The State of Online Fundraising

Member Appreciation Month
The State of Online Fundraising
Steve MacLaughlin, Director – Internet Solutions
November 4, 2009
Blog: www.blackbaud.com/connections
Twitter: smaclaughlin
© 2009 Blackbaud

Introduction
12+ years experience building successful online initiatives with Fortune 500 firms, government and educationalinstitutions, and nonprofit organizations across the world.
Frequent speaker at nonprofit conferences such as AFP, AHP, CASE, IoF, NAIS, DMFA, CAISAP, NTEN, etc.
Serves on the Board of Directors of NTEN
Contributing author in People to People Fundraising: Social Networking and Web 2.0 for Charities and working on a new book.
Read my blog at: www.blackbaud.com/connections
Follow me on Twitter: smaclaughlin

The Hidden Agenda
The Market is Noisy
Agenda
Online Giving Universe
Online Fundraising Growth
Online / Offline Giving Trends
Major Giving Trends
Event Fundraising Trends
Online Giving Benchmarks
Q & A

Commonly Used Terms
Sample Size
– Refers to the number of participants or items in an observation
– Ex: N = 2,207 n = 1,454
Average
– Refers to a single number that is meant to typify a list of numbers.
– Ex: 65, 61, 58, 58, 55, 55, 55, 50, 50, 35 | Average = 54.20
Median
– Refers to the middle number separating the higher half of a sample from the lower half.
– Ex: 200, 150, 150, 125, 110, 110, 100 | Median = 125

The Market is Noisy
What if I told you…
5% of all US giving in 2008 came from online channels.
Online fundraising revenue grew 44% in 2008.
33% of online donors switch to become offline donors, compared to just 3% of offline donors who switch.
Event fundraising emails have a 57% click-through rate.
Online giving is influenced by a lot of non-tech factors.

EventRegistrations
AmEx GivingExpress
MembershipForms
CampaignMicro Sites
Network for Good
Mission Fish
FacebookCauses
Donor Portal
Friends Asking Friends
DonationWidgets
DonationForms
Gift Catalogs
Employee GivingPortal
NonprofitCentral
Donor Focus Organization Focus
Internal Websites External Websites

Online FundraisingGrowth

2008 Total Fundraising (US)
$292.23 Billion Offline
$15.42 Billion Online
Source: Giving USA / Blackbaud

US Fundraising Trends
2001 2002 2003 2004 2005 2006 2007 2008 $246B $245B $243B $245B $283B $295B $314B $307B
Source: Giving USA

US Online Fundraising Trends
2001 2002 2003 2004 2005 2006 2007 2008 $550M $1.1B $1.9B $2.62B $4.5B $6.87B $10.7B $15.42B
44%
Growth
38%
Growth
72%
Growth
53%
Growth
56%
Growth
120%
Growth
100%
Growth
73%
Growth
Source: ePhilanthropy Foundation, Blackbaud

Source: Blackbaud
Online Fundraising Trends

Online / OfflineGiving Trends

2008 donorCentrics Internet Giving Collaborative Benchmarking Analysis
24 Large direct marketing organizations.
Amnesty International
CARE
Defenders of Wildlife
Doctors Without Borders
Earthjustice
Environmental Defense Fund
Mercy Corps
National Multiple Sclerosis Society
Save the Children
Sierra Club
Special Olympics
Self-selected group of participants with interest in online giving.
Aggregate of 9.5 million donors, $750 million in revenue for most recent 12 mos.
Direct marketing giving which is consists primarily of direct mail, with online, telemarketing, and other direct marketing sources included.
With few exceptions, no large scale event giving.
Gifts above $5,000 are excluded.

Online donors are much younger than traditional, primarily direct mail donors.
Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis, Target Analytics

Online donors have higher incomes than traditional, primarily direct mail donors.

Over the past several years, the internet has become an increasingly significant source of new donor acquisition.

Large numbers of online donors migrate away from online or email giving and to other sources, primarily direct mail. Direct mail donors rarely switch channels to become online donors.

Online is a good acquisition source but has poor long-term donor retention

Donors from multiple-channels have better loyalty and larger lifetime values

Major Giving Trends

Major Giving Trends
Blackbaud’s analysis of ~2,200 nonprofits from January through September 2009:
71% of these nonprofits had at least one gift of $1,000
41% of online gifts ≥$1,000 were within a gift range of $1,001 to $4,999
Median online gift amount ≥$1,000 was $2,500
Long Tail of Significant Online Gifts n = 1,429
Source: Blackbaud

Distribution of Online Gifts of at Least $1,000n = 1,429
Source: Blackbaud

Event FundraisingTrends

Event Fundraising Trends
Blackbaud’s analysis of ~31,200 events and $1.03 billion raised online:
16% of event fundraisers send emails
Average event fundraiser sends 23 emails
57% click-through rate on event fundraiser emails
25% of event fundraiser emails result in a transaction
Online participants raise six times that of offline participants
Blackbaud’s analysis of 370 events using Facebook and Twitter integration:
* Participants that have sent at least one message
* * Average of 120 Friends for Facebook & 70 Followers for Twitter
Source: Blackbaud

Year Over Year Performance
– Blackbaud’s analysis looked at 1,274 nonprofits to compare online fundraising results for the first 6 months of 2008 to the same period of 2009.
– These nonprofits had a 22.13% year-over-year growth in online revenue.
2008 Average Online Gift Benchmarks
Average Online Donation
$71.00
Average Blackbaud Online Donation
$152.12
Source:2009 eNonprofit Benchmarks Study / Blackbaud

How much should you be raising online?
In 2008, approximately 5% of all fundraising was done online.
In 2008, approximately 11% of revenue came from the Internet for Nonprofits in the 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis

Source: The Chronicle of Philanthropy

Online Percentage of Total Fundraising
< 1% 2% 3% 4% 5% 6% 7% 8% 9% > 10%
Under Performance< 1% to 3%
Average Performance3% to 7%
Exceptional Performance7% to > 10%
EXCEPTIONAL PERFORMERS
Traditional direct mail focus
Mature online giving programs
Higher online gift volume
Lower average gift amounts
Lower online donor retention
AVERAGE PERFORMERS
Mix of fundraising channels
Online giving is bigger focus
Moderate online gift volume
Moderate average gift amounts
New donor growth is from online
UNDER PERFORMERS
Traditional major gift focus
New to online giving programs
Lower online gift volume
Higher average gift amounts
Higher online donor retention

Source: The Chronicle of Philanthropy

The Market is Noisy
Closing Thoughts
Online giving isn’t just a fad – and it is still growing!
Multi-channel is the key to long-term donor retention.
Event fundraising has its own set of giving trends.
Goal setting and measuring your results is critical to success.
Look for more online giving insights in early 2009!

The Market is Noisy
Want to learn more? Be sure to check out….
My Blog
www.blackbaud.com/connections
Blackbaud Internet Resources
www.blackbaud.com/internetresources
NTEN
www.nten.org

Questions? Answers?
steve.maclaughlin@blackbaud.comwww.blackbaud.com/connections

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The State of Online Fundraising

by Steve MacLaughlin on Nov 04, 2009

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The State of Online Fundraising — Presentation Transcript