2009 Online Giving – 10 Questions
Last week we reported some data from online firms Blackbaud and Convio regarding 2009 online fundraising.
To refresh you on the highlights:
- Online fundraising revenue was up 46% over 2008 for all groups in Blackbaud’s universe (over 1,700 nonprofits), with 35% of groups reporting no increase in online revenue.
- According to Blackbaud, fully 46% of all online revenue was raised in the last three months of 2009 (not a dissimilar pattern from previous years), 30% in December alone, while only 13% was raised in the first three months of the year.
- Convio projected more than $4 billion will have been raised online in 2009, up 33% from 2008, while the number of online donors will have increased to 110 million, up 24% from 2008.
Here are some questions that occur to me as nonprofit online fundraisers move into 2010 …
1. First, my perennial question: what portion of new online donors represent new individuals entering the overall donor pool, versus existing donors who have simply shifted to the online channel? Individual nonprofits should have no problem answering this question for their own organization, but nowhere have I seen anyone attempt an aggregate estimate for a broad universe of organizations.
With Target Analytics reporting a sustained decline in direct mail donors, is there really any net gain in total donors occurring? I doubt it.
2. So what about online prospecting? Where will genuinely new online donors come from in 2010 for your organization? How will you improve traffic to your website, conversion of site visitors, viral campaigns, offline media support, use of your current donor missionaries, etc?
3. What’s going on with the 35% of groups reporting no gain in online revenue? The tactics for generating online giving are pretty well known at this point, and the software tools are readily available. So in the face of such strong overall online fundraising growth, it is somewhat remarkable to me if a group hasn’t advanced at all in the past year, recession notwithstanding.
My hypothesis would be that for such groups, the revenue decline has occurred in all channels of giving, not just online. If that’s true, the issue isn’t fundraising tactics; it’s the very efficacy or relevance of the organization in changing times or, in economically stressed times, in competition with other similarly-focused groups.
4. For the groups that have increased online revenue, how clearly have you identified and measured the contributing factors? What precisely did your organization add, change, test. etc.? What did you do better? Have you made plans to replicate and expand upon proven tactics and approaches? What else needs to be tested in 2010? Were "exogenous" factors present and important … how will these factors (or their absence) affect 2010 fundraising?
5. If your organization enjoyed significant online revenue (and online donor) growth in 2009, what plans have you made to explore integrated media approaches to raising funds from online donors in 2010? All the evidence suggests that many donors remain multi-channel … and indeed these are the most valuable donors in terms of revenue.
6. What is this first quarter online giving "doldrum" all about? Financial exhaustion on the part of donors? [By contrast, mutual funds historically take in far more funds in the first quarter … a sign that money is available. To say nothing of the online outpouring for Haiti.] Or is it exhaustion on the part of fundraisers? I would be curious to see a "frequency of giving" distribution of online donors (e.g., how many of those December givers only give that one gift?) compared to direct mail donors.
7. Are you researching and screening your online donors for potential upgrade value, the same as you would your direct mail donors? Are you attributing sustainer giving initially generated by the online channel to that channel, to get a true sense of your online fundraising ROI?
8. If your nonprofit has raised increasing online money via social networking tools (e.g., getting a donor’s friends to pledge to a walk-a-thon), how do you plan to reach out to those friends and cultivate their future relationship with your organization? Do you find that the friends are interested in your organization, or were they only responding on a person-to-person basis?
9. And what about those donors of yours who did recruit their friends to give? Have you identified and assigned proper financial value to them? Do you have plans to cultivate them accordingly?
10. Are you devoting as much care to the crafting of your online fundraising messages and asks as you typically would to your direct mail appeals? And is message testing part of your testing regime?
2009 was a banner year for online fundraising … at least for two-thirds of nonprofits if we project from the Blackbaud data. 2010 should be even better, but don’t take it for granted!
Tom
5 responses to “2009 Online Giving – 10 Questions”
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Very thoughtful post – will link on my blog at http://www.nonprofitbridge.com and add my comments
Tom, as you can imagine this benchmark data has been pored over and much discussed — not only by us but also our clients who agonize (or celebrate) depending on what rate of growth they achieved themselves last year. We ourselves have been puzzled by the disconnect between the 46% overall growth rate that Blackbaud cites versus the *much* lower growth rates they publish in the same report both as a medium and also for every single category of nonprofit.
Do you have a theory about this? My own is that the 2009 online donation total Blackbaud used the calculate the overall 2009 growth rate included many more individual charities (~ 2,300) than the 2008 number they worked from (they say it was ~1,700). If that’s the case, there is a very misleading (if not downright erroneous) skew. Even groups doing very well online are now finding their “below benchmark” results unnecessarily discouraging. And that’s unfortunate.
Oops – I mean “median” … not “medium.”
Harry…thanks for the questions. I’m happy to clarify the analysis for you and other readers.
In general, the research work we do starts out with general trends and moves into more specific trends. As you might imagine, we get asked all the time for macro trends and also stats specific to certain areas of the nonprofit sector.
Blackbaud found that total online revenue grew 46% in 2009 compared to 2008. That is a basic trend comparison between the totals for both years. Not unlike reports from groups like Giving USA which publish trend information for a particular year compared to previous years. And just like with reports like Giving USA, the total number of nonprofits in the sample are changing. It helps to answer one simple question – did total online giving grow or shrink in a given year and by how much.
Another analysis we did was a strict year-over-year comparison between the same 1,703 nonprofits in 2008 and 2009 where we had complete transactional and verified data for both years. These nonprofits had a 21% year-over-year median growth rate in online revenue. The YOY trends, in particular by online revenue bands, are more appropriate for benchmarking purposes.
My perspective is that the YOY trend is a much more valuable and important piece of information. But as you might imagine, lots of people just want to know how much the entire fundraising channel is growing. The longitudinal data for total online giving is one way of showing this.
Thanks for your thoughtful response, and quick clarification. We are indeed quite interested in the macro trends too, so that top line number is quite helpful. I also note that it is on par with what Giving USA has reported in previous years for overall YOY growth of online giving. I’m quite curious about your methodology and ability to calculate it so early in the year, but we can trade emails about that. Again, this kind of data is always very help … thanks to you and Blackbaud.