Total Giving Down; Online Up
According to Giving USA, total giving to US charities declined 5.7% in real terms in 2008 compared to 2007, the first decline in real terms since 1987.
Total giving in 2008 amounted to $307.65 billion, with these components (all declines inflation-adjusted):
- Individuals — $229.3 billion, down 6.3%
- Foundations — $41.2 billion, down 0.8%
- Bequests — $22.7 billion, down 6.4%
- Corporations — $14.5 billion, down 8%
Steve MacLaughlin at Blackbaud analyzed this and other data to conclude that online giving rose to a total of $15.4 billion in 2008, an increase of 44% over 2007. That means online gifts accounted for just over 5% of total 2008 giving (or about 6.7% of individual giving).
Further, he reports that, for Blackbaud clients, online giving in Q1 2009 has risen 68% over the same period in 2008.
I guess that’s good news if you’re an online fundraiser (or consultant). But with the total giving pie down, some of the steam is taken out of that good news. For, with a declining total pie, one must conclude that a lot of online fundraising is simply cannibalizing other channels. No?
Tom
P.S. This modeled Giving USA data mirrors findings from a Target Analytics study earlier this year, based on actual file analysis of 75 national nonprofit direct mailers, that found a decline in individual giving of 3.3% (which compares to Giving USA’s non-adjusted-for-inflation decline of 2.7%).
7 responses to “Total Giving Down; Online Up”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
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Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
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Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
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There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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Steve often provides “data” but no substantiation or support. Does that growth in their customer base include dollars from orgs that were not using them last year? If you had one organization raise $100 last year and add a new customer and together they raise $168, you have an increase even though real dollars could be down. Just two months ago Blackbaud was quoted in a Forbes article saying “online fundraising hauled in $3 billion…over the last seven years…” The point is, let’s focus on credible data with substantiation.
Tom-
Agreed, online seems to be cannibalizing other channels for some organizations. It’s interesting that other reports seem to indicate that new online donors convert to giving via direct mail. So it’s a connundrum. The challenge for our clients is securing email addresses. Traditional donors seem reluctant, and acquisition is difficult in the online channel for charities without broad appeal and media exposure. As you say, it’s good news if you are working in the online arena, but troubling if you are responsible for the whole pie.
I find Steve MacLaughlin’s conclusion of online giving silly unless that he can demonstrate that online giving has actually increased or has there been a shift in method of payment. Since Steve is someone that sells online transaction tools I would expect more disclosure of actual data to reach a conclusion that benefits the sale of his products.
Where is the beef?
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I believe Paul’s perspective is very smart. Why didn’t Steve tell us if the data included nonprofits that added online giving options?
I attended a recent cause marketing conference where many of the online giving sales folks were attempting to promote their tools. When asked if they could provide relevant peer specific data on results of implementing more robust online giving via social media tools, most only answered -“its where the donor is going now and in the future”. Most of my peers are not seeing meaningful, incremental growth in this area. I believe that it is a long-term bet which we must continue exploring and exchanging best practices openly.
Data is plural (datum is the singular). “These data”…; not “this data.”