Juicy stats, benchmarks and lessons on online giving
- Wed, March 18 2009
- Filed under: Fundraising essentials
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.
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Comments
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)
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Such an informative and insightful article- thank-you for sharing this all.
Coming to you from a brand new non-profit Food Rescue Program in the Bahamas.
Thanks for the information. Your stats are very helpful in working with others to convince them of the value of on-line fundraising- On another note, we just e mailed invitations to an event to 700 of our donors and got 250+ (!) kicked back to us- not a good result!! How can we collect accurate, home email addresses?
Sally Stanton
Hi Sally -
That’s a great question! As you know, having a lot of names isn’t the key to a strong list—it’s having a lot of qualified, accurate names. Here are a few tips for building and maintaining a clean email marketing list:
1) Consider using a double opt-in email capture. This simply means that whenever someone new joins your email list or when you add someone (with their permission!), an email goes to that email address with a confirmation link. As soon as the new subscriber confirms their opt-in, you can begin sending messages to that address. This will ensure you’re not getting spam-bots or misspellings—as you would not get a follow-up from either type.
2) Make sure you’re capturing email addresses everywhere possible. Whether it’s at special events, on your direct-mail pieces or via a link in the email signature of your possible correspondence, always drive people to subscribe to your list. As you continue to add people to your database and people manage their subscription preferences, hopefully many users will correctly enter their contact information.
3) Try segmenting your list for future mailings. Send an email campaign with the sole call-to-action for people to update their information. Obviously this will not work for the folks whose emails “hard-bounced,” but the soft bounces and less active members of your email audience will have the chance to follow-up.
4) Keep an eye on those email that are bouncing back. If these are all donors, you certainly want to make sure you’ve got their correct information. Try to reach out to them via other means—perhaps a phone call, small direct-mail campaign or an individual email directly from you—if/when time and budget allows.
5) Make sure you’re using an email marketing tool that has strong relationships with ISPs. If the tool you’re using is highly SPAM-y, say Outlook or another, consider updgrading to an email marketing service with a good reputation likely to get past firewalls and other blockers.
For more tips, you can visit Network for Good’s Learning Center at http://www.fundraising123.org, and search for other ways to build your email list.
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When you consider the amount of donations that were made online with the Obama Presidential Run, it tells me that it is really only a matter of time before we see online giving take over direct mail. Afterall, look at what is happening to television viewing? The shift may be gradual, but it will happen.-
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