It’s right that a charity mobilises and directs (donated) funds where it identifies there is greatest need. The ‘general purposes fund’ is something a charity will fight to protect at all costs. But this position is becoming more difficult to sustain.

The general public do not always understand how their donations are used by charities. Young people now prefer to fundraise for a cause, rather than donate to an organisation (do challenge this view if you think it incorrect). Increasingly, more discerning donors (or those with a lot of cash anyway) like to channel their donations through specific (and more glamorous) projects to measure their impact and effectiveness, in much the same way as they would any commercial investment.

These shifts in the ‘giving landscape’ will only accelerate. The image and reputation of charities will increasingly depend on their ability to demonstrate value and impact. Blogs and other forms of social media bring new opportunities (and some risks) to charities who are willing (and well equipped) to take advantage to further their mission.

This was the broad topic under discussion at a thought-provoking workshop held at NCVO on Thursday. We were brought together by Megan Griffith from NCVO’s Third Sector Foresight project. Some of the other contributors have already blogged about the session, including Molly Webb (Demos), Nick Booth (Podnosh), and David Wilcox.

I expressed a few opinions last week, which will attempt to share with you here.

We can all agree, I think, that the web has empowered individuals and invited more scrutiny into the work of organisations.

Charities are not immune from this evolution but they do have a secret weapon: compelling stories.

Some fifteen years ago, I frequently travelled around the UK for Oxfam talking to often quite large groups of the charity’s dedicated supporters about ‘third world debt’ and ’structural adjustment’. Inevitably, I weaved in human stories from the ‘field’ to help illustrate the impact of these reforms on those living in poverty, the intended beneficiaries of Oxfam’s projects.

Intrinsic to good storytelling is the conversation that it generates. Dialogue always (or nearly always!) followed my ‘debt’ workshops.

Blogs and social media provide the best tool set yet to continue the conversation.

Let me return to the issue of donations and accountability for a moment. Back in the summer, Justgiving announced on their blog (aimed at their charity clients) that they had amended their terms and conditions “to make it clear to our individual users that their chosen recipient charity reserves the right to use the funds raised through our site for its general purposes, not a particular appeal.”

I found this interesting, not least because Justgiving has transformed the process of charitable giving in the UK. (Declaration of interest: I was on the Justgiving payroll, albeit very briefly, in 2002).

The public must know whether they are contributing to a particular project, or to the general work of the charity. Why does this matter? Crucial to answering this question is understanding what makes people tick.

Some have a personal connection to a charity or cause (e.g. cancer prevention); others of us will have been ‘emotionally engaged’ through images beamed back to us from a disaster zone.

Interestingly, despite younger people normally being the least likely to give to charity, polls taken soon after the December 2004 Indian Ocean tsunami tragedy indicated that a whopping 86% of 18-24 year olds said they gave money to a charity in response to the disaster.

Certainly the epic scale of that disaster pulled at heartstrings and loosened purse strings like nothing else since Bob Geldof’s Band Aid phenomenon a generation earlier.

I would still argue that most people now have a much looser affinity with an actual organisation – and “Generation Y” (or Generation “Why” as Oxfam would have it) use online social networking (and their mobile phone) as their primary method of communication (See “Email is for old people”). Causes and single-issue campaigns are arguably what build a movement and put ‘fire in the belly’ (but more about that another day).

Actually, I’ve just purchased the domain name – mycauses.org.uk – but will willingly give it up to any organisation which promises to use it wisely. Or I might sell it to MySpace if they agree to establish a “My Causes” tab on their social networking site!

I’m not suggesting charities ‘throw the baby out with the bathwater’ and pull their existing fundraising campaigns. The old-fashioned collection tin remains the most popular way of giving to charity. I’m talking ‘baby steps’ here, poco a poco… although within a few years I do expect job roles and budgets to have been juggled around.

For example, I would encourage you to recruit a social media champion. This individual may already work for you. Find out who it is, tell them that he or she is now the charity’s ‘Buzz Director’, and ask them to identify where your key audiences gather online and join in the conversation.

I’ll be exploring how you do this on this blog.

Darren put a percentage of his weekly blogging income into ‘buying’ chickens through Oxfam Australia. He invited his readers to contribute as well.

A “chook-o-meter” in his blog sidebar tallied the number of donated chickens.

If you have a blog, consider using it to promote the Oxfam Unwrapped catalogue. Since the first catalogue (launched for Christmas 2004), shoppers have bought 700,000 ‘gifts’ through the scheme. Oxfam UK told me that chickens proved a particular hit with shoppers in 2004, with 520,000 birds ‘delivered’ to communities where the charity works.

Oxfam America will launch its first ‘alternative gift’ catalogue next week.

Thanks to Britt Bravo for the tip off.