Online Giving At the Big Kids Table

March 8, 2019      Nick Ellinger, VP of Marketing Strategy, DonorVoice

An occupational hazard of blogging is the envy that arises from reading something you wish you’d written.

That’s how I felt about Steve MacLaughlin’s The End of the Beginning for Online Giving.  In fact, if you read only one blog post today, 1) put this one down, 2) pick that one up, 3) come back to this one tomorrow, and 4) make more time to read blog posts (please?).

In it, he talks about the 20th year of online giving using the treasure trove of data Blackbaud analyzes and spotlights a few truths:

  • Digital is just another channel. That is, there’s no longer any justification to separate an offline strategy and an online strategy; there’s just a strategy.  Channel thinking distracts us from the things that our donors have in common and thus is a poor way of thinking about segmentation. (As Steve notes, donors don’t distinguish whether they’re “online” or “offline”.)
  • We still aren’t using the best practices that emerged years ago. Steve gives the example of defaulting to an amount other than the lowest on your ask string. I’d echo that and recommend our ask string white paper that has ideas for ask strings– both online and off.
  • Mobile continues to climb in usage:
  • Year-end continues to fall as a percentage of revenues. Or, as Steve puts it, procrastination isn’t a strategy.  Don’t let the “when” of giving crowd out the “why”.
  • Crowdfunding continues to expand.

He also has some excellent predictions, which I won’t copy here as I feel I’ve already stolen enough of his post.  (Did I also mention he has a book for sale? ( Roger called it a “fundraising classic”.)

So, online giving has gone from the kiddie to the adult table.  Thinking about this, we here at Agitator HQ had a few more implications to share.

Online becoming just-another-channel highlights the need for a donor focusAs we talked about here, when a new channel opens, there’s a gold rush.  The early mover gets the advantage, the early bird gets the worm, and the people who make real money are the ones selling the jeans and the equipment.

More mature channels, however, are more efficient.  While there are still things we can do like better framing our ask strings, many of the mistakes we’ve made have been learned from.  We work to be ever more efficient, but each erg gets us less and less an impact.

That’s why it’s necessary to go deep, not wide, with our donors.  Facebook is a great example – ad rates are shooting up and response is declining.  That means that the bad ads, the generic ads, are priced out of the tactic.  Only those who know the potential donor and their audience can survive.

Online will not be a panacea.  At best it will be a semiacea.  Blackbaud talks about how online giving accounts for 8.5% of all revenue.  That’s up from 7% in 2012.  Let’s assume it continues that rate of growth in the proportion of the gifts it accounts for on a percentage point basis.  We’ll be up to 10% of giving by 2024.  We’ll hit 25% by 2084, plus or minus.  I myself plan to be dead by then.

Online is growing.  Yay!  This will ripple on what and how they give to which we will have to adapt.

But online is not growing so quickly that we can throw out other things, despite what your new social media coordinator or board member blanching at your cost of fundraising might think.  Multichannel and channel agnostic acquisition, engagement, and retention is critical; no channel where your donor wants to hear from you should be left out.

There’s also the concern that new donors acquired exclusively online still don’t retain as well as offline ones,–although that’s likely more on us than it is on them.  Blackbaud reports 22% first-year retention rates for online and 29% for offline.  Neither of these is a number to write home about;  hence my freak-out about retention rates on Wednesday.

Online still needs some civilizing.  The Online Wild West isn’t fully tamed and settled.  There are still cattle-rustlers in the form of “services” who would hold hostage our donations and try to make a buck by standing between us and our donors.  As we settle and tame this channel, it’s time for us to kick out the bad actors, deciding what we want this channel to be for us.

Online still has some surprises.  We still think of online as a means of getting donations and constituents.  Nothing wrong with that.  With limited exceptions like your charity: water’s, your Kiva’s, your DonorsChoose’s, and your Oxfam donor preference apps, we haven’t used it to innovate on our structures, our models, our offers, and who we want to be as organizations.  We haven’t taken full advantage yet of crowdfunding, directed donations, user-generated content, and technology to expand our missions in other contexts.  In short, we haven’t look beyond the transaction.

A minor example: I’m keeping an eye out for good positions for some folks in the nonprofit community.  Most positions say you must be in the headquarters.  If you are not local, you must uproot and move.  Given the digital tools today, I’d argue that not only do they not need to be in headquarters, they would not need be on the same planet except for the poor state of Martian WiFi.  Since an hour-long commute is the happiness equivalent of a $40,000 pay cut, you can get better, happier people at more competitive salaries if you allow them to work from home or nearer their home.  Our online tools allow this, but we don’t use them this way.

So, yes, digital is now just another channel.  It’s time to fully integrate it into the family without thinking it is the Chosen One.

Nick

5 responses to “Online Giving At the Big Kids Table”

  1. Tom Ahern says:

    Nick, where do I start? Laugh out loud funny … and wise. Thank you.

  2. Gail Perry says:

    It’s always bugged me that this data tends to understate the importance of digital channels.

    Here’s why: Of all the $$ contributed, only 8.5% comes via digital portals. Yes, this makes sense because very large gifts are not made in cash. They come in the form of securities, land, and other assets. High dollar gifts don’t get charged to credit cards.

    But digital IS responsible for a much higher percentage of the total number of gifts – not total dollars contributed. I think if we looked at it from this angle, we’d see digital playing a much more important role in the world of smaller contributions.

    • Nick Ellinger says:

      Interesting – where can I get # of gifts by channel data to correct the record?

      I had thought that online generally had a higher average gift when mid-major donors are removed, given the $147 average gift reported by Blackbaud (also, the cynical part of me had said that an online giving provider would report whatever the bigger number is between donors and dollars — since they report dollars, # of donors would be lower in this scenario). So I want to correct my priors if that’s not the case. Thanks!

    • Coin Up says:

      Great insight, Gail! We have to dissect data in various ways to understand the power of numbers. The number of online donations will most definitely increase for the sheer reason of convenience if nothing else. Credit cards and checks are going to quickly become antiquated at the rate we are going, defaulting even more into online transactions. The best functions of online donations are that it is inclusive and accessible – allowing everyone to donate at any level!

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