4 Things Your Nonprofit Needs to Know About Online Donors

May 29, 2018 Catherine Xu

New data from Target Analytics, a division of Blackbaud, reveals key insights into offline and online fundraising.

The findings are based on analysis of online and offline giving data from sixteen large national nonprofits in the United States during 2016 and represent more than 6.5 million donors. These organisations participated in a donor Centrics Internet Benchmarking Group.

The giving data examines demographic and donation data for donors that only gave online, those who only gave offline, and donors that made both online and offline gifts in 2016. What emerges is a clearer picture of how online givers use technology to make donations.

Read on for 4 facts your organisation should know about online and offline donors, according to the data.

 

1. Online donors are younger

During 2016, 45% of donors giving only online were younger than 55 years old compared to just 21% of offline donors. By comparison, only 29% of online-only donors were 65 or older while 58% of offline only donors are represented in these age brackets. Consider for a moment that according to Target Analytics, the average age of a U.S. donor in 2016 was 62 years old.

What about Millennials?

Approximately 14% of online-only donors were Millennials compared to 6% of offline only donors in 2016. We also know from the data that donors giving online only gave more than their offline-only counterparts at every age level.

This is not to say that “older” donors don’t give online. This is a shadow belief among many nonprofits who believe their donors won’t make online donations. More than half of those who gave online donations are 55 years or older. 70% of donors that give online and offline are also 55 years or older. When it comes to online fundraising, the good news is that online givers help to bring the average age of a nonprofit's donor base down, but it can still be a very viable channel for older donors too.

ProTip: How can I find new donors online?

Acquiring new donors and taking the time to nurture them is crucial to your prosperity. But limited resources can put cutting-edge initiatives on the back-burner and replace them with those that just keep your head just above water.

When done right, peer-to-peer fundraising can bring an average of 10 donors per fundraiser and can deliver a much higher donation amount than traditional techniques.

If you’re not sure where to start, make sure to assess whether your website, marketing, and social media efforts are performing as they should. This is especially crucial when peer-to-peer fundraising, as many people and their peers are on connected online together. It may be worth considering investing in a more reliable, trusted platform with the expertise needed to get you there, or reassessing the support you provide on your website or the support you provide on social media.

Communication services like paid search and social media advertising should also be considered. They will allow you to target your existing supporters with very customised messages as well as acquire new donors, especially younger ones. The cost per acquisition also tends to be among the lowest.

 

2. Online donors have higher incomes 

The data analysis reveals that online-only donors tend to have higher household incomes than offline-only donors. Approximately 42% of online-only donors had household incomes over $100,000 in 2016 compared to 28% of offline only donors. Once again, we need to take into consideration multi-channel donors. 35% of donors with household incomes above $100,000 made online and offline donations in 2016.

While it is true that online givers have higher incomes, it is important to distinguish income from assets.

We know that a significant number of donors 65 years and older live on fixed incomes, but have higher asset levels than younger donors.

This tends to skew income comparisons with older donors across giving channels. These older donors may have lower household incomes that influence giving from disposable income, but their assets play a larger role in planned and major giving.

Make sure to pay attention to this crucial element when engaging supporters, as it can make all the difference when it comes to the donation amount.

 

3. Online donors are less loyal

Online givers are younger, they have higher incomes, but they are less loyal than offline donors (two out of three isn't bad!).

First-year donor retention rates for online-only donors are significantly lower than those of offline only donors. Donors who were new in 2015 and made only offline gifts have higher first-year retention rates at every age group than online-only donors.

Even Millennials who chose to donate offline had dramatically higher first-year retention rate compared to their digital native counterparts.

The sharp drop in first-year online fundraising retention rates is something Target Analytics has observed for more than a decade now. It’s one trend that often has more questions than answers.

  • Are online-only donors inherently less loyal or does it have more to do with the stewardship they receive compared to offline donors?
  • Do fragmented online giving experiences result in lower retention rates?
  • Are there issues with my website, donation pages, or donation form?
  • Will providing better support or customer service help my supporters donate?
  • Do my supporters need more information before they donate?

The visible difference in retention rates probably has more to do with nonprofits pretending donors are different than offline donors in the first place.

ProTip: How can I increase online donations?

A problem faced by most charities is the age of their donor base. It proves to be very difficult to attract the new generation of donors, especially as they are not receptive to traditional fundraising campaigns and marketing techniques. The key to fundraising success into the future might well be to utilise the power of digital platforms and online giving solutions to help people complete that donation form.

With limited resources and time constraints, planning and executing a physical event can be a logistical nightmare. Meanwhile, your fundraiser’s enthusiasm starts to drop off. Now, just like in the eCommerce space, your supporters are continually expecting a more seamless, and interactive online experience. Running a virtual event allows you to leverage this technological shift to create more engaging experiences for your supporters all while maintaining manageable costs and logistics. If you haven’t already considered running a virtual event, give it some thoughts.

Not only does it give your supporters more opportunities to engage with your organisation, it allows them to use their favourite fitness device to track their effort in a more engaging way.

Trending in 2020: Virtual Fundraising Events

A new type of support has entered the chat. Virtual events are not the future, they are the now.

There can be no denying the impact that digital technology is having on the events fundraising landscape, as well as the wider sector. We’ve seen the importance of embracing digital across most industries, and to add context, in 2000 the CEO of Blockbuster turned down the chance to buy Netflix for $50m.

Netflix is now valued at more than $30bn, and Blockbuster filed for bankruptcy in 2010.

