The State of Online Fundraising

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The State of Online Fundraising reviews research done around online/offline donors, trends around gift sizes and patterns, the growth of larger online gifts, benchmarks for your online giving programs, and more. You will gain valuable insights about online giving from across many nonprofit organizations. Presented by Steve MacLaughlin, Director - Internet Solutions, Blackbaud

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The State of Online Fundraising

  1. 1. Member Appreciation Month<br />The State of Online Fundraising<br />Steve MacLaughlin, Director – Internet Solutions<br />November 4, 2009<br />Blog: www.blackbaud.com/connections<br />Twitter: smaclaughlin<br />© 2009 Blackbaud<br />
  2. 2. Introduction<br />12+ years experience building successful online initiatives with Fortune 500 firms, government and educationalinstitutions, and nonprofit organizations across the world.<br />Frequent speaker at nonprofit conferences such as AFP, AHP, CASE, IoF, NAIS, DMFA, CAISAP, NTEN, etc.<br />Serves on the Board of Directors of NTEN<br />Contributing author in People to People Fundraising: Social Networking and Web 2.0 for Charities and working on a new book.<br />Read my blog at: www.blackbaud.com/connections<br />Follow me on Twitter: smaclaughlin<br />
  3. 3. The Hidden Agenda<br />The Market is Noisy<br />Agenda<br />Online Giving Universe<br />Online Fundraising Growth<br />Online / Offline Giving Trends<br />Major Giving Trends<br />Event Fundraising Trends<br />Online Giving Benchmarks<br />Q & A<br />
  4. 4. Commonly Used Terms<br /><ul><li>Sample Size</li></ul>– Refers to the number of participants or items in an observation<br />– Ex: N = 2,207 n = 1,454<br /><ul><li>Average</li></ul>– Refers to a single number that is meant to typify a list of numbers.<br />– Ex: 65, 61, 58, 58, 55, 55, 55, 50, 50, 35 | Average = 54.20<br /><ul><li>Median</li></ul>– Refers to the middle number separating the higher half of a sample from the lower half.<br />– Ex: 200, 150, 150, 125, 110, 110, 100 | Median = 125<br />
  5. 5. Online Giving Universe<br />
  6. 6. The Market is Noisy<br />What if I told you…<br />5% of all US giving in 2008 came from online channels.<br />Online fundraising revenue grew 44% in 2008.<br />33% of online donors switch to become offline donors, compared to just 3% of offline donors who switch.<br />Event fundraising emails have a 57% click-through rate.<br />Online giving is influenced by a lot of non-tech factors.<br />
  7. 7. Online Giving Universe<br />EventRegistrations<br />AmEx GivingExpress<br />MembershipForms<br />CampaignMicro Sites<br />Network for Good<br />Mission Fish<br />FacebookCauses<br />Donor Portal<br />Friends Asking Friends<br />DonationWidgets<br />DonationForms<br />Gift Catalogs<br />Employee GivingPortal<br />NonprofitCentral<br />Donor Focus Organization Focus<br />Internal Websites External Websites<br />
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  16. 16. Online FundraisingGrowth<br />
  17. 17. 2008 Total Fundraising (US)<br />$292.23 Billion Offline<br />$15.42 Billion Online<br />Source: Giving USA / Blackbaud<br />
  18. 18. US Fundraising Trends<br />2001 2002 2003 2004 2005 2006 2007 2008 $246B $245B $243B $245B $283B $295B $314B $307B<br />Source: Giving USA<br />
  19. 19. US Online Fundraising Trends<br />2001 2002 2003 2004 2005 2006 2007 2008 $550M $1.1B $1.9B $2.62B $4.5B $6.87B $10.7B $15.42B<br />44% <br />Growth<br />38% <br />Growth<br />72% <br />Growth<br />53% <br />Growth<br />56% <br />Growth<br />120% <br />Growth<br />100% <br />Growth<br />73% <br />Growth<br />Source: ePhilanthropy Foundation, Blackbaud<br />
  20. 20. Source: Blackbaud<br />Online Fundraising Trends<br />
  21. 21. Online / OfflineGiving Trends<br />
  22. 22. 2008 donorCentrics Internet Giving Collaborative Benchmarking Analysis<br />24 Large direct marketing organizations.<br />Amnesty International<br />CARE<br />Defenders of Wildlife<br />Doctors Without Borders<br />Earthjustice<br />Environmental Defense Fund<br />Mercy Corps<br />National Multiple Sclerosis Society<br />Save the Children<br />Sierra Club<br />Special Olympics<br />Self-selected group of participants with interest in online giving.<br />Aggregate of 9.5 million donors, $750 million in revenue for most recent 12 mos.<br />Direct marketing giving which is consists primarily of direct mail, with online, telemarketing, and other direct marketing sources included.<br />With few exceptions, no large scale event giving.<br />Gifts above $5,000 are excluded.<br />
  23. 23. Online donors are much younger than traditional, primarily direct mail donors.<br />Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis, Target Analytics<br />
