Is Online #Fundraising Really Worth Your Time?

For years, nonprofit organizations have invested significant amounts of time and money to build online fundraising efforts that have steadily evolved to embrace more and more sophisticated technologies and methods. But, are those efforts really worthwhile?

The Blackbaud Institute’s recently released Charitable Giving Report: How Fundraising Performed in 2017 can help us answer that question.

The news about overall philanthropy in 2017 is good. Blackbaud reports:

A convergence of economic, political, technological, and philanthropic trends helped boost giving in 2017. The 4.1% increase in giving during 2017 was a substantial jump compared to relatively flat growth in 2016. A strong stock market, spikes in giving in response to political issues or disasters, and the continued shift to digital giving all influenced giving in 2017. This growth was also fueled by a 5.1% increase in giving during the final three months of 2017. The potential implications of new U.S. tax laws may have contributed to this late surge in charitable giving.”

The news about online giving is also good. Blackbaud has found:

  • 7.6% of overall fundraising revenue, excluding grants, was raised online representing a new record high.
  • Online giving grew 12.1% in 2017 compared to 2016.
  • 21% of online transactions were made using a mobile device in 2017.
  • The average online donation is $132.
  • 20.1% of online giving happened in December.

Online is an important source of donations for nonprofit organizations of every size as the following chart illustrates:

 

 

While online contributions represent a significant source of charitable gifts, the fact remains that other sources generate much more money for charities. In other words, traditional direct mail, telephone, and face-to-face appeals are still massively effective and important.

Nonprofit organizations should make it easy for donors to contribute. In part, that means providing donors with a variety of ways to give so that they can choose the avenue that’s best for them. Because charities can raise a significant amount of money online, they should have a well-designed online giving strategy.

While providing donors with the ability to donate online is increasingly important, fundraising professionals need to keep their perspective when it comes to online giving. The amount of time and budget resources invested into online fundraising should be proportional to the potential return. For most organizations, that will mean spending far more time and funding on direct mail, telephone, and face-to-face appeals.

The bottom line is that engaging in online fundraising is worthwhile as long as you keep things in perspective.

You can download the free report from the Blackbaud Institute by clicking here.

That’s what Michael Rosen says… What do you say?

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7 Responses to “Is Online #Fundraising Really Worth Your Time?”

  1. Thanks for sharing the good news about online giving, but for reminding us that tried and true methods are just that, tried and true.

    • Sophie, thank you for your thoughtful comment. When we learn from the mistakes and successes of others, we benefit without the need to invest heavily in research and development. For nonprofits with limited budgets, it’s a great way to learn.

  2. The financial impact of online giving on small organizations is almost double the percentage compared to large organizations. Should this suggest that small organizations place greater emphasis in online giving since smaller organizations do not have a well-developed and robust mailing that medium or larger organizations do? What are the additional benefits likely to ensue from online for the smaller organizations?

    • Solomon, thank you for raising some interesting questions. While small nonprofits raise a higher percentage of giving from online fundraising, we need to be careful about what we read into that. For example, it is not necessarily the case that online fundraising makes more sense for small nonprofits compared to large ones. What it simply might mean is that small nonprofits are less successful with major gift fundraising than larger organizations are. If that’s the case, then small nonprofits would be wise to put greater effort into cultivating major gifts. The key for small nonprofits, indeed any nonprofit, is to diversify funding streams. Since small nonprofits are already doing well with online fundraising, I’d like to see them do better with other funding streams. Also, I’d like to see all nonprofits do a better job of retaining donors, particularly those who give online.

  3. Hi Michael, Welcome back!

    It’s no surprise that online giving continues to rise as people become more comfortable with the convenience and safety of electronic transactions. And the report is correct to point out that “While the nonprofit sector is lagging broader retail trends, the continued shift by donors is in line with consumer behavior.” Online giving’s growth rate has shadowed that of retail ecommerce for some time now.

    What is a surprise is that Blackbaud’s report still draws a distinction between online and offline giving. Because, like retail, giving has become more integrated than an either/or proposition. For instance, it would be helpful to have insight into how many people give online in response to a direct-mail appeal, printed newsletter or that telephone call.

    And even though ecommerce accounts for nine-ish percent of overall retail spending, more than 80 percent of buyers engage in some sort of online activity such as looking up product information, comparisons, reviews, etc. I suspect there is similar behavior when it comes to giving, whether online or offline.

    The bottom line is that it is becoming increasingly important to think in terms of donor behavior rather than channels and to ensure that all touch points are well integrated and consistent.

    • Michael, thank you for your kind message and for raising an important point. While talking about multi-channel marketing/fundraising makes some sense, we need to be careful to not think of such efforts as silos. When fundraising professionals take advantage of multiple channels to communicate with prospects and donors, we need to think about those channels in a holistic, integrated way. As you’ve pointed out, integrated fundraising strategies will yield the best results.

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