The ePhilanthropy Foundation estimates that total online giving in the United States reached approximately $6.87 Billion (USD), a 51% increase over 2005 estimates, driven by significant increases in online giving for both small and large organizations and the unprecedented use of the Internet by individuals for non-disaster and disaster support efforts. The United States represents slightly more than 50% of the world-wide giving online. Global giving is estimated to have surpassed $13.2 Billion (USD).
Chronicle of Philanthropy Article:
Online giving to the nation’s largest charities continued its steep ascent in 2006, according to a new survey by The Chronicle.
Electronic gifts to the 187 organizations that provided figures for 2005 and 2006 grew by 37 percent, from $880.7-million to $1.2-billion last year. Online gifts grew by more than 50 percent at 85 organizations. Of those, 34 saw Internet gifts more than double.
Donations to the individual groups grew by a median of 45 percent last year — meaning that half of the organizations had larger increases and half had smaller increases or declines.
“The organizations that are working it continue to bring in more and more money online every year,” says Nick Allen, chief executive officer of Donordigital, a consulting company in San Francisco. “Even for the organizations that aren’t doing that much, more people are online. More people have broadband. More people are used to using their credit cards online.”
The extraordinary sums of money donated online for relief efforts after the Indian Ocean tsunamis and Hurricanes Katrina and Rita had a mixed effect on this year’s survey.
On one hand, electronic contributions for Gulf Coast relief efforts accounted for $464.4-million of the $496.2-million the American Red Cross raised online in the 2006 fiscal year.
But at the same time, the Internet fund-raising totals for 38 organizations decreased in 2006. Many of those are charities that raised large sums of money for tsunami or hurricane relief in their 2005 fiscal years.
For example, online giving dropped nearly 60 percent at CARE. The Atlanta international-development group raised $5.4-million online in 2006, a drop from the $13.5-million it collected in 2005. But in 2005 it raised $10-million online after the Indian Ocean tsunamis, making a year-to-year comparison misleading.
Fifteen organizations raised $10-million or more online in 2006. Of those, four groups raised more than $40-million. In addition to the American Red Cross, United Way of America raised $240-million, the American Cancer Society took in $58-million, and the Leukemia & Lymphoma Society collected $45.1-million.
But despite the significant gains many charities have seen, Internet donations still account for a very small portion of overall giving.
Online giving represented less than 1 percent of total contributions for 103 of the 147 organizations that reported both the amount of money they raised online and their total contributions in 2006.
Only 13 charities collected more than 5 percent of their total contributions online. For five of those groups, electronic gifts made up more than 10 percent of total donations — Heifer International (21 percent), Leukemia & Lymphoma Society (20 percent), American Red Cross (15 percent), Mercy Corps (12 percent), and National Multiple Sclerosis Society (12 percent).
“I feel like we’re at the beginning of knowing what we’re doing” when it comes to online fund raising, says Mark Graham, director of electronic media at the American Friends Service Committee, in Philadelphia. “Maybe we’re all in our awkward adolescence where we’re not just happy with having a form up, but we’re still grasping at how to do this in a more mature way.”
Making sure that the postal appeals, e-mail newsletters, online solicitations, and magazine that the American Friends Service Committee sends its supporters all tell the same story has been an important goal for the aid and development charity.
For about two years, the organization’s staff members who focus on online appeals and the employees who produce direct-mail appeals have been holding joint planning meetings and have set up a calendar to map out when supporters would hear from the charity via e-mail and when by postal mail.
Without that cooperation, says Mr. Graham, the charity wouldn’t have been able to develop a campaign that combines both the Internet and direct mail — and has proven to be successful in gaining new donors.
The postal appeal was mailed in January in an envelope that unfolded to become a sign that reads “Friends for Peace.”
Both the sign and the appeal referred people to a Web site (http://www.friendsforpeace.org) on which they could create their own signs. So far, more than 800 people have posted photographs of themselves — and sometimes their children and pets — holding signs like “Beekeeper for Peace,” “Greyhound for Peace,” and “Numbercruncher for Peace.”
