02/11/2014 01:02 pm ET Updated Feb 11, 2014

Why Crowdfunding Trend Worries Traditional Nonprofits

Paul Bradbury via Getty Images

THE ads ran for years. The global charity Save the Children asked for a monthly donation, and in return, a few times a year the donors received a photo and handwritten note or drawing from children in impoverished places like Haiti.

The idea, of course, was that donors would have some sort of connection to the contribution. Most people knew that, in reality, the few dollars were not given directly to those children but to projects that would supposedly benefit them.

Nowadays, if people want to offer a similar gift, they can go to any number of crowdfunding sites where lots of small donors give money to a project or venture — like,, or — and bypass the middleman altogether.