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Blackbaud Report on Online Giving

Quantifying Crowds: Online Fundraising in Perspective

From crowdsourcing to Twitter-based hashtag campaigns, online fundraising has steadily been grabbing headlines. Feel good stories of online fundraising campaigns have become a staple of social media. A spectacular example was the ALS Ice Bucket challenge, which combined the fun of seeing friends and celebrities dump ice water on themselves with an effort to raise money for ALS research and garnered over $100 million in donations.

While not all online fundraising was quite as engaging as the Ice Bucket Challenge, buoyed by improving fundraising platforms, online fundraising as a whole saw significant growth in 2014. The 2014 Charitable Giving Report by Blackbaud shows that online charitable giving grew at 8.9 percent year-on-year, significantly outpacing the 2.1 percent growth in overall charitable giving.

Charitable Giving in the Greater Picture

According to the report, which looked at giving from nearly 5,000 organizations, overall giving grew in 2014 at 2.1 percent and outpaced the annual inflation rate of 0.8 percent. However, it lagged behind the growth rate of the overall economy, which grew at an annual rate of 2.5 percent.

Digging deeper into the fundraising numbers, it’s clear that large- and medium-sized organizations didn’t see much growth at all. Their year-on-year growth rate was a tepid 1.3 percent, barely overtaking the inflation rate.

Small organizations by contrast showed much stronger performance, increasing their fundraising totals by 5.8 percent compared to 2013. This continues a trend started in 2012, where smaller organizations have shown larger gains in their fundraising results compared to their medium and large counterparts.

Growth across nonprofit sector was also unevenly distributed. Public and society benefit-related nonprofits increased their fundraising haul by 9.3 percent followed by higher education (3.3 percent) and arts & culture (3.0 percent). Two sectors actually saw a reduction in fundraising, international affairs (-1.1 percent) due to a lack of episodic events such as a major natural disaster, and healthcare (-3.8 percent), perhaps as a result of the long-awaited implementation of the Patient Protection and Affordable Care Act. 

Online Fundraising: Impressive Growth Potential

Online fundraising continues to increase its footprint, making up 6.7 percent of total fundraising in 2014. More importantly, online fundraising continues to have greater growth potential than fundraising as a whole, growing 8.9 percent compared to 2013.

Small organizations have made the most of this growth potential, with 7.4 percent of their total fundraising coming from online sources. The two trends of higher overall growth and a higher reliance on online fundraising suggest that aggressively moving into online fundraising is helping to fuel the overall growth in small organization fundraising. 

Meanwhile, large organizations have also steadily increased their fundraising presence online, with 7.2 percent of their total contributions coming from online sources. With large organizations often taking the lead in major disaster events, the move toward online fundraising as the method of choice for “first-response” donations will help large organizations respond rapidly to changing events. 

Medium sized organizations appear to have had the most difficulty adopting online fundraising. With only 5.6 percent of their fundraising coming from online sources, they lag behind both their smaller and larger brethren. It is difficult to draw a conclusion on why this might be the case from the Black Baud report. It may simply be the type of donations required by medium organizations may play a role, or that medium organizations are disproportionately represented in nonprofit sectors which have a lower ratio of online to traditional fundraising sources. 

There are wide gulfs in the importance of online fundraising by nonprofit sector. Medical research raises an incredible 18.5 percent of its total from online sources compared to just 3.5 percent for higher education. The Blackbaud report identifies a number of sectors with potential for increasing their online fundraising, including faith-based, education, human services, and healthcare. 

Finally, although it might be surprising that online fundraising still makes up less than 10 percent of total fundraising, the Blackbaud report points out that the percentage is roughly equal to the share of eCommerce sales as part of total sales. So far, charitable giving appears to align with other types of personal spending, in as far as how much people wish to conduct it online. 

Seeking the Personal Link: Social Media, Crowdsourcing, and Online Fundraising 

Whether Twitter-based hashtag campaigns like #GivingTuesday or crowdsourced charitable giving campaigns, online fundraising is reliant on donor engagement. Social media connects donors not only to the causes and organizations but to each other. 

The successful nonprofits profiled in the Blackbaud report each make efforts to engage their donor base across a wide range of methods. Both the Roger Williams Park Zoo and CureSearch reach out to donors using potential donors mixing online and in-person interaction. Twitter and Facebook serve as excellent ways to stay in touch with donors, giving them constant feedback on both their impact and upcoming events. All of these efforts personalize the donor’s connection with an organization. “What matters in fundraising is understanding donors and getting them involved,” says Brooke Fairman, director of development at the Roger Williams Park Zoo. 

This sentiment is echoed by Christine Bork, chief development officer at CureSearch, “What’s working for us right now is the customization of fundraising for different audiences,” says Bork. “We’re allowing people to do whatever they want to do to raise money for this cause whenever they want it.” This commitment to a donor-centric model is one of the strengths offered by online fundraising. 

Social media also allowed online fundraisers to keep their volunteers motivated, keeping them in touch with the efforts of their peers. This is demonstrated most successfully in the Darlington School’s peer-to-peer campaign highlighted by Blackbaud. “One of the key elements for success in our campaign was sustaining positive momentum by using social media and keying on big wins on a regular basis so our volunteers don’t get discouraged and kept their enthusiasm,” noted Joe Montgomery, chief advancement officer for the Darlington School. 

As organizations shift their fundraising efforts online, it’s important for them to remember that even if the medium changes, ultimately it’s about the personal interactions with the people involved. Social media and the internet have lowered the barrier to personalizing and keeping in touch with both donors and volunteers. With a greater number of online fundraising platforms available today, there is no reason for organizations to be unable to find one suited for their particular needs. 

For a copy of the complete report, click here.

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