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For many years, traditional charities like Save the Children have relied on monthly donations to fund their projects, The New York Times reported. In exchange, donors would get a photo and a note or drawing from the children their donation has helped.

Now, however, individuals who want to give similar gifts don't have to go through the charity but can give their money straight to the individual asking for it via crowdfunding sites like Fundly.com, Indiegogo.com, CrowdRise.com or GoFundMe.com. In these platforms, people who need help try to raise funds from sponsors. The site, meanwhile, gets money from getting a cut of the total funds raised, the report said.

However, this method of donating has given rise to questions that concern nonprofits. According to the report, two of these questions are, "If young people give to these single-issue causes, is there less likelihood they will donate to the legacy charities such as the Red Cross, United Way and, yes, Save the Children? Does the individual and direct nature of crowdfunding act as a spur or a drain to such longtime nonprofits?"

Center for High Impact Philanthropy at the University of Pennsylvania Executive Director Katherina M. Rosqueta told The New York Times that crowdfunding lures younger donors who want a more direct connection to the people and causes they want to support. However, this direct link does not always translate to crowdfunding being more effective. She said the established and larger charities have deep experience and knowledge in their area. She explained, "They've had to measure and manage their own results for donors. People might feel a more direct connection in crowdfunding, but it doesn't mean it's doing the most good."

Citing data from research firm Massolution, the report said that in 2012, crowdfunding has raised around $1.6 billion in the US and $2.7 billion around the world. While this is small compared to the $300 billion secured by nonprofits in the US alone based on the report of Giving USA, the report said the figure of funds raised by nonprofits remains at a standstill. American households continue to give an average of $1,500 a year on the average to charities, the report said.