Long gone are the days of charities expecting good returns on 5k walks, cycling events aren’t seen as the ‘challenge’ they used to be due to the increase in cycling popularity.

So, instead of planning events around 10km runs, or 100km cycles, why not challenge your entire community to run around the world over two months? Or cycle from London to Rio in 4 weeks?

With virtual events the possibilities are endless, and the technology is ready, and only helps to get your ideal supporters to bump up the numbers when completing that donation form.

By going virtual, you can welcome and activate your entire community, integrate leading fitness apps, get the benefit of lower overhead costs, get more support, more often, and help your community donate more easily.

Get up to speed with virtual events. Check out our recent post, Why Virtual Events May Be the Most Effective Strategy for Your Nonprofit

Acquiring and nurturing donors is a major issue for most charities in Australia and, with ever-increasing competition, it will become even harder. This is why revisiting traditional techniques and utilising new technologies is now the key to maintaining and improving your fundraising performance in an evolving and challenging sector.

Additionally, with so many charities competing for the dollar, having a recognised brand helps to stay top of mind when people are deciding who to support.

To give more visibility to your brand, you can invest in a customised, branded fundraising solution which will help you gain more exposure within the community.

Pulling your branding all the way through from your website to your custom landing pages and other community fundraising platforms will allow, not only for better brand recognition but also to provide the most seamless supporter experience.

4. Online donors are *not* better than offline donors

It has been nearly 20 years since the first online donation was made.

In that time, online giving has grown tremendously. But nonprofits also need to consider that less than 10% of all giving happens online. The transition from offline to online is likely to be more glacial than tidal. Giving on mobile devices, as a response to an email, and via social media is certainly accelerating this transition.

By using online platforms, you can collect data like the donor's name, email, state, and more, and use this to make better decisions about both your offline and online donation and engagement strategies.

But it's more than just online marketing that will get the job done. Search engine optimisation is just as important.

Here are four SEO tips to employ on your website:

  1. Rule number one: your content needs to be original. Don’t waste time republishing other people’s content on your website(albeit with a few words tweaked here and there). The Google algorithm favours fresh, unique content over repurposed stuff every time.
  2. Be consistent. There’s no point getting a flurry of great content posted then doing nothing for the next three months. Trust that publishing consistently is essential to staying in the algorithm’s good graces. Make sure you keep your blog, news and events sections current.
  3. Don’t keyword stuff. If you use the phrase “Australian children’s charity” as many times as possible on your website, donation pages, or email, it's not going to make you get more donations. In fact, this practice actually damages your search ranking as it doesn’t provide a good experience for readers. Be subtle and strategic with your keyword usage – include them in your headers for example, and where they naturally fit.
  4. Use internal links. When your content links to another page within your site, you’re showing search engines that your content has value. An added bonus is that it also encourages visitors to stay on your site by clicking through to other relevant pages. Inbound links (where an external site links to yours) are even more valuable: ask your partners, sponsors, supporters and the media to include links to your website wherever possible and relevant.

But nonprofits need to be careful not to confuse the channel of engagement with the channel of the transaction. Online versus offline is a false choice. The reality is that a successful donor engagement strategy involves both online and offline giving. The ideal donor is engaged through a multi-channel approach.

Nearly seven years ago, I wrote that “Single Channel Communication is Dead” and yet many nonprofits are still chasing online zombies.

In 2010, first-year retention for multi-channel donors was 51% compared to 30% for offline and 22% for online. Since then, the retention rate of multi-channel donors has increased another 10%, while both online and offline have remained about the same.

The best donors are those that give through both channels – not one or the other.

The demographics of online fundraising are very encouraging, but the retention rates should give everyone in the nonprofit sector some pause. It’s an expensive and vicious cycle to acquire new online givers only to lose 70% to 80% of them in a year.

A focus on donor engagement, stewardship, and donor retention should make use of multiple channels.

Now you should have a better understanding of your online and offline givers, as well as how you can better support, engage, and nurture them.

 


 

About the Author

This content was adapted from this original post by Steve MacLaughlin.

Steve MacLaughlin is the Vice President of Data & Analytics at Blackbaud and bestselling author of Data Driven Nonprofits.

MacLaughlin has been featured as a fundraising and not for profit expert in many mainstream publications, including The New York Times, The Washington Post, The Los Angeles Times, The Boston Globe, The Chronicle of Philanthropy, USA Today, The NonProfit Times, Bloomberg, and has appeared on NPR.

He is a frequent speaker at events including the Association of Fundraising Professionals (AFP), Association for Healthcare Philanthropy (AHP), American Marketing Association (AMA), Council for Advancement and Support of Education (CASE), Direct Marketing Fundraisers Association (DMFA), Giving Institute Summer Symposium, National Association of Independent School (NAIS), Nonprofit Technology Network (NTEN), Institute of Fundraising National Convention, Civil Society Conference, Resource Alliance’s Fundraising Online, and a keynote speaker at such events as the Crescendo Practical Planned Giving Conference.

Steve serves on the Nonprofit Technology Network (NTEN) Board of Directors and supports its focus on both the growth and professionalism of the not for profit technology field as well as building knowledge and information sharing capacity throughout the sector.

He is a frequent blogger, published author of a chapter in the book People to People Fundraising: Social Networking and Web 2.0 for Charities, and is a co-editor of the book Internet Management for Nonprofits: Strategies, Tools & Trade Secrets. His latest book, Data Driven Nonprofits, became a bestseller in 2016.

Steve earned both his undergraduate degree and a Master of Science degree in Interactive Media from Indiana University.

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