Of the 100,000 prospective donors who received the postal appeal in January, 1.5 percent made a gift. Mr. Graham says that figure is a significant increase over past solicitations designed to garner first gifts, which for the past five years drew donations from about 1 percent of recipients. The charity is so pleased with the results that it has since mailed the appeal to 400,000 more people.
Save the Children, in Westport, Conn., wants to make sure that its postal and electronic solicitations work together, and officials at the charity think that the best way to do that is to make sure its fund raisers work together.
In addition to setting individual revenue goals for direct-mail and online-giving campaigns, the organization set a goal to raise $390,000 through campaigns that combine the two types of solicitations.
As of the end of April — five months before the end of the charity’s fiscal year — the organization had raised $378,000 toward meeting the goal. Save the Children plans to increase the combined goal for next year.
“When you have collaboration and cooperation among departments, you usually get better results than when you have competition,” says Brian Sobelman, an associate vice president at the charity.
Incorporating the Internet into other types of fund-raising activities has proven successful for some nonprofit groups. The money that participants in fund-raising walks, bike-athons, and other events raise through personalized Web pages has fueled many charities’ online tallies.
Last year, people who ran a marathon, competed in a triathlon, or rode in a 100-mile bike race as part of the Leukemia & Lymphoma Society’s Team in Training program raised $110-million, more than $34-million of which came in online. In 2005, electronic gifts accounted for $18.5-million of the $94-million participants raised.
The ease and reach of the Internet is helping participants collect more and larger gifts, says Dwayne Howell, chief executive officer of the Leukemia & Lymphoma Society, in White Plains, N.Y.
Participants in the organization’s Light the Night walks, which take place in the fall, raised $4.3-million online in 2006, compared with $2.4-million in 2005. To encourage people to register and start raising money early, the charity offered participants gift cards they can use to buy gas as a reward for raising at least $250 via their Web sites during the month of August. The promotion was so successful that the organization will be making the same offer during both July and August this year.
Compassion International, in Colorado Springs, works with Christian radio stations to hold one- or two-day radiothons to encourage listeners to sponsor a poor child overseas through the charity. During the broadcasts, listeners are referred to both a toll-free telephone number and a customized Web site the charity has built for each station’s fund-raising event.
The number of child sponsorships — gifts of $32 a month — made through such Web sites has grown over the past three years. So far, listeners have started 4,554 sponsorships online during the charity’s 2007 fiscal year, which ends this month, up from 3,217 in 2006 and 2,003 in 2005.
The organization has also found that sending an e-mail message to donors who have not responded to a direct-mail appeal they recently received can elicit both online and offline gifts.
Tom Emmons, manager of Compassion International’s Internet marketing program, believes that online fund raising is most effective when it’s reinforced by another medium. Donors, he says, are wary of stand-alone e-mail appeals, because they wonder if the message really is from the organization that purports to be sending it. “E-mail that follows up a print campaign serves as a reminder, and then they can follow up offline or online as they choose,” says Mr. Emmons. “It adds a bit more credibility.”
As the tools that many large nonprofit organizations use to manage their e-mail marketing have improved, some groups are experimenting with sophisticated techniques to increase the amount of money they raise online.
The Humane Society of the United States, in Washington, has been able to divide the 900,000 people on its e-mail list into categories by the issues that are of greatest interest to them, such as the treatment of farm animals or ending horse slaughter in the United States.
The organization created the groups based on an analysis of which e-mail messages supporters open, which appeals prompt them to give, which missives they forward to others, and even which links they click in e-mail newsletters.
The data the organization has collected shows that its best advocates and donors are often part of more than one group, says Geoff Handy, vice president for media and online communications at the Humane Society. For example, he says, a supporter who responds to messages about animal fighting may also respond to those about mistreatment of horses.
In December, the Humane Society created four versions of an e-mail appeal it planned to send out — a general appeal plus versions that focused on the group’s work to combat horse slaughter, animal fighting, and seal hunting in Canada — to test whether donors would be more likely to give in response to an appeal that was tailored to their interests.
Each version of the appeal had the same basic design, and the same animal images along the top of the message. But the subject line, the photograph and text of an inset box, and the first few paragraphs of the appeal differed. For example, while the subject line for the general message read “Charging ahead for animals in 2007,” the one on the message about animal fighting read “Stopping animal fights and charging ahead for animals.”
