Technology Glitch Results in Day of Giving Fiasco

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I’m Out of Order / macwagen

May 4, 2016; Pittsburgh Tribune-Review and San Antonio Business Journal

As you know, Give Local America 2016 launched at 11 p.m. CDT on May 2nd. Over the course of the evening and early morning, we processed thousands of gifts and millions of dollars. At approximately 9 a.m. CDT, we began to see latency issues. The root cause of the issue now appears to be a hardware issue on one of our hosted database nodes which caused a cascading effect, impacting our ability to deliver forms and process donations that was further exacerbated by new functionality related to leaderboards, prizes and mobile applications.

The issue did not arise during multiple weeks of high volume testing leading up to the event or in prior events utilizing this same functionality. And, while this is the sequence of events that we see now, we will conduct a full review of this event in greater depth in the coming weeks to discover any other contributing factors.

This is how Austin-based crowdfunding firm Kimbia described the problem that disrupted local giving days across the United States on Monday afternoon. There were 50 community foundations and tens of thousands of gifts involved. Kimbia has a near-monopoly on the event, charging at least 2.99 percent and as much as 6.2 percent on every donation, so although they describe the national event as their “passion,” it has also likely been lucrative.

Kimbia offered—and many sponsors of the Giving Days agreed—to extend their campaigns, but there is no indication yet as to how that will affect giving overall, though some intermediaries have announced some success in the end.

Judging from the comments on Kimbia’s website, the group may have lost its space entirely. Jenny Gerber wrote:

Today is a disaster. Extending hours is really not going to undo the PR damage that has been done. Nor will refunding the processing fees (although at this point that should just be a given). So much effort has gone into preparing for this day, across the nation, and now individual organizations are in crisis mode to salvage donor relationships.

And another unhappy customer writes;

On behalf of nonprofits everywhere I want to thank you for the literally millions of dollars you’ve cost us in lost revenue, the damaged donor relationships we have to fix, and the almost tone-deaf way you suggest “extending the hours” without any real idea of what that means for those of us on the ground.

Many described the losses as multiple in time, energy, relationships and dollars. Ken Charles wrote:

Our community foundation has been preparing for this day for 6 months. Trained the NPO’s, courted the sponsors—and our staff and volunteers did an outstanding job! And now this. Hard to imagine any of the aforementioned folks wanting to try this again. This was our second year and we were excited about the prospects of helping the 45 organizations raise much needed funding. Would like to know what happened. And the “extend the time” idea is lame. Not a fan.

As probably can be sensed even from these, the firm was also faulted for its communications during the debacle:

The bland, corporate-speak updates you give here—and no announcement at all on your home page!—make you look like you hope you can simply sweep this failure under the rug. The lack of candor and transparency is a mockery to all the staff and volunteers at so many non-profits that you’ve failed. I expected your (extremely high) fees were some indication of professionalism and investment in adequate infrastructure—little did I know how wrong that assumption was.

Around the country, community foundations scrambled to reorganize themselves so as not to lose the entire effort. Pittsburgh Foundation was one of the first to announce that they were cutting their ties to Kimbia. Donors there apparently had been charged the processing fee on a single donation multiple times. The foundation’s CEO, Maxwell King, has stated their plans to reschedule the event on another online fundraising platform in the near future: “To resume that enthusiasm, we are committing to reschedule another Day of Giving for the region, which includes Butler, Allegheny and Westmoreland counties, with an underlying online donation platform that we trust.”

The foundation has also since publicly apologized:

We were on track in the first few hours to raise $1.5 million until the technical issues occurred. To resume that enthusiasm, we are committing to re-schedule another Day of Giving for the region, which includes Butler, Allegheny and Westmoreland counties, with an underlying online donation platform that we trust. And we will provide an additional $100,000 in incentives to the $100,000 already in place for today’s event. We also want to assure all participants who were able to make donations today that they will be honored and apply to the incentive pool that has been in place.

