08/20/2013 01:45 pm ET Updated Oct 20, 2013

Cause Crowdfunder Razoo Opens Up To Indivduals

By Noah J. Nelson (@noahjnelson)

Talk crowdfunding with most people (who know that it exists) and you'll find yourself in a conversation about smart-watches and whether it's ethical for established filmmakers to turn to Kickstarter for their next movie.

That's far from the whole picture.

The modern crowdfunding movement can trace it's origin to microcredit sites like Kiva, which sets up small loans between entrepreneurs in developing nations and those who are willing to give them a chance. Of course with creative-focused crowdfunding you don't expect to get your money back, but many people get wrapped up in the ideas of "perks" and pre-orders.

Some of what made crowdfunding such a revolutionary idea--that a distributed group of people can make a huge impact on a person's life--has gotten obscured by a focus on bigger and bolder campaigns.

This is a trend that is ripe for disruption and an announcement today by Razoo, a "crowdfunding platform for causes," is the latest sign that the altruistic heart of the movement is alive and well.

Last week I was briefed over the phone by Razoo CEO Lesley Mansford about the site's opening up of their platform to personal fundraising.

Until today Razoo worked as a portal for nonprofit organizations. A one-stop shop for people looking to give to 501(c)3s. Razoo claims that over 22,000 nonprofits use their site to fundraise, and every registered nonprofit has been loaded into their database, each with a profile page that lets anyone fundraise through the system for the registered organizations.

Razoo is betting that person-to-person giving is the next big thing in charitable giving, and they're not alone. The site Giveforward is already set-up to raise funding for medical expenses, but Razoo's broader focus includes just about every kind of cause a person could think of.

Here's a breakdown of the financial details:

  • These are open campaigns: no mandatory end date or target required before money is disbursed.
  • That also means that money is disbursed even if the fundraising goal isn't reached.
  • Personal fundraisers receive a disbursement each week. By check or electronic funds transfer.
  • Razoo takes a 4.9% fee on each donation to a nonprofit (or from individuals raising funds for nonprofits) to cover expenses and fund its own mission.
  • For peer-to-peer giving the fee goes up to 7.9% plus $.30 per donation.
  • For tax purposes peer-to-peer donations are considered non-taxable gifts.

We've seen charitable campaigns take off before. The viral video of the school bus monitor being tormented by junior high kids comes to mind, so does the Rolling Jubilee of the Strike Debt movement.

The scale of the Razoo campaigns, however, are more geared towards activating friend and family circles than they are on creating windfalls. Windfalls would actually be beside the point: this kind of charitable giving reorients the process so that the actions of a few individuals can have a major impact on someone's life. It is a more personal form of giving, one that harkens back to an age before mass communications.

Not that the nonprofit organizations are being left out of the personal giving formula. The roadmap here includes the ability for Razoo's partner nonprofits to be able to highlight individual campaigns and give them a social signal boost amongst their own communities.

At noon Pacific/3PM Eastern today Razoo will be hosting a Twitter discussion--#GiveChat-- discussing crowdfunding tips and tricks from the @Razoo account. The discussion will also use the #GivingTuesday hashtag.

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