Culivating Serious Online Relationships

Target Analytics, a Blackbaud company, recently released the 2008 donorCentrics™ Internet Giving Benchmarking Analysis. The findings confirmed that online giving is becoming an “increasingly significant source” of funds for nonprofit organizations. This is really no major revelation. The stats validate the results of the recent Presidential Campaign, as well as other research — including the 2008 AFP Survey, revealing that the only area of fundraising that tracked an increase over 2007 was online giving. Still, the challenge remains—how do you integrate online and offline fundraising channels to optimize long-term success for your organization? “With direct mail, the blueprints for success are well-known, but in this new multi-channel world everything is new and many strategies are still unproven.” said Rob Harris of Target Analytics.

Key findings from the 2008 Internet Giving Benchmarking Analysis:
• Online giving still represents a relatively small portion of donors and revenue at most organizations, but it is growing rapidly and is becoming an important source for new donor acquisition.
• Online donors are younger and have higher incomes than traditional direct mail donors.
• Online donors give larger gifts and, as a result, have a higher overall long-term value than donors to more traditional giving channels like direct mail, but they are less loyal in terms of repeat giving.
• The online giving channel must be an integrated part of an entire direct marketing program.
• Donors in the southwest and mountain regions of the United States are disproportionately more likely to give online.
• Differences in revenue per donor and retention rates between online and offline donors are consistent across geographical regions.

Interestingly, offline donors do not generally migrate to online giving, but online donors do migrate to offline channels in large numbers. Therefore, it’s important for your organization to have a donor “moves management” strategy in place to keep your online donors engaged and giving. It’s all about the relationship and potential donor value. One-time gifts are nice, but they will not do your organization any good in the long term, because online donors tend to downgrade—even disconnect when they move offline. Cultivation is key.

Other interesting findings:
• Even with its recent growth, online giving is still dwarfed by direct mail in aggregate.
• Online donors have a slightly lower retention rate than traditional donors. Perhaps it’s the difference in attention span?
• Online giving is not a strong renewal channel. Large numbers of online donors migrate away from online giving and to other channels, primarily direct mail.
• Direct mail donors rarely give online.
• Having an email address on file makes a positive difference in the giving behavior of offline donors.

Study background:
Over the past three years, Target Analytics held a series of annual meetings with twenty-four national nonprofit organizations on the subject of online fundraising. The primary purpose was to give each organization participating the information needed to benchmark its own online fundraising program performance against those of peer organizations—and to provide a forum for sharing best practices about online fundraising tactics and integrated marketing strategies.

How do you make the most of online giving?


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