More than 50,000 people fell into the group interested in pushing for tougher laws against animal fights. A little more than 40,000 received the appeal about animal fighting, while roughly 10,000 received the general message.
Of the people who received the issue-specific appeal, 2.8 percent clicked on a link in the e-mail message that took them to the Humane Society’s Web site, and 0.8 percent made a donation on the Web site — an increase over the 1 percent of the recipients of the general message who clicked through, and the 0.5 percent who made an online gift. The organization found similar, although slightly less pronounced, differences among the groups interested in the other topics.
“If you have a file of people who have a multiplicity of interests,” says Mr. Handy, “it makes sense to tailor your communication based on either their past behaviors or what they’ve told you they’re interested in.”
Investing in Online
As charities have increased the amount they raise online, some have decided to invest more time and money in their Internet appeals.
Donations at Ohio State University, in Columbus, jumped from $375,000 in 2005 to nearly $1.9-million in 2006. A big part of that jump — $1.2-million — was the result of a new online-donation option for the Buckeye Club, boosters of Ohio State’s athletic program. Even so, online gifts to the rest of the university nearly doubled.
That kind of growth has allowed the university’s development department to add two new full-time positions: a Web programmer and an Internet-marketing specialist.
But figuring out exactly how much money to invest in online fund raising is tricky, says Vivianne Potter, a top fund raiser at Amnesty International USA, in New York.
“With direct mail, we all know the formula,” says Ms. Potter. “You put this much money in, you get this many donors out.”
Fund raisers even have a pretty good idea of how much money those mail donors will give over the course of their relationship with the charity. But with online fund raising, she says, everyone is still feeling their way.
In 2006, Amnesty increased its investment and began working with a consulting company to help the organization become more systematic in its approach to Internet fund raising, says Ms. Potter.
With the consultants’ help, the organization has developed an automated system to send out membership renewal notices via e-mail at the same time similar notices go out in the mail, set up a long-term calendar for online communications, and plan campaigns that mix fund raising and advocacy.
Amnesty is currently working on an online campaign called The America I Believe In, to protest “extraordinary rendition,” in which the federal government turns over people it has detained for questioning — and possibly torture — to another country, and to call for the closure of the detention center at Guantánamo Bay. In January, the group ran a campaign that persuaded 20 donors to make online gifts of $1,344 each, the amount it cost to sponsor an advertisement in a Washington bus shelter for a month.
As four- and even five-figure online contributions become more common, a growing number of nonprofit organizations are thinking about ways to integrate e-mail and the Internet into their efforts to raise big gifts.
During the holiday season, 110 people who over the past year had made gifts totaling $1,000 or more to the Make-a-Wish Foundation, in Phoenix, received a special e-mail message about the organization’s Adopt-a-Wish program, which gives donors the opportunity to cover the full cost of granting a sick child’s wish. Several donors decided to pay for the cost of providing what the child asked for, and the solicitation brought in an additional $10,000 in unrestricted funds.
“We’re trying to be more targeted and figure out who we’re talking to, and talk to them appropriately,” says Andrea Glatzer, who heads the group’s online fund raising.
In November and December, online gifts of $5,000 to $50,000 each totaled $890,000 for the American Red Cross.
Whenever a contribution of $10,000 or more is made through the Red Cross’s Web site, the system automatically sends an e-mail alert to the organization’s major-gifts department, so that someone can thank the donor personally for the contribution. Over the next year, the Red Cross plans to research what kind of information major donors want to see online and then build a Web site geared to their interests.
The nonprofit world is just starting to wrestle with the question of what role the Internet should play in seeking large gifts, says Jeff Patrick, president of Common Knowledge, a consulting company in San Francisco.
“The original premise when all this started was, ‘Nobody’s ever going to give you $25,000 online,'” says Mr. Patrick. But now that an Internet gift of $25,000 isn’t all that unusual, he notes, “we’re all sort of looking around going, ‘Well, maybe that’s not so true.'”
Noelle Barton and Sam Kean contributed to this article.
Copyright © 2007 The Chronicle of Philanthropy