Are You Under- Or Over-Invested in Online Fundraising?
Two recent studies, one from Blackbaud and one from Merkle, put online fundraising’s share of giving in perspective. Merkle, looking at large nonprofits, gave online 15% of the direct response fundraising pie, while Blackbaud, looking more broadly at all charitable giving (with online giving from 5,000+ organizations), gave online fundraising 7.2% of the total charitable giving pie.
In the case of Blackbaud, their measurement showed online giving increased 7.9% in 2016 over the previous year, while overall giving grew about 1%. [Roger drew some warnings from the Blackbaud report here.]
As a reference point, three years ago, in 2013, a huge year for increased giving, Blackbaud, looking then at 4000+ nonprofits, reported that online grew 13.5% and overall giving grew 4.9%. And at that time online giving represented 6.4% of all charitable giving. Thus an increase in the pie from 6.4% to 7.2% between 2013 and 2016.
So clearly, the volume in giving is still coming overwhelmingly from traditional channels.
This led Jeff Brooks, in Online giving a big deal … but not THAT big, to caution “…you’d have to be nuts to walk away from traditional giving channels”.
Amen.
Yet, as I browse the fundraising ‘trades’ and blogs, it seems that online giving significantly ‘hogs’ the airtime and column inches.
And so when studies like these appear, I’m actually surprised that online isn’t capturing more of the pie by now. It make me wonder what attribution rules individual nonprofits are applying to their gifts — e.g., how is a gift attributed that is transacted online but stimulated by a direct mail piece? I suspect that nonprofits are applying a wide range of ‘business rules’ (or none) to categorize their donations.
Merkle’s 2017 Nonprofit Digital Benchmark Report is more focused, looking at online practices at 79 nonprofits with annual revenue of $10 million or more. On average, these large nonprofits devote 16.2% of their overall direct response budgets to online fundraising, and 7.5 employees to run their online program.
How does this online vs. traditional balance play out in your nonprofit in terms of dollars, staff time and mind share invested?
Clearly you must master the online channel, but are you over-enthused in your commitment to online fundraising … in danger of being ‘nuts’, as Jeff would put it, and neglecting traditional channels?
Tom
P.S. While granting that it looked at a select sample of larger nonprofits, the Merkle report nevertheless contains some useful stats that you might want to compare to your own organization. For example, 43% of their website visitors came from a mobile device, 2.5% of website visitors went on to make a donation on the site and, for these organisations, the average annual value of an email subscriber was $7.71.
7 responses to “Are You Under- Or Over-Invested in Online Fundraising?”
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Shiny objects are still attractive to so many people…
Thanks for bringing the voice of reality and logic back to the forefront Tom!
Hopefully budget percentages will speak louder than hype.
So well said, Jeff, Tom, and Jay. In Basics & More, we work hard at delivering trainings that develop a balanced plan – pretty much a focused “rinse-and-repeat” system for fundraising success. But yes, the bright shiny object syndrome persists!
Just because people may contribute via check or through an event or be direct mail responsive, doesn’t mean they weren’t influenced by things they saw and read online. In fact, it’s likely that they were. So to your point about attribution — if someone watched a video of yours and later mails a check, who gets the credit? The check. So I think this creates a bit of a false narrative about online vs. tradition, when the right answer is (mostly) online supporting traditional.
Ok, so Blackbaud finds that online giving only make up 7.2% of the overall pie of giving.
This of course, measures gross revenue dollars, not the number of gifts.
So let’s look at this more closely: Most major gifts are not made online – they come in the form of stock, checks, family foundation grants – none via the online channel.
To my mind, the reason online giving seems so low, is that the larger revenue sources of major gifts, government and foundation grants, large event sponsorships – all do not flow into the online channel.
If you took a look at the smaller gifts, say under $1k, you might find that the online portal is the channel of preference for these gifts. I’ve been asking Steve MacLaughlin to look at this because it might provide some interesting data about growing that donor base.
Also, I’d make the case that monthly gifts are often coming into the online portal, if they are not switched to direct bank draft.
So an organization that wants to grow monthly giving and build up a sustainable base of smaller donors WOULD want to focus on the online portal.
Thoughts Roger and Tom? And Jay and Pam?
Oh most definitely, Gail. Our focus from the beginning has been monthly giving, making your online giving as donor-focused and easy as humanly possible, and having solid first-time donor protocols in place. So many major gift programs ignore these processes. What kinds of systems does it take to turn a $20 first-time online donor into a monthly donor, mid-level donor, major donor, legacy donor?
I’ll take gifts no matter what their media source!
I’ve known clients to process gifts that come in the mail via credit card by entering them on their websites. Voila – more online gifts.
When mail appeals drop, there is almost always a bump in online giving.
Average gift size online tends to be larger – (I think it’s those pesky Amazon buyers who are used to getting free shipping with higher purchases).
Open rates on emails seems to be dropping precipitously. Perhaps there should now be a box that says “send me less email”.
So while I celebrate online giving, and encourage all my clients to promote it – I’m not giving up on mail.
Hi, a few thoughts: 1. Direct mail still responds at 600% higher rates than online, (DMA 2015 study), so it’s NOT dead if we see that the bulk of donations come in that way. But DM is directing donors to give online if it’s easier for them. it’s the DM piece that triggers them to go there though. Just think, why are your favorite fundraising conferences still sending you post cards?
2. You can absolutely start generating monthly donors online as that’s the easiest way for them to join. And the more you ask, the more you’ll generate. But those organizations that are really committed to growing their monthly donor base are using a mix of online, direct mail, telemarketing and add other channels as they grow.
Unfortunately, as fundraisers, we have to do it all as the donors we’re trying to acquire, keep, convert are so multi-channel now. The basic workhorse is still direct mail, so let’s not forego that for a long while…
We as fundraising consultants have to help our clients understand the metrics and help them keep the eye on the ball, trying to prevent them from being distracted by the next shiny new thing that’s not doing the donors any favors and is not (yet) raising the money they need to support their mission.