Micro-funding- The wave of the future for non-profits?

There is a growing trend of using social media as a means to raise funds for a variety of causes. Why? Well, the obvious reasons of peer pressure and viral involvement come first, but in addition, people don’t need to donate large amounts. These sites often accept micro-payments and use the power of social media sites like Twitter, FaceBook, YouTube and blogs to rally large numbers of small donors, and it just may be proving to be more viable than relying on a few large donors.

Twitter / SmallCanBeBigI happened to see a post on Twitter the other day that drew me to click on the link and then follow through with a donation almost immediately. It was from Small Can be Big, a group which works with local shelters to identify people in need and then posts their stories on-line seeking donations to help.

“Only $92 left to keep this single mother’s gas on. Please give $1: » link to A Mom Works Toward Independence, Until Winter Throws Her a Curveball.”

The Tweet was a day old already, and by the time I got to the site they had raised the capital she needed. Needless to say I browsed around to learn more and made a couple of small donations right then and there.

How does it work? Take a quick browse of the main categories on the site. Fending off eviction, escaping domestic violence, keeping the power on, bootsrapping a better life, giving grand kids a second chance. All are categories in which real people are experiencing real problems that we can all understand and help with. Making these donations just feels good. We’re not giving to some remote entity or corporation, knowing about the individual’s needs makes it very personal, and so that much more rewarding.

Where do the recipients come from? SmallCanBeBig works directly with local charities and shelters in Massachusetts to find families and individuals who need our help. They write up the stories and post them on the web site and feature them in their social media channels, getting the word out worldwide and raising the necessary funding. When you donate you donate directly to the charity through Google checkout.

Is it working? Absolutely. The site launched on January 14th and they have successfully raised funds to take 15 familes “off the site”.  As funds get tighter and tighter in this economy non-profits are struggling for big donors and even the small donations are becoming rare. Using micro-donations like this might well be the wave of the future. Do you know of any other organizations like this? Please list them in the comments and tell us your stories.