These technical issues were basically out of the Pittsburgh Foundation’s control, but the foundation seems to be doing its best to ensure their nonprofit beneficiaries that they will make up for this disappointing fundraising failure not only by rescheduling, but by investing an additional $100,000 to match donations given. But each of the participating nonprofits will have its own damage control to do, as well.—Aine Creedon and Ruth McCambridge

  • joewaters

    Oy.

  • Jon

    To reiterate that this was a communications failure as much or more than it was a technical one: look up the KRCA Sacramento news article about this incident — Kimbia’s spokesperson made the effort that day to give them a statement with specifics about the situation when they did not even share that same consideration or courtesy to their non-profit clients. Obviously, Kimbia’s public relations and preservation of their brand and business is their highest priority — social good organizations be d@mmed.

    As a donor that made an early morning donation that was successful, I am considering asking my credit card company for a chargeback so I can donate directly to the organization in cash, check, or some other electronic means. Kimbia does not deserve their pound of flesh commission while being cold and incompetent middlemen who add no value for any of us.

    • Jon

      Specifically, the KRCA article dated/updated “1:48 AM PDT May 04, 2016” has this statement from Kimbia’s spokesperson, touting their features instead of being humble and contrite:

      “This year we added a lot of functionality and dynamic content, and a lot of nonprofits like it,” Kimbia spokesperson Maryann Jones said. “Offering the data dynamically and at same time we rolled out a mobile app. That combined with also pulling in dynamic data we were getting overwhelmed.”

      And yet again, Kimbia is communicating to the press more than to their clients, because a newer article, dated/updated “8:54 PM PDT May 04, 2016” describes refunds that they have not discussed with those most impacted by the issue:

      “Maryann Jones, a spokeswoman for Texas-based Kimbia, told KCRA 3 that the company charged 2.99 percent for each transaction.

      Jones said the company plans to return a portion of that to the nonprofits but has not yet determined exactly how much.

      She said Kimbia could not refund any credit card fees that might also have been added.”

  • Mehitabel

    This was a disaster of truly epic proportions, and I can’t imagine what kinds of discussions are happening right now at the many nonprofits for which the Day of Giving is a cornerstone of their annual fundraising campaigns. The damage done by Kimbia’s failure to deliver is likely to be far-reaching.

    I am truly unimpressed by Kimbia’s explanation and pseudo-apology for this. Everything is very carefully phrased in the passive voice as if to convey the impression that this is something that “just happened” and that there is no one to hold accountable.

    I am equally unimpressed by the fees that they charge — I thought the fees were pretty appalling before this implosion, and now I think that anything less than a full refund to everyone is very little short of criminal. The last I heard was that Kimbia is going to offer a 1% rebate on their fees. That’s not even close to acceptable.

    I live and work in Seattle, and I sincerely hope that the Seattle Foundation finds a new partner for next year’s GiveBIG.

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  • Shafaq Hasan

    Hi Jon, Thank you for your interest in NPQ. We have recently changed developers of our site, which went live yesterday. Comments were temporarily not displaying properly. We believe the issue has been resolved.

  • Kebo Drew

    This is not the first time that something like this has happened. In 2013, GiveOUT day was started to promote a nation day of giving to LGBTQ organizations. In 2014, giving was even more successful than the previous year, and the crowdfunding platform, Razoo went down with 9 hours remaining. They also extended the hours, so organizations that had been in the lead when the glitch happened (and ensured of matching and prizes) ended up coming in far behind other organizations that had extra time (east coast folks in particular) to raise more. They also refunded most of the fees. In 2015, GiveOUT day was switched to Click & Pledge. In 2016, Bolder Giving, the organization that had developed GiveOUT at first postponed it, and then decided to cancel it altogether, in order to let another organization take it on. Perhaps GiveOUT day will happen this year, and perhaps not.

    So GiveOUT day’s fast rise and success, and failure, and that of Kimbia, should be a lesson for all crowdfunding platform companies and their ridiculously high fees, and giving days.

  • Pingback: Pittsburgh Foundation Wants Full Restitution from Kimbia for Day of Giving Debacle | Non Profit News For Nonprofit Organizations | Nonprofit Quarterly()