When someone starts a business, they spend a bunch of time with a business plan, working to raise funds and get it off the ground. After that, though, the purpose of the business is completely aligned with the idea of not running out of money. We run a business to make money, not to spend it. If done well, there’s no more fundraising after a startup period.
On the other hand, nonprofits sign up to do at least two things.
They’re here to solve a problem, to address trauma, to enrich the culture, to do the difficult work that we’re not always able to do on our own.
And yet, at the same time, we require them to raise money. Not just for a little while, but all the time.
The more successful they become, the more money they need to raise.
Along the way, it’s not unusual for a nonprofit to spend 50% of the money they raise on the expense of raising more money. That’s not because they’re inefficient, it’s because we are.
We demand a gala, or an emergency, or artfully written fundraising letters. Donors want personal attention from the folks who are ostensibly doing the front line or strategic work of the nonprofit, and treat regular donations as an exception, not the standard.
When the internet arrived, it dramatically lowered the transactional costs in a wide variety of industries. You can buy an airline ticket yourself faster and with less intervention than through a travel agent. You can buy stocks for transaction fees that are a tiny fraction of what a broker used to charge. But creative and effective nonprofit fundraising has been stuck in a cycle of risk, galas and uncertainty.
GOODBIDS is making it easier for a nonprofit to create an event that might capture the attention of regular donors as well as new ones. It still requires some effort to secure the prizes, but our tool significantly leverages the work of the nonprofit and the fee we charge the nonprofit is a tiny fraction of what it usually costs to do fundraising.
Today’s new auctions are rare collectibles donated by special friends:
Apple sponsored these luxurious jackets for the crew on the original movie. Guy signed his for you, making it doubly collectible.
I hope you’ll check out how positive auctions are working for charities you care about.
PS bonus tip: Each Goodbids auction has an end date and time, but the auction is automatically extended when someone bids near the end of the window. That means that there’s no benefit to waiting until the last minute, because there isn’t a last minute–the auction keeps running until the bidding is done.
There are few sitcoms, thrillers or plays where the plot can tolerate the addition of a cell phone. Once the characters have the ability to connect and clear up misunderstandings at will, a lot of tension disappears. If Juliet had had a smartphone, she and Romeo would have ended up married, living in a house in the suburbs.
And the ubiquitous meeting-in-person has a similarly long history. And yet they still happen with very few changes, with power getting the head of the table, traditionally privileged voices being the loudest and no accommodations for new information or asynchronous interactions.
Political debates are largely unchanged since Lincoln’s day. Yes, we have microphones now, but it hasn’t occurred to the organizers to use a timer and simply turn off the mic when time’s up, not to mention including real time fact checking. We still reward bullying, bloviating and dances of dominance.
Email, once the most modern form of interaction, hasn’t changed much at all since I got my first address in 1976. There are a hundred ways it could be dramatically more effective and efficient, but it’s stuck.
Weddings, high school graduations and funerals also remain similar to the way they’ve always been.
One reason these formats stick around is that they are connection devices, and we often believe that we have to stick with the status quo, because getting everyone involved to agree on a new method is too difficult. And yet, new methods do arise… but sometimes we stick with the old ones without wondering why.
Humans have been communicating and coordinating since the beginning. But in the last fifty years, we’ve transformed the tech–now we need to think hard about whether we’re sticking with something because it works, or because we always have done it that way.
Every internet success works because the network effect kicked in.
There’s no other way for an idea to reliably and economically reach a big enough audience to be sustained. That’s why Super Bowl ads make so little sense in 2024.
Ideas that spread win.
I wrote a bestseller about this 20 years ago, and I still take the insight to heart.
One challenge with fundraising is that it’s awkward to share. Perhaps your friend isn’t ready to donate, or isn’t interested in the non profit… It simply doesn’t feel as easy or as fun as sharing a silly video or meme.
Also, if you’re in an auction, you probably don’t want to share it with others, because they might outbid you.
That’s where the second innovation of GOODBIDS comes in.
Every registered user gets a unique referral link. If you share that link and someone bids, you get a free bid. In any auction you like.
The free bid can be for any amount. And if you get the reward with that free bid, it costs you nothing (and it doesn’t cost the charity anything either).
A deadhead cares a lot about this guitar. A business owner would walk across hot coals to spend time with bestselling author Nicole Walters. And unlike the commercials, jerseys are actually worth something to fans.
These are worth sharing.
If you tell your friends about one of these auctions, post on Reddit or share on social media, and someone bids any amount, even $10, your special link will get a free bid added to your account.
