Juicy stats, benchmarks and lessons on online giving
Target Analytics today released the 2008 donorCentrics Internet Giving Benchmarking Analysis, which they admit may just qualify as the longest title in the history of online statistical reporting.
In plain English, this is a useful annual study that give you a sense of how 24 big national nonprofits are doing with their online fundraising. You can compare and contrast your results. Loads of fun for the fundraising geeks among us—Benchmark! Experience insecurity! Or smile with schadenfreude!
Here are the highlights from the report (in bold) with my commentary (not in bold). My comments are based on Network for Good’s analysis of the donations we processed for 30,000 nonprofits last year:
·Online giving continues to grow rapidly in 2007 and 2008, even in the absence of major disasters which fueled the growth of online giving for relief and animal welfare organizations in previous years.
Yes, Network for Good saw 34% growth in dollars during that time.
·Even with this growth, online giving is still dwarfed by direct mail giving.
Yes, don’t throw out your postage meter yet. But keep in mind online giving is tracking (though lagging) to the trends of online shopping and banking. It will represent more and more of giving in the future, so get a strong foothold in online fundraising now. With younger donors and higher gifts—and lower fundraising costs—you can’t afford to ignore it.
·Online donors are younger and have higher incomes than traditional, primarily direct mail donors.
Yes, our average donor is 39.
·Over the past few years, online giving has become an increasingly significant source of new donor acquisition.
Yes, studies consistently show this. Another reason you can’t neglect online giving.
·Online donors give much larger gifts than traditional donors.
Yes, our average gift size $125.
·Online donors have slightly lower retention rates overall than traditional donors.
The New York Times did a whole story on this less encouraging part of the study today, natch. I think this is caused by two things: the poor track record of nonprofits in cultivating online donors and the fact that many online donors are reacting to a crisis. We wish more nonprofits would encourage recurring gifts online and that nonprofits were cultivating online donors to their full potential. Since these donors give larger gifts we feel that when proper follow-up and segmentation are put into place, the value of the online donor will far exceed that of other channels. This is especially true when you factor in the efficiency/costs of processing and cultivating them.
·Higher acquisition giving levels and higher revenue per donor in subsequent years may mask issues with cultivation and retention of online donors.
This is really true. Donors give more over time, so the real value of online donors is going to become clearer down the road. In aggregate, the study notes, online donors have much higher cumulative value over the long term than traditionally acquired donors.
·Online giving is not a strong renewal channel; every year, large numbers of online donors migrate away from online giving and to other channels, primarily direct mail.
See above. Also, I know from my own experience, when I give online, nonprofits might only cultivate me by direct mail. The best nonprofits have a nice multi-channel outreach program. Don’t assume people want to give in only one way, online or off.
·Donors to direct mail – the primary giving source for most organizations – rarely give online. In the relatively rare cases when mail donors do give online, they tend to give higher average gifts –both before and after their first online gift. Online donors downgrade when they switch to offline, primarily direct mail giving. Having an email address on file makes a positive difference in the giving behavior of offline donors.
·Donors in the southwest and mountain regions of the United States are disproportionately more likely to give online.
I guess we Eastcoasters are behind the curve.
·Differences in revenue per donor and retention rates between online and offline donors are consistent across geographical regions.
At least we’re not stingier.
Check out the FULL REPORT. It’s worth a read.
If you are STILL with me, then you are truly a fundraising geek like me, so I’ll share more data! This from a Cygnus Applied Research Survey, Philanthropy in a Turbulent Economy.
This study showed:
·More than 52 percent of donors said their gifts would be on par with 2008, while just 17.5 percent planned to give less.
·Donors also said they were giving more to fewer causes (28.6 percent), being more thoughtful about their donations (29.4 percent), and donating more to local charities rather than national or umbrella organizations.
·But the respondents were prepared to make sacrifices to sustain their philanthropy. Of those who planned to give at least as much in 2009, 50 percent said they were willing to make compromises in other areas of their life to do so.
·Most people said the recession would not affect their previous charitable commitments. Of those who were committed to a multi-year gift, 87 percent said they would pay the donations on time…Meanwhile, donors who were forced to make cuts preferred to give smaller donations, rather than halting their support altogether.
·42.5 percent said they would give to a charity they had not supported in the past if someone they knew was seeking the gift. Many donors (40.3 percent) said they were also willing to give for the first time if the charity was working directly to help people hurt by the recession.
Syndicate
Thanks for the post, it was very helpful. Currently our church gives away 51% of all the money we collect in giving and would like to increase that amount so we can give away close to 70 or 80%. What do you suggest is the best application to add to ones site if you live in canada? We would like to add it to our church site (http://theopenhouse.ca)
I’m enjoying your book BTW.