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Much of the online fundraising growth has come from new, younger donors. Online donors are typically 15 years younger than direct-mail donors. In addition, usable e-mail files grew 32 percent in the same period, showing that nonprofits are successfully developing online prospect lists for future supporters. A first-of-its-kind national survey conducted for Convio by JupiterResearch, a Forrester Research company, shows that of the 175.6 million online adults (age 18+) in the U.S., more than half (51 percent) plan to donate to charities during the upcoming holiday season.
If there is a silver lining in the economic cloud, it is that consumers and nonprofits are aligning around the online channel. Given its growth, it is imperative that nonprofits invest appropriately in the online channel to realize its full potential. In fact, according to the Direct Marketing Association, nonprofits are on average growing their online marketing spend four times faster than their direct-mail and telemarketing spend.
Power to the people
Today, constituents are taking a more active role in their philanthropy. Many want to see the direct impact of their giving, others are eager to participate in a movement. Increasingly, people are donating because of being asked to do so by their friends or family versus a nonprofit organization itself. The Internet has accelerated these trends, which represent a shift of power to the constituent.
A majority of prospective donors will visit a charity’s Web site to learn more before making an initial contribution. A growing number of people will research charities on sites like Charity Navigator or GuideStar before giving. Direct-to-beneficiary giving portals, such as Kiva and DonorsChoose, which give donors unprecedented control over where they direct their gifts, have grown exponentially. At Kiva, a donor can make a microloan directly to a specific person in a developing country. At DonorsChoose, donors can support a specific funding need posted by a public school teacher.
The integrated effect
The value of online marketing should not be measured solely by money raised online. There is increasing proof that online marketing attracts new donors and influences existing offline donors to give more. At the 2007 Convio Client Summit, Jeff Regen, vice president of online marketing and communications at Defenders of Wildlife, shared how the organization uses online advocacy as a way to attract new constituents, and subsequently deploys a multichannel approach using e-mail, direct mail and telemarketing to convert non-donor activists to donors. The cohort of new non-donor activists recruited between January and March 2006 contributed more than $90,000 within 16 months after being exposed to a multichannel fundraising effort. About 78 percent of the donations were ultimately yielded online.
In addition to being a source for new donors and a feeder channel for direct-mail and telemarketing acquisition efforts, online marketing also enhances donor loyalty. Convio’s joint study with the analytics firm StrategicOne in 2006 demonstrated that online engagement enhances the lifetime value of a direct-mail donor through growing both gift frequency and donor retention rates.
Online marketing is emerging as a strong source for new major-donor prospects as well. Defenders of Wildlife has found that about one-third of all new major donors are sourced through their online marketing efforts. The Wired Wealthy research that Convio conducted with Sea Change Strategies and Edge Research confirms that mid-level and major donors are increasingly wired, and online communications can help augment and enhance less frequent personal contact.
Now is the time
Current economic conditions indicate that competition for donors will intensify. Economically sourcing new prospects, converting them to donors and maximizing their lifetime value is more important than ever. Savvy nonprofits will make the strategic changes and investments required to succeed online, to align to a world where power has shifted to donors and to implement multichannel marketing strategies. Money raised online can now more than justify the start-up costs of online marketing efforts, and is a fraction of the true value created by effectively integrating online marketing with direct-mail and major-donor development efforts.
Vinay Bhagat is founder and chief strategy officer at Convio. This article is excerpted from the article, “Strengthening Your Online Presence: Now is the Time” that originally appeared in the November/December 2008 edition of the Convio Connection newsletter.
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