According to Vinay Bhagat at Convio, online giving has grown from $250,000 in 1999 to more than $5 billion in 2006. So what do we know?

Target Analysis Group and DonorDigital have collaborated to produce an excellent study on online giving patterns. Importantly, this report looks at online giving in the context of ongoing direct mail programs, using multi-year actual data … a first as far as The Agitator has seen, making the report “must read.” In fact, if you run a direct marketing program for a nonprofit and you do not read it, you oughta be fired!

Direct mail and donor data was supplied by an impressive range of organizations — the Alzheimer's Association, Amnesty International USA, CARE, Covenant House, Defenders of Wildlife, Earthjustice, Humane Society of the US, Mercy Corps, National Multiple Sclerosis Society, National Parks & Conservation Assn, Union of Concerned Scientists, and US Fund for UNICEF. Another internet benchmarking group will be assembled in mid-2007. Be there or be square!

Key bottomlines for The Agitator:

• The internet is serving primarily as an acquisition medium — a median 56% of all online donors to these groups were new in 2006.
• Online-acquired donors have twice the three-year value of direct mail-acquired donors.
• The longer a direct mail donor has been giving to an organization, the less likely they will begin giving online.
• It remains to be seen how much the marketing tactics employed by different groups affects donors' online behavior — for example, the online renewal experience of these groups seems weak compared to others we've seen.

Guest Agitator Kristin McCurry of Mindset Direct gives us her take on the study:

Last week, Target Analysis Group released the findings of their first ever internet-focused donorCentrics collaborative group. This is available to us all, and is yet another example of their ongoing good citizenship in the sector – let’s hope they keep it up under their new Blackbaud ownership. Recently TAG convened a group of twelve organizations to share experiences and strategies and to discuss best practices in this rapid-fire area of fundraising.

Here’s the bottom line: These findings support what we as data-driven fundraisers already know – but this proves our point and is based on TAG’s large, diverse group of peers. The study essentially says that tried and true direct mail donors already on file do NOT tend to switch their giving to an online channel (see page 5 under Fig 2 and page 8 ‘Online Giving is not currently…’). They may do their research and check in on your organization’s results, but they are not using the channel to give. This was the case with members of this panel who, based on their size, undoubtedly have smooth-running machines to draw donors in online and process gifts. Where does this leave those of us in the sector who battle for a “donate now” button or worry we can’t handle a rush of giving online?

However, online donors – particularly those elusive episodic donors who come in on impulse during a disaster – will migrate to direct mail and other offline channels. So what is the right target for your organization? Is the web merely an acquisition source that requires offline follow-up and cultivation to provide lasting benefit?

Most of the organizations were big mailers and of course, this is a reflection of “what is” – current donors, current programs, current functionality on the web – not “what can be.” But the findings should be helpful for those of us trying to keep the expectations of leadership and over-exuberant boards in check.

To download the analysis with Helen Flannery and Rob Harris’s insightful overview, go to http://www.targetanalysis.com/.