Member Appreciation MonthThe State of Online FundraisingSteve MacLaughlin, Director – Internet SolutionsNovember 4, 2009Blog: www.blackbaud.com/connectionsTwitter: smaclaughlin© 2009 Blackbaud

Introduction12+ 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 NTENContributing 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/connectionsFollow me on Twitter: smaclaughlin

The Hidden AgendaThe Market is NoisyAgendaOnline Giving UniverseOnline Fundraising GrowthOnline / Offline Giving TrendsMajor Giving TrendsEvent Fundraising TrendsOnline Giving BenchmarksQ & A

Commonly Used TermsSample Size– Refers to the number of participants or items in an observation– Ex: N = 2,207 n = 1,454Average– 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 = 54.20Median– 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

Sample Size

Average

Median

Online Giving Universe

The Market is NoisyWhat 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.

Online Giving UniverseEventRegistrationsAmEx GivingExpressMembershipFormsCampaignMicro SitesNetwork for GoodMission FishFacebookCausesDonor PortalFriends Asking FriendsDonationWidgetsDonationFormsGift CatalogsEmployee GivingPortalNonprofitCentralDonor Focus Organization FocusInternal Websites External Websites

Online FundraisingGrowth

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

US Fundraising Trends2001 2002 2003 2004 2005 2006 2007 2008 $246B $245B $243B $245B $283B $295B $314B $307BSource: Giving USA

US Online Fundraising Trends2001 2002 2003 2004 2005 2006 2007 2008 $550M $1.1B $1.9B $2.62B $4.5B $6.87B $10.7B $15.42B44% Growth38% Growth72% Growth53% Growth56% Growth120% Growth100% Growth73% GrowthSource: ePhilanthropy Foundation, Blackbaud

Source: BlackbaudOnline Fundraising Trends

Online / OfflineGiving Trends

2008 donorCentrics Internet Giving Collaborative Benchmarking Analysis24 Large direct marketing organizations.Amnesty InternationalCAREDefenders of WildlifeDoctors Without BordersEarthjusticeEnvironmental Defense FundMercy CorpsNational Multiple Sclerosis SocietySave the ChildrenSierra ClubSpecial OlympicsSelf-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.Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis, Target Analytics

Over the past several years, the internet has become an increasingly significant source of new donor acquisition.Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis, Target Analytics

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.Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis, Target Analytics

Online is a good acquisition source but has poor long-term donor retentionSource: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis, Target Analytics

Donors from multiple-channels have better loyalty and larger lifetime valuesSource: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis, Target Analytics

Major Giving Trends

Major Giving TrendsBlackbaud’s analysis of ~2,200 nonprofits from January through September 2009:71% of these nonprofits had at least one gift of $1,00041% of online gifts ≥$1,000 were within a gift range of $1,001 to $4,999Median online gift amount ≥$1,000 was $2,500Long Tail of Significant Online Gifts n = 1,429Source: Blackbaud

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

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

Event FundraisingTrends

Event Fundraising TrendsBlackbaud’s analysis of ~31,200 events and $1.03 billion raised online:16% of event fundraisers send emailsAverage event fundraiser sends 23 emails57% click-through rate on event fundraiser emails25% of event fundraiser emails result in a transactionOnline participants raise six times that of offline participantsBlackbaud’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 TwitterSource: Blackbaud

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

Online Giving Benchmarks

Online Giving BenchmarksYear 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 BenchmarksAverage Online Donation$71.00Average Blackbaud Online Donation$152.12Source:2009 eNonprofit Benchmarks Study / Blackbaud

Year Over Year Performance

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

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

Online Giving BenchmarksSource: 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 retentionAVERAGE PERFORMERS Mix of fundraising channels Online giving is bigger focus Moderate online gift volume Moderate average gift amounts New donor growth is from onlineUNDER PERFORMERS Traditional major gift focus New to online giving programs Lower online gift volume Higher average gift amounts Higher online donor retention

Traditional direct mail focus

Mature online giving programs

Higher online gift volume

Lower average gift amounts

Lower online donor retention

Mix of fundraising channels

Online giving is bigger focus

Moderate online gift volume

Moderate average gift amounts

New donor growth is from online

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

Source: The Chronicle of Philanthropy

Source: The Chronicle of Philanthropy

The Market is NoisyClosing ThoughtsOnline 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 NoisyWant to learn more? Be sure to check out….My Blogwww.blackbaud.com/connectionsBlackbaud Internet Resourceswww.blackbaud.com/internetresourcesNTENwww.nten.org

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