The unexpected success of the online philanthropy initiative, Day of Giving, could spell its demise.
The Pittsburgh Foundation, sponsor of the event that has generated $21 million for regional nonprofits since its launch in 2009, is evaluating whether to continue the program beyond 2014. The primary issue is limited resources to provide matching funds for the growing number of donations.
"We simply can't continue to grow the matching pool ad infinitum because we are limited in the money we can make available ... and we are sort of overwhelmed with the success of the program," said Grant Oliphant, president and chief executive of the foundation.
Last year, all donations made during the Day of Giving were matched from a pool of $850,000 in foundation funds. The same amount of matching dollars is expected to be available for this year's event scheduled for Oct. 3.
Because of a steady increase in the number of donors, by last year the match had shrunk to 10 cents for every dollar donated.
"That was by no means a trivial amount," Mr. Oliphant wrote in a letter to nonprofits last week. "But as the match continues to decline in the face of rising demand, it begs the question of how long the program can continue and still be worthwhile."
More than $8.5 million was raised last year for nonprofits in Allegheny and Westmoreland counties during the 24-hour period in which donors make gifts exclusively online at the PittsburghGives website.
During the inaugural event -- which Mr. Oliphant acknowledged had "a rocky start ... thanks to faulty technology" -- Day of Giving attracted about 1,000 donors. By last year, nearly 18,000 individuals had participated.
The foundation hopes to better distribute its funds this year by limiting the match to the first $1,000 of each individual donation. Previously, up to $10,000 of each gift was eligible.
"Now more [donors] can give without negatively impacting the total match," said Mr. Oliphant.
That came as good news to at least one organization, A+ Schools, a nonprofit that advocates for improvements in the Pittsburgh Public Schools.
"This levels the playing field a little bit for smaller organizations like ours," said Carey Harris, executive director of A+ Schools, which has an annual budget of approximately $800,000.
"We always plan to participate but we don't count on the match. We treat it as gravy," she said.
The Pittsburgh Foundation has committed to conducting a Day of Giving in 2014 which Mr. Oliphant said could be part of a national event possibly held in the spring. Meantime, the foundation will talk to nonprofits and donors about how to proceed beyond next year.
In his letter to nonprofits, Mr. Oliphant warned them not to build Day of Giving funds into their 2015 budgets.
For Rosemary Mendel, executive director of Tickets for Kids Charities, a nonprofit that provides tickets to sporting and cultural events to low-income children and families, the heads-up did not come as a surprise.
"It's certainly not unusual that a program like this will eventually undergo some changes particularly when it's been so successful," she said. "For all of us who have used it for a real upswing in giving, it says we have to find a way to make sure we have that funding from other sources. We can capitalize on the spirit of it and make sure we get other contributions."
Tickets for Kids, with an annual operating budget of about $550,000 not counting the donated tickets it distributes, received about $41,000 through Day of Giving contributions and matching funds last year, said Ms. Mendel.
"We have to be smart and strategize on ways to replace that."
Mr. Oliphant said the foundation exceeded its initial goals for Day of Giving in terms of creating the PittsburghGives website where donors can find detailed data on more than 700 nonprofits and by helping those organizations take advantage of social media and Web-based technology to reach donors.
The PittsburghGives website will be maintained but possibly streamlined.
An outcome that the foundation didn't expect was the increasing amount of buzz that led up to the Day of Giving over the years.
Many nonprofits engaged in intense promotional campaigns for the event, especially through e-mail, Facebook and other social media. Mr. Oliphant noted, "Now there's a sense of excitement and momentum and community happening around that day."
Joyce Gannon: email@example.com or 412-263-1580. First Published May 21, 2013 10:45 AM