 Most nonprofits have well-established direct mail programs with which they have been cultivating donors for decades. Nonprofit organizations have honed these programs over the years so that direct mail practices are relatively efficient and well understood.
Over the past several years, broadband networks, email, and the World Wide Web have grown rapidly and are now in wide public use. This technology has allowed nonprofits to make major changes in how they coordinate with their activist networks and communicate with their volunteers, donors, and other constituents. As a result, and sometimes with seemingly little effort, online giving has begun to account for a significant and rapidly growing portion of donations for many nonprofits.
However, using the Internet as a vehicle for giving and cultivation is still relatively new.
Fundraising staffers seldom have more than a few years of online fundraising experience and there are not many proven best practices. Some nonprofit professionals are unsure of the best way to start an Internet program; others are already actively fundraising online but feel they have few ways to predict or measure the effects of their efforts.
Key Findings from the Online Giving Data
Online donors currently make up a relatively small proportion of the overall donor file at most organizations. For 10 of the 12 organizations participating in the collaborative project, fewer than 15% of their 2006 donors gave online. Interestingly, 4 of the 12 participants had fewer than 5% of their donors giving online.
Almost all programs continue to receive most of their revenue from direct mail. For 10 of the 12 participants, half or more of annual revenue comes from direct mail. However, online donor populations have been growing quite rapidly in recent years. Median cumulative growth in online donors has been 101% over the past three years, compared to 6% growth for non-online (primarily direct-mail) donors over that same time period. Granted, online donor numbers are small, which can make for dramatic percent changes, but it is still a substantial increase. In particular, relief and animal welfare organizations saw significant spikes in online donations in the past two years due to tsunami- and hurricane-related giving.
Online Donors Have a Very Different Demographic Profile than Traditional Donors
Online donors are much younger and have higher household incomes than donors who do not give online. In this respect, they are a particularly different set of constituents than direct mail donors, who tend to be older and to have lower household incomes.
Online donors tend to be spread relatively evenly through all age groups, while non-online donors are heavily concentrated in the 65-and-older age group. For the organizations that participated in this project, a median 13% of their online donors were 65 or older in 2006. In contrast, a median 47% of non-online donors were 65 or older.
A median 5% of online donors were under 30, while only 1% of non-online donors were in that age group. Given the concern that many organizations have about the high average age of their donors, this is certainly an important finding.
Although the trend is not as striking as that for age, online donors tend to be more concentrated at higher household income levels than non-online donors. For all 12 participating organizations, the proportion of online donors who had incomes over $100,000 was greater – and in some cases much greater – than the proportion of non-online donors who earned that much.
In contrast, the proportion of online donors who had incomes less than $25,000 was significantly lower than the proportion of non-online donors who earned that amount.
There are not significant gender differences in behavior between online and non-online donors at most organizations. Men do tend to give larger gifts than women, but this is true both for online and non-online donors.
Online Donors Give Much Larger Gifts than Traditional Donors
Online donors join at significantly higher giving levels, give substantially more revenue per donor when they renew or reactivate in subsequent years, and have much higher cumulative lifetime revenue over the long term than donors who do not give online.
In 2006, the median average online gift was $57, in contrast to a $33 average gift to all other sources. For 2006, median revenue per donor was $114 for online donors and $82 for non-online donors. In fact, for 10 participants, 2006 revenue per donor from online donations was more than double that from non-online donations.
As we have seen, online donors tend to have higher household incomes, which almost always correlates to larger gifts regardless of channel. However, online donors still give more than non-online donors even when they have the same income level.
Online Donors Are Slightly Less Loyal than Traditional Donors
Online donors renew at lower rates than donors who do not give online. This is more evident for new donors; as loyalty to the organization increases, renewal rate differences diminish. For donors who were new in 2005, those who had given online in their acquisition year renewed at a median 26.5%, while those who had not given online in their acquisition year renewed at a median 30.4%. Retention rates were essentially the same for 2005 multi-year online and non-online donors. Donors who are acquired online renew at lower rates than donors acquired through other channels. This was true for 7 of the 12 participants. The organizations that had higher renewal rates for online donors all tended to have relatively low numbers of online donors to renew. Renewal rates do not vary significantly with differences in demographic factors, such as age and household income. |
Online Donors Have a Significantly Higher Average Long-Term Value than Mail Donors
