Have you ever analyzed your nonprofit organization's online donor list and wondered why many of the people listed aren’t recurring online donors? Your organization is not alone. According to the donorCentric study published by Target Analytics, which gathered data from 25 large nonprofit organizations ranging from CARE to Amnesty International, many nonprofits have mastered raising money from Direct Mail campaigns, but haven’t quite figured out how to replicate their fundraising success online. Interesting key findings based on research and information from over 9.5 million donors include:
- Online giving continues to grow rapidly even in the absence of major disasters, which fueled the growth of online giving for relief and animal welfare organizations in 2005-2006. For example, 12 of the groups in the study had a median increase in online donors of 39% from 2007 to 2008, while their offline donors decreased a median -3% over the same period.
- Direct Mail donors -- who are the primary giving source for most organizations -- rarely give online. When mail donors do give online, they tend to give higher average gifts.
- Direct Mail response rates continue to decline. 12 of the groups had a median increase in online donors of 315% over the past five years, while offline donors declined a median -6% over the same period.
- Online donations make up a significant portion of new donors and revenue. In 2008 they accounted for a median 16% of all new donors and a median 27% of all new revenue.
- Online donors have slightly lower retention rates overall than traditional donors.
- Those offline donors for whom a nonprofit also has email addresses on file tend to donate more than those offline donors for whom the nonprofit lacks an email address.
So what is the disconnect between online and offline donors? What can be done to cultivate these online donors who skew younger, have higher incomes and give larger gifts ranging from $27 to $45 higher than gifts given by offline donors?
It seems clear that nonprofits need to work much harder to cultivate first-time online donors right off the bat. Cultivating them takes time and requires testing different approaches to identify what motivates your organization’s online donors. For example, every organization should tag each new online donor with the issue or campaign to which they contributed. Then continue to follow up with these donors regularly, but at least initially you should use content focused mainly on the cause to which they donated, since this is the issue that hooked them in the first place.
Remember, online fundraising really only started to take off in 2005 in response to natural disasters like the Asian tsunami and Hurricane Katrina, so it’s not a well-oiled machine yet. That’s why constant testing is important.
While testing is critical to successfully retaining and sustaining online donors, INTEGRATION of offline and online fundraising is key to maximizing your nonprofit’s fundraising program. Clint O’Brien, who leads Care2’s nonprofit services team, says many of Care2’s most successful nonprofit clients understand that a multi-channel strategy – which may even include telemarketing in addition to Direct Mail and email – is the undisputed way to maximize donations. Nevertheless, most newer nonprofits – as well as more established organizations that for whatever reason never used Direct Mail in the past – often declare that they have no plan to start using Direct Mail or telemarketing now, and are instead placing all of their emphasis on online donor acquisition and cultivation. “It’s as if the new breed of nonprofits see Direct Mail as outmoded and not worth even learning how to use,” says O’Brien. “Instead they want to master email and search engine marketing and the other online tools -- because that’s where everything seems to be going.”
If your nonprofit is pursuing an integrated, multi-channel strategy, then consider giving donors multiple options to donate on the same campaign. If your organization is about to send out a Direct Mail piece, send out an online fundraising appeal on the same issue a few days before the mail piece arrives and a few days after it has been delivered. The more channels you use to ask for money, the more money you will raise. Also, make sure you include an online giving option on all Direct Mail. It’s also a good technique to acquire offline donors’ email addresses, which is another important strategy to build your organization’s online fundraising program. In some cases, it might even make sense to offer a “premium” (gift) as en enticement to acquire these donors’ email addresses.
Demographics play another important role, long-term. Baby Boomer donors who are between the ages of 45-63 and web savvy tend to donate more through Direct Mail. Younger demographics tend to donate more online. However, as the Baby Boomer generation begins to retire and live on a fixed income, (even less of a fixed income then they anticipated due to the stock market crash), nonprofits will need to continue to raise money from younger donors who do most of their business, correspondence, finances, and charitable giving online. This is why developing a strong online fundraising program now is the key to every nonprofit’s fundraising success in the future.
Nick Allen of Donor Digital agrees. "Online seems to work best for the younger donors, and that’s going to be key to the future as direct mail continues its slow decline as a fundraising tool. Because so many of us are paying our bills online -- and never get a personal letter in the mail -- we pay less and less attention to the mail.
It's also important to note that "the under-45s give in response to an “urgent appeal which is different then donors from our parents generation who give to organizations like Amnesty Internation because they believe in the organization’s mission – they don’t care what its exact program is now. That means we need to create a different kind of relationship for these two distinct donor groups," said Allen.
What are your thoughts on the donorCentric study? Which strategies do you think that nonprofits should consider for their fundraising programs?