You can use that free bid to participate in the Apple Watch auction at $350 or $550.
It works because the free bids simply ratchet the auction forward. If you get outbid, the new donor just put in $360. If you don’t, it’s still raising as much as it would have if you hadn’t used your free bid.
I’m imagining that some folks will bid early in auctions because they want to support the charity and the work they’re doing, or because they’d like to be part of something. And it’s likely that many people will eagerly spread the idea of GOODBIDS to support a charity they care about. Or because the reward is really cool and worth talking about. Or because they’d like to earn an account filled with free bids.
That’s the first part of the confusion. It’s a group of people who can’t decide what the thing they do is supposed to be.
Is it:
Advertising
Publicity
Increasing retail distribution
Direct and measured response
SEO
Making the logo pretty
Wholesale and trade relationships
Maintaining the status quo and not screwing up
Keeping the website running
Positioning
Creating network effects
Community engagement
Strategy
Listening hard to market desires
Customer service
Customer delight
Quality metrics
Mass market promotion
Branding (whatever that is)
And seven other things we could name and argue about…
If people are confused about what they do, perhaps that’s why it’s hard to move forward. What’s this meeting for? How do we know we’re working on the right things? What’s important?
Call it what it is. Say what it’s for. Describe what you do.
Over the next few days, I’m going to feature a new project we launched today. A small and mighty team has been working on this for a year. I want to share the highlights along with some of the critical design choices we made along the way
Each year, charities in the US raise about a billion dollars a day from individuals. That money goes to great use–for the arts, for healthcare, for education, for countless projects that benefit our communities.
Because our society hasn’t built in a passive way for these organizations to get funded, they need to actively fundraise. It’s exhausting and frankly, a grind. No one particularly wants to take risks or spend extra time being creative, since it’s a required chore, not the point.
In creating GOODBIDS, we set out to create a new way for worthy causes to raise money, something that would be fun, remarkable and generative.
The core of the idea is the Positive Auction. While it seems a bit like an eBay auction, there are actually some extraordinary and game-changing twists.
The key is this: Every bid is a donation.
Today, we launched three auctions, with more to come all week:
The bidding starts at $10. It goes up in $10 increments and you can’t skip a step.
So, $10, $20, $30, etc.
Each bid is actually a non-refundable donation.
That means that if you bid $10 and someone outbids you at $20, your donation still goes to the charity. You get an email confirmation of your donation and peace of mind. Someone else is going to get the reward–unless you choose to bid again.
The last donation gets the reward.
The magic of a Positive Auction is in the math. If the bidding for the session with Jason goes to $1500 (far less than its value), the nonprofit will get up to $112,000 in donations.
We’re going to be launching a range of extraordinary auctions this week, all with donated prizes. I hope you’ll check them out and be sure to tune in tomorrow if you’re a Dead fan.
The defenders of the status quo often demand certainty when facing decisions about the future.
It sets up the conditions for doing nothing, because certainty never happens until the future arrives.
It’s much more useful to look at probabilities.
Flipping a fair coin has a 50% chance of coming up heads. That’s a risky bet.
On the other hand, there’s more than a 95% chance that the sea levels in Miami will be significantly higher in ten years. Is that a bet you want to take the other side of?
As soon as we can begin discussing probabilities, we can sit on the same side of the table and refine our estimates and our risk profiles.
But certainty? Certainty is another word for stalling.
Have you ever wondered what the wiring layout behind the control panels at Abbey Road studios was like?
Neither have I.
The Beatles recorded some of their best work there, and I have no idea if it was a rat’s nest of tangled wires, or if each wire was labeled, coded and perfectly aligned.
Just as I have no idea if Eliot Peper writes his novels in Scrivener or Word.
Yes, of course, for sure, it helps if your tools are properly arranged and maintained. Yes, it saves time and effort to embrace mise en place and get your workspace right.
But making it even more right, alphabetizing the pencils and making sure your servers all have the right names–that’s simply stalling.
When a resource can be used more efficiently, we end up using more of the thing, not less.
So, when cars get better gas mileage, people drive more, and consumption can actually go up.
When AI learns to write computer code, the demand for programmers goes up, because more efficient code is more attractive, and we want more of it.
Household appliances that are designed to save time and trouble end up being used for more than simply maintaining the previous level of tidiness. Because it’s easier, we raise our standards for tidy and use them more as they get easier to use.
We rarely consider the fact that human beings have invented 6 billion jobs in my lifetime.
My hunch is that AI is going to produce far more opportunities than it destroys.
April 6, 2024
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