Online giving is growing – is your nonprofit keeping up?
Mar 19th, 2009 by Amy Southerland
“The online giving channel must be an integrated part of an entire direct marketing program because although offline donors do not generally migrate to online giving, online donors do migrate to offline channels in large numbers. In addition, online donors tend to downgrade when they move offline, further evidence that online donors are not cultivated to their full potential.”
This is one of the key findings in the 2008 DonorCentricsTM Internet Giving Benchmarking Analysis, released on Wednesday by Target Analytics (a division of Blackbaud). Nonprofits should definitely have a look at this report - not just the key findings, but the full report - as it’s full of great graphs and plenty of food for thought.
The findings in this report underscore many of the things we’ve been talking about on SPURspectives - including the importance of the donor-recognition cycle, how to use social media to attract and keep new donors, and why your online efforts need to be part of a larger 1:1 integrated marketing strategy.
Online giving is growing - and it can grow your base
The report finds that “for the 12 organizations participating in the most recent forum in January 2009, a median 9% of all donors gave online in 2008″ and that “online giving accounted for a median 11% of all 2008 revenue.”
Then there’s this finding, which really gets at why nonprofits need to be investing in their online presence and embracing social media: “Online donors are disproportionately new to the organization’s file. For the typical nonprofit in this analysis, about half of all online donors are new each year. A much smaller proportion of offline donors are new.”
To make the math easy, let’s say a nonprofit has 10,000 donors. If 9% of its donors are online donors, and half of those are new donors, that’s 4.5% - or 450 new donors in a single year. If an organization has 100,000 donors, that translates to 4,500 new donors. Clearly, online giving presents exciting opportunities for nonprofits trying to expand their reach.
Pathways for future giving often lead offline
The report also finds that “significant portions of donors who were acquired online switch to traditional direct mail in their second year of giving. For the twelve organizations participating in the most recent forum in January 2009, a median 33% of the donors who were acquired online in 2007 gave offline when they renewed in 2008.”
In large part - as the report recognizes - this is because nonprofit organizations have greater expertise and devote more resources to conducting mail campaigns, so once they gain a new donor through online giving, future communications and solicitations are more likely to come through the mail. More sophisticated online fundraising campaigns would likely reduce or reverse this trend.
Ideally, nonprofits will get smarter about online fundraising so that more donors who start out giving online continue to do so - after all, online gifts are easier and cheaper to process, and online campaigns can save on the costs associated with printing and mailing. It’s also easier to ask your donors to spread the word through online networks, thus helping you recruit more new donors.
At the same time, first-time donors who start out giving online should always be included of your overall fundraising strategy, online and off. The opportunity to cultivate new donors should not be missed because online donors are treated differently (or ignored completely).
