By Cheryl Hall The Dallas Morning News
WWR Article Summary (tl;dr) Forget black-tie galas in a hotel ballroom, the future of fundraising is digital. That's according to one entrepreneur who is creating a one-stop shop for philanthropic fundraising.
Todd Wagner is warning nonprofits to go digital in their fundraising efforts or die from natural causes in the not-too-distant future.
"Technology is a freight train coming down a mountain," says the billionaire philanthropist. "It is not going to stop. It's only going to go faster. And either nonprofits embrace it or they get run over by it."
So the 56-year-old founder and CEO of Dallas-based Charity Network is offering them a death-defying route.
Wagner is using some of the billions he's made from being Mark Cuban's partner in Broadcast.com and other media and entertainment ventures to create a one-stop shop for philanthropic fundraising.
He's assembled four subsidiaries in a network that holds global online auctions and sweepstakes, produces videos and commercials, creates broadcast content and comes up with ways to make sure that donated money is being put to its best and most-leveraged use.
Forget black-tie galas in a hotel ballroom attended by aging boomers that cost too much and raise too little, Wagner says.
Stick to traditional forms of bringing in bucks and you probably won't be around in 10 years because your donor base is aging out.
"I always say, 'If you know 20 people who will each write a million-dollar check, good for you. But for everyone else, you need digital,' " Wagner says.
Today, a staggeringly low 6 percent of giving is done online.
"Digital is 20 times more efficient per person hour in raising money," says Wagner." We're going to put real statistics behind this."
If you want to reach millennials, you've got to become part of their digital landscape, he says. And hiring one person to handle Tweets, posts, emails and God knows what else that's about to come to the forefront does not an online strategy make. "That's like saying, 'I have one technology person, and now I have a technology company,' " Wagner says.
Reach out and touch a millennial
Last year, playwright Lin-Manuel Miranda wanted to share the bounty from his sensation, Hamilton, with a cause near to his heart, the Hispanic Federation.
So the 37-year-old winner of the 2016 Pulitzer Prize for Drama used Wagner's sweepstakes subsidiary, Prizeo, to offer two pairs of tickets to Miranda's final Broadway performance and a chance to hang out with the star as the grand prize.
Just under 40,000 individuals made donations and entered the sweepstakes.
Donors got increasingly better thank-you gifts and more chances to win depending on their levels of giving. Ten bucks got them a thank-you e-card and 100 entries; while $10,000 got them a pair of house seats to Hamilton and a backstage tour and 100,000 chances to win.
Giving the big bucks didn't turn the tables in their favor. One winner, Michelle Bozza, 28, donated $10; the other, Kathryn Stamm, 16, kicked in $45.
The final results: The sweepstakes brought in more than $2 million.
Miranda has since used the Charity Network to hold online auctions and sweepstakes in cities where Hamilton is touring. Thus far, 250,000-plus new donors have contributed more than $7 million for his favorite causes. That includes the Planned Parenthood of America and the Gilder Lehrman Institute of American History in addition to the Hispanic Federation.
Not surprisingly, Miranda has more fundraising campaigns planned this year.
"It has been a pleasure working with the Charity Network to support many terrific organizations throughout the U.S.," Miranda says via email. "We've been able to raise impactful funds and reach new donors, many of whom may never have heard of the nonprofits we are fundraising for, and vice versa."
Trust me, Miranda doesn't give gratuitous plaudits.
A business money pit Wagner has spent "millions and millions and millions and millions" building the Charity Network since launching content production company Chideo in Dallas three years ago.
In 2015, he bought Los Angeles-based Prizeo and then New York-based Charitybuzz, which holds global online charity auctions. A year ago, he formed Charity Network and put everything under its umbrella with holistic offices in all three cities.
It also has a network of syndicated partners including Sinclair Broadcast Group, Tribune Co., The Ellen DeGeneres Show, Twitter and Delta Air Lines that distributes its content.
Last month, Wagner purchased Global Philanthropy Group in L.A., which advises celebrities, rich people, foundations and corporations on how best to put their largesse to good use.
For example, the company, rebranded CN Strategy & Solutions, helped the Eva Longoria Foundation create engagement and training programs for Latinas in Texas, California and Mexico.
Wagner's also looking at potential international alliances that would give Charity Network a stronger presence worldwide.
Expenses are evenly split, with the charity typically getting 80 percent of the net proceeds and Charity Network the remainder.
Last year, that amounted to more than $40 million raised for good causes.
Charitybuzz auctioned one of the first Apple-1s built in 1976 by one of Steve Jobs' best friends in his garage. The historic computer sold for $815,000 for the Leukemia & Lymphoma Society.
Another funky item auctioned in 2016 was one of the three Fiats that Pope Francis rode around in during his trip to New York the previous September. It sold for $300,000 and supported the Archdiocese of New York.
"A second one went to Sotheby's a few months later and sold for $30,000," says Ben Erwin, Charity Network's senior vice president of business development. "So again, that's the power of putting it on a global stage. We got press all over the world. A ton of it with Italian outlets. So we were able to reach a larger group of folks who have an affinity toward His Holiness rather than the traditional auction house with a few hundred people. And who knows if they came there to bid or just to witness something cool."
Charitybuzz also auctions one-on-one experiences with business A-listers.
Lunch with Mark Cuban sold for $85,000 in support of OnePulse Foundation, set up in the aftermath of the attack at the Pulse Nightclub in Orlando, Fla.
For the past four years, Apple CEO Tim Cook has offered coffee with him. Last year, that sold for $515,000 and benefited RFK Human Rights.
It's easy to hit home runs with huge celebrity names, but Wagner says it works on a less celestial level.
Jennifer Sampson, CEO of the United Way of Metropolitan Dallas, can attest to that. United Way used Charitybuzz earlier this month to auction face-to-face time with local members of the Young Presidents Organization. The online bids totaled $32,000, of which United Way took in $25,600 over the course of just two weeks.
"That's pretty impressive in that we did nothing more than a couple of social media posts," Sampson says. "It was an experiment for us and I was very pleased. There's a lot more that we can do to make it more visible and interesting in the future."
Another slice of Charity Network's business is helping corporations with their foundations.
Last year, Chideo produced a three-video series at its studios in Deep Ellum to promote PetSmart Charities' National Adoption Weekend. One video, "Mike and Simon," follows the real-life tale of mixed breed and extremely cute Simon as he was rescued, cared for and adopted.
Virginia Nelson, content manager of PetSmart Charities, says the four-minute spot hit the mark of raising awareness for PetSmart Charities' in-store adoptions. "To date, it has been one of PetSmart Charities' most watched videos, demonstrating the power of authentic, high-quality cause-related content and storytelling."
All this led Fast Company to name Charity Network one of its most innovative companies in its February edition. Charity Network is a for-profit company that's not making any.