Do you really understand the difference between online and offline donors?

I sure hope so because there are lots of myths and tribal misinformation floating around out there. Without knowing which beliefs are true and which are false your organization could be shooting itself in the foot — online and off.

Steve MacLaughlin, Blackbaud’s VP of Data and Analytics, in a Huffington Post titled 3 Truths and 1 Lie about Online Donors, reviewed the online and offline giving habits of more than 6.5 million donors to 16 U.S. nonprofits in 2016.

He dissected both demographic and donation data for donors who: 1) only gave online; 2) donors who only gave off line; and 3) donors who made both online and offline gifts.

I recommend you read his entire post complete with charts, but here are Steve’s finding in a nutshell:

TRUTH:  Online Donors are Younger

“During 2016, 45% of donors giving only online were younger than 55 years old compared to just 21% of offline donors. By comparison, only 29% of online only donors were 65 or older while 58% of offline only donors are represented in these age brackets. Consider for a moment that according to Target Analytics, the average age of a U.S. donor in 2016 was 62 years old. What about Millennials? Approximately 14% of online only donors were Millennials compared to 6% of offline only donors in 2016. We also know from the data that donors giving online only gave more than their offline only counterparts at every age level.

“This is not to say that “older” donors don’t give online. This is a shadow belief among many nonprofits who believe their donors won’t make online donations. More than half of online donors are 55 years or older. 70% of donors that give online and offline are also 55 years or older. The good news from all of this is that online donors help to bring the average age of a nonprofit’s donor base down, but it can still be a very viable channel for older donors too.” [Emphasis added by The Agitator]

TRUTH:  Online Donors Have Higher Incomes

“The data analysis reveals that online only donors tend to have higher household incomes than offline only donors. Approximately 42% of online only donors had household incomes over $100,000 in 2016 compared to 28% of offline only donors. Once again, we need to take into consideration multichannel donors. 35% of donors with household incomes above $100,000 made online and offline donations in 2016. [Emphasis added by The Agitator]

“While it is true that online donors have higher incomes, it is important to distinguish income from assets. We know that a significant number of donors 65 years and older live on fixed incomes, but have higher asset levels than younger donors. This tends to skew income comparisons with older donors across giving channels. These older donors may have lower household incomes that influence giving from disposable income, but their assets play a larger role in planned and major giving.”

TRUTH: ONLINE DONORS ARE LESS LOYAL

“Online donors are younger, have higher incomes, but they are less loyal than offline only donors. (Two out of three isn’t bad.) First-year donor retention rates for online donors are significantly lower than those of offline only donors. Donors who were new in 2015 and made only offline gifts have higher first-year retention rates at every age group than online only donors. Even Millennials who gave offline only had dramatically higher first-year retention rate compared to their digital native counterparts. [Emphasis added by The Agitator]

“The sharp drop in first-year retention rates in online only donors is something Target Analytics has observed for more than a decade now. It’s a trend that often has more questions than answers. Are online only donors inherently less loyal or does it have more to do with the stewardship they receive compared to offline donors? Do fragmented online giving experiences result in lower retention rates? The visible difference in retention rates probably has more to do with nonprofits pretending online donors are different than offline donors in the first place. [Again, emphasis added by The Agitator]

LIE: ONLINE DONORS ARE BETTER THAN OFFLINE DONORS

And, please, please, please read and heed Steve’s conclusions and recommendations concerning this Lie. Once again, I’ve taken the liberty of boldfacing what I consider the essential points in Steve’s analysis:

“…nonprofits need to be careful not to confuse the channel of engagement with the channel of the transaction. Online versus offline is a false choice. The reality is that a successful donor engagement strategy involves both online and offline giving. The ideal donor is engaged through a multichannel approach.

“Nearly seven years ago, I wrote that “Single Channel Communication is Dead” and yet many nonprofits are still chasing online zombies. In 2010, first-year retention for multichannel donors was 51% compared to 30% for offline donors and 22% for online donors. Since then, the retention rate of multichannel donors has increased another 10%, while both online and offline have remained about the same. The best donors are those that give through both channels – not one or the other.

“The demographics of online donors are very encouraging, but the retention rates should give everyone in the nonprofit sector some pause. It’s an expensive and vicious cycle to acquire new online donors only to lose 70% to 80% of them in a year. A focus on donor engagement, stewardship, and retention should make use of multiple channels.

“It has been nearly 20 years since the first online gifts began flowing to nonprofit organizations. In that time, online giving has grown tremendously. But nonprofits also need to consider that less than 10% of all giving happens online. The transition from offline to online is likely to be more glacial than tidal. Giving on mobile devices is certainly accelerating this transition. Armed with the right data, nonprofits can make better decisions about both their online and offline donor engagement strategies.” [Agitator emphasis added.]

Agitator Comments and Questions

Because most organizations tend to operate with online activity in one silo, offline in another and donor service in still another, Steve’s analysis should prompt both substantial question-asking as well as some long-overdue structural reform when it comes to properly combining and coordinating a multi-channel approach to donors.

A few basic questions come immediately to mind:

• Do you know the retention rates of online, offline and those donors who give through both channels? And do you act on that information? If not, why not?
• Is there a coordinated stewardship/donor journey plan that cuts across and is applied to all channels?
• If your organization is one that believes the online channel is ‘inexpensive’ or ‘free’, and therefore online donors are carpet bombed with appeals, actions and assorted information independently of treatment given to offline donors, do you know how much damage — or how much improvement — this online activity is causing to retention rates and lifetime value?

If you can’t answer these questions, it’s time to get busy finding the answers before your organization wastes any more valuable time and money.

Roger