What 1.9 Million Donors Can Tell Us About Fundraising on the Web: A Cliff N…

I may have sent this along before (as a full report) but this Cliff Notes version is a good summary.

Sent to you by Steve Sherlock via Google Reader:

via NTEN by Brett on 1/4/11

Katya Andresen, COO, Network for Good
If you love data, you’re in for a treat.
Network for Good and TrueSense Marketing recently went mining through $381 million in donations through our platform. We looked at:

  • 3.6 million gifts
  • 1.879 million unique donors
  • 66,470 different nonprofits
  • Seven-year time span (2003-2009)
  • Donations from a wide range of nonprofit sizes and types

About the Study
The purpose of this data mining wasn’t to create another study about the rapid growth of online giving (though it is skyrocketing). We aimed instead to look at the online giving experience across the Web at a time when there are more and more ways to give, and how that experience influences giving. We were interested in:

  • How much and how often donor s gave
  • How many donors were gained and lost
  • Where donors were in the long-term donor lifecycle
  • How donors behaved in different online venues: social networks, giving portals, and charity websites.

Before I Iaunch into all the things we learned, some caveats. First, the data set for this study is limited to donations powered by the Network for Good platform. Any giving that took place on sites that do not use the Network for Good platform or that were made offline are not included. Also, the data do not differentiate what nonprofits are doing to affect donor behavior beyond the giving transaction. Some do a great job connecting with and engaging donors in many ways and through many channels, while others are doing little. What they do and don’t do has a big impact on donor relationships and the metrics we’ve uncovered.
Network for Good processes donations for charities of all sizes, but because we focus our efforts on helping small- to medium-sized nonprofits with their fundraising, there is a strong representation of these nonprofits in our data. There is also a wide range of organizational types.
The Big Finding: Relationships Matter!
When we talk tech, we tend to focus on the latest new bell, whistle, or widget for fundraising. But raising funds online is not about technology, any more than raising funds through the mail is about paper. It’s about the relationship between the nonprofit and the donor who wants to support a cause. People who give online are no different from other donors in that they expect a relationship — not simply a transaction — with the organization they support.
We found the following:

  • Fundraising is still about relationships. Just as the strength of the donor-charity relationship heavily influences offline giving, the online giving experience has a significant impact on donor loyalty, retention, and gift levels. The more intimate and emotionally coherent the giving experience, the stronger the relationship between donor and nonprofit appears to be. Small improvements to the online experience can make a big difference in donations. For example, the loyalty factor for donors acquired through generic giving pages is 66.7% lower than for donors who give via charity-branded giving pages.
  • Giving on social networks is significant, but donor loyalty is highest on charity websites that build strong connections with donors. Analysis of cumulative online giving (i.e., giving added up over time) via different pages powered by Network for Good shows that donors who gave via charity websites started at the highest level and gave the most over time. Those who used giving portals started lower and gave less over time. Those who used social giving opportunities gave the least initially and added little afterward.
  • But… Nonprofits should not conclude that giving portals and social networking charity sites are a bad thing. They are a valuable service to donors, and they’re proliferating. They likely funnel gifts to organizations that wouldn’t have received them otherwise. They also probably serve as an “entryway” or “on-ramp” for people who are new to charitable giving or your cause. So keep your organization’s profile up to date (contact info, mission, etc.) so you look good on your portal and social networking listings. When you thank these donors, don’t assume they know much about your organization. Work hard to win them over.

Additional Findings

  • Recurring giving is a major driver of giving over time and should be strongly encouraged in the giving experience. Always offer a recurring gift option on your giving page. Monthly giving is the most popular choice, so make that one the easiest for donors to do. And present a compelling reason to give monthly, whether it’s a greater impact or convenience.
  • Online giving spikes during the month of December and large-scale disasters. During disasters, donors are more likely to consider new giving options, while in December, they’re more likely to give based on relationships with the charities.
  • Giving portals open up important opportunities for small charities during disaster. The Red Cross typically dominates disaster giving. It reportedly received about 80% of all giving post-Katrina. But, the balance is shifting away from the big players. When presented with alternative organizations on portals, donors respond: On portals powered by Network for Good, more than half the post-Katrina funds went to the smaller charities that were featured. Donors appeared open to recommendations on effective, previously unknown charities that were worth supporting.
  • A third of all online giving occurs in December, and 22% of annual giving happens in the last two days of the year. Online giving (by dollars) on December 31 is concentrated between 10 a.m. and 6 p.m. in each time zone. Nonprofits should send appeals the morning of the last day of the year!
  • Online giving happens largely between 9 a.m. and 5 p.m. on weekdays. People give during work hours. There’s even a drop in giving during the noon hour. Most giving comes from the East and West coasts. (We thought this was fun to share, but the takeaway shouldn’t be to email people Tuesdays at 10 am on the East Coast.)

Online Giving Is Growing Up
Dropping Gifts
As noted already, the main finding of the study was that just as relationships matter in offline giving, they do online as well. In addition we found the gap between offline and online donor behavior is closing. Online giving is no longer the domain of wealthy early adopters – it’s more and more mainstream. And that bodes well for those of us excited about its potential.
Happy online fundraising!
Download the study for free, discuss the findings and access the charts at www.onlinegivingstudy.org
Katya Andresen is COO, Network for Good, blogs at www.nonprofitmarketingblog.com and tweets @KatyaN4G.

Things you can do from here: