Why the Rise of Direct Giving Poses an Existential Risk to Traditional Nonprofits

The analysis documents how donors increasingly bypass traditional charities through direct giving, crowdfunding, and donor-advised funds. For New York City's nonprofit ecosystem, the data points to structural pressure on the intermediary model that sustains most established organizations.

Mechanism: mapping the displacement

The report defines disintermediation as people cutting out the middleman charity and giving directly to people in need. Rogare director Ian MacQuillin noted that the think tank attempted to investigate this phenomenon over a decade ago, but the issue has since amplified. The trend manifests across multiple channels: peer-to-peer giving, citizen fundraising independent of charity structures, philanthropy advisers, donor-advised funds (DAFs), and giving circles.

Two documented cases anchor the analysis. In 2022, members of the public booked Airbnb rooms in Ukraine without traveling, routing booking fees to perceived beneficiaries. Separately, 99-year-old Captain Sir Tom Moore raised more than £30m for NHS charities by walking laps of his garden during the pandemic. The report introduces "citizen fundraising" as a distinct category from volunteer work: individuals who raise money through crowdfunding channels with no connection to established charities.

Sector implications for NYC organizations

The structural model assumes the 501(c)(3) sits between donor and beneficiary. That intermediary role carries compliance overhead, reporting costs, and program delivery infrastructure. When donors route around it, the fixed-cost base does not proportionally contract. Overhead ratios become harder to justify to funders who observe peer-to-peer alternatives at near-zero administrative cost.

The report frames disintermediation as a disruptive challenge to the voluntary sector's conventional role as the trusted intermediary between donors and beneficiaries. The Rogare white paper is positioned as phase one of a four-phase project aimed at helping charities reintermediate, meaning to find ways back into relationships and processes from which they have been displaced.

Operational checks for NYC nonprofits

• Map donor channel data: identify the percentage of giving flowing through intermediary platforms versus direct organizational channels.
• Benchmark overhead ratios against peer organizations in the same subsector; intermediary value claims weaken when administrative costs exceed sector medians.
• Track DAF recommendation patterns among major NYC foundations; sponsor-routed grants displace direct solicitation relationships.
• Monitor crowdfunding and citizen fundraising activity in target cause areas; flag peer campaigns capturing donors previously segmented as organizational prospects.
• Assess reintermediation tools: transparency dashboards, impact certification, and beneficiary-tracking systems that restore perceived organizational value.