May 13, 2016; Pittsburgh Tribune-Review

Editor’s Note: Following the publication of this article, the Pittsburgh Foundation reached out to NPQ with some clarifications. Among these points, the foundation has not made a decision on what it will seek in terms of restitution. While Kimbia has made an offer of restitution to the organizations impacted by the technological difficulties on the Day of Giving, the Pittsburgh Foundation is evaluating all of its available options. As of yet, the foundation is still working to determine the cause of Kimbia’s issues and believes a third party evaluation may be useful in that investigation. The Pittsburgh Foundation has not yet made a decision whether it will be changing suppliers, but is considering other potential platforms while investigating the cause of Kimbia’s issues. 

 

It is a question for our times. What amount of compensation is appropriate when a technical problem disrupts a national campaign? This is the question at hand for the Pittsburgh Foundation, which is seeking restitution from Kimbia after a malfunction on the fundraising platform caused the Foundation to cancel its Day of Giving campaign, one of the largest coordinated fundraising efforts in Western Pennsylvania and a campaign that was occurring at the same time in 53 other communities.

To summarize the NPQ Newswire’s previous coverage of this story, Kimbia has said that a hardware issue caused problems with processing donations on its site. Some donors were repeatedly charged a processing fee; others were unable to give at all. Kimbia was the major platform used in Day of Giving campaigns across the nation. Many of these drives had been growing in donor numbers and total raised; however, after these issues, user responses indicated that a large number of foundations would switch to a different site for future Days of Giving campaigns.

Among those organizations is the Pittsburgh Foundation, which was early in announcing its intent to cut ties with Kimbia and host another Day of Giving campaign this year using a different platform. Currently, the Pittsburgh Foundation is seeking input from the nonprofits that were set to benefit from the Day of Giving to determine how much restitution to ask for in negotiations with Kimbia.

According to the Pittsburgh Foundation’s president and CEO, Maxwell King, the Foundation wants “a better understanding of the degree of loss in our community before concluding our negotiation.” Instead of settling for a one-percent discount on credit card processing fees (from 2.99 percent to 1.99 percent), the foundation is surveying nonprofits to ensure it knows what will really make good on the snafu.

Kimbia has announced its own efforts to try to pay back the nonprofits that were set to benefit from the Day of Giving campaign. Kimbia CEO Daniel Gillett has offered to forgo his salary for three months, giving these funds instead to nonprofit organizations that were a part of the campaign. Kimbia has also offered to waive technology fees for the rest of the year, although credit card processing fees will remain the same. Lastly, the company will begin hosting online fundraising classes to help nonprofits get the most out of their development efforts.

Some of these offers do appear to fall short, however, as it can be argued that Kimbia will benefit from these efforts in the future. For instance, online fundraising workshops would lead to more funds for the nonprofit organizations. If these organizations choose to stay with Kimbia beyond this year, the technology fees will be reinstated and Kimbia will once again earn a profit for each transaction. The nonprofit organizations on the other hand, certainly lost donors this year. How many donors will come back to the organizations in the future is unclear.

It is arguments such as these that make it difficult to pinpoint the true cost that is owed to the Pittsburgh Foundation. This is even before adding in staff time spent preparing for the campaign within the Pittsburgh Foundation and the 965 nonprofit organizations that signed up for the campaign in Western Pennsylvania alone, in addition to the loss of income from matching gifts that went unrecognized.

Some regions appear to have survived the event and come out on top. The Sacramento region, with 570 participating nonprofits, exceeded its $6 million fundraising goal with a $7.1 million total, though it had to extend its campaign to make it happen. At Purdue University, the third annual Day of Giving raised $18.3 million in 24 hours—surpassing last year’s $13.7 million by 33 percent and more than doubling the $7.5 million total for 2014, though it is not clear that it used Kimbia this year.

We would love to hear from other nonprofits and localities about how the problems at Kimbia affected the campaign and how you managed through the problems and with what results.—Sheela Nimishakavi