  24. 24. Online donors have higher incomes than traditional, primarily direct mail donors.<br />Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis, Target Analytics<br />
  25. 25. Over the past several years, the internet has become an increasingly significant source of new donor acquisition.<br />Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis, Target Analytics<br />
  26. 26. 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.<br />Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis, Target Analytics<br />
  27. 27. Online is a good acquisition source but has poor long-term donor retention<br />Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis, Target Analytics<br />
  28. 28. Donors from multiple-channels have better loyalty and larger lifetime values<br />Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis, Target Analytics<br />
  29. 29. Major Giving Trends<br />
  30. 30. Major Giving Trends<br />Blackbaud’s analysis of ~2,200 nonprofits from January through September 2009:<br /><ul><li>71% of these nonprofits had at least one gift of $1,000
  31. 31. 41% of online gifts ≥$1,000 were within a gift range of $1,001 to $4,999
  32. 32. Median online gift amount ≥$1,000 was $2,500</li></ul>Long Tail of Significant Online Gifts n = 1,429<br />Source: Blackbaud<br />
  33. 33. Distribution of Online Gifts of at Least $1,000n = 1,429<br />Source: Blackbaud<br />
  34. 34. Event FundraisingTrends<br />
  35. 35. Event Fundraising Trends<br />Blackbaud’s analysis of ~31,200 events and $1.03 billion raised online:<br /><ul><li>16% of event fundraisers send emails
  36. 36. Average event fundraiser sends 23 emails
  37. 37. 57% click-through rate on event fundraiser emails
  38. 38. 25% of event fundraiser emails result in a transaction
  39. 39. Online participants raise six times that of offline participants</li></ul>Blackbaud’s analysis of 370 events using Facebook and Twitter integration:<br />* Participants that have sent at least one message<br />* * Average of 120 Friends for Facebook & 70 Followers for Twitter<br />Source: Blackbaud<br />
  40. 40. Online Giving Benchmarks<br />
  41. 41. Online Giving Benchmarks<br /><ul><li>Year Over Year Performance</li></ul>– 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.<br />– These nonprofits had a 22.13% year-over-year growth in online revenue. <br />2008 Average Online Gift Benchmarks<br />Average Online Donation<br />$71.00<br />Average Blackbaud Online Donation<br />$152.12<br />Source:2009 eNonprofit Benchmarks Study / Blackbaud<br />
  42. 42. How much should you be raising online?<br /><ul><li>In 2008, approximately 5% of all fundraising was done online.
  43. 43. In 2008, approximately 11% of revenue came from the Internet for Nonprofits in the 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis</li></li></ul><li>Online Giving Benchmarks<br />Source: The Chronicle of Philanthropy<br />
  44. 44. Online Percentage of Total Fundraising<br />&lt; 1% 2% 3% 4% 5% 6% 7% 8% 9% &gt; 10% <br />Under Performance&lt; 1% to 3%<br />Average Performance3% to 7%<br />Exceptional Performance7% to &gt; 10%<br />EXCEPTIONAL PERFORMERS<br /><ul><li> Traditional direct mail focus
  45. 45. Mature online giving programs
  46. 46. Higher online gift volume
  47. 47. Lower average gift amounts
  48. 48. Lower online donor retention</li></ul>AVERAGE PERFORMERS<br /><ul><li> Mix of fundraising channels
  49. 49. Online giving is bigger focus
  50. 50. Moderate online gift volume
  51. 51. Moderate average gift amounts
  52. 52. New donor growth is from online</li></ul>UNDER PERFORMERS<br /><ul><li> Traditional major gift focus
  53. 53. New to online giving programs
  54. 54. Lower online gift volume
  55. 55. Higher average gift amounts
  56. 56. Higher online donor retention</li></li></ul><li>Source: The Chronicle of Philanthropy<br />
  57. 57. Source: The Chronicle of Philanthropy<br />
  58. 58. Source: The Chronicle of Philanthropy<br />
  59. 59. The Market is Noisy<br />Closing Thoughts<br />Online giving isn’t just a fad – and it is still growing!<br />Multi-channel is the key to long-term donor retention.<br />Event fundraising has its own set of giving trends.<br />Goal setting and measuring your results is critical to success.<br />Look for more online giving insights in early 2009!<br />
  60. 60. The Market is Noisy<br />Want to learn more? Be sure to check out….<br />My Blog<br />www.blackbaud.com/connections<br />Blackbaud Internet Resources<br />www.blackbaud.com/internetresources<br />NTEN<br />www.nten.org<br />
  61. 61. Questions? Answers?<br />steve.maclaughlin@blackbaud.comwww.blackbaud.com/connections<br />

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