I think about the values and effectiveness of the organizations. One of the things about Spot.us that excites me most is the simplicity of giving to an individual. Its fundamentally different than giving a gift to a entire organization with many projects.
Often times large organizations, for profit and non-profit, have VERY inefficient systems to manage money. Many times the actions of these organizations border, or cross over into, the realm of mismanagement of funds and fraud. Sometimes they support causes that aren’t shared by donors. Its really hard for individual donors to have an effect on a situation like this once the funds are donated and spent.
Right now I am not crazy about some specific actions of my local NPR station. If I give them a gift how do I vote with my donation for or against specific actions of this organization? It seems the ability to donate to an individual on specific projects will help reduce this problem. By donating to one project being completed by one person a individual donor can donate funds to projects they deem worthy.
Keep this up Dave. I tell people all the time how great I think the Spot.us concept is. Looking forward to the implementation and results.
Dave,
How big is the “donation economy?” Lots of research on that – the conventional wisdom gets put together each year in http://www.givingusa.org, although this is just the departure point for answering this question.
Could a donation to an investigation be considered a true “gift”? Even in the narrow sense of the term (which I think is what you’re referring to): absolutely. People have been donating “in memory of” and “in honor of” since the first bar mitzvah!
Any good fundraiser – whether they do it online, at your door or kitchen table, through the mail, whatever – spends as much time trying to understand what the donor is looking for as in making the case for the cause or organization as an appropriate vehicle for achieving that donor’s purpose in life.
There’s also a growing academic field of study coming out of (of all things) behaviorial economics looking at gift economies and the transactions that make that up.
More TK, for sure. Keep the discussion going.
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