What is online giving?
Online giving has become an integral part of most organizations' fundraising strategy - for good reason. This guide explains how online fundraising can help expand your donor base and provide valuable data and insights about your donors.
What is online giving?
The world of philanthropy is changing before our very eyes. Long gone are the days when fundraisers went door-to-door soliciting donations. Gone are the days when organizations relied on direct mail alone to generate enough gifts to keep them afloat.
Now, fundraisers need to give donors the convenience and ease of online giving. Donors need to be able to sit at their desks, and within seconds, complete their transaction.
Online giving empowers donors to give on their terms. It’s your job as a fundraising organization to set up the portal, make it simple, and drive traffic to it.
Why should organizations set up a system for online giving?
Donors should be able to give what they want, when they want, where they want.
Just like for-profit companies have made it as easy as 1-2-3 to shop online, nonprofit organizations need to do the same for donations.
Donors often give just because the mood strikes. Maybe they recently attended an event or saw an ad or learned that a family member utilized your services. When donors are ready to give, you need to be ready to receive. That is the power of online giving.
But the benefits extend beyond your bank account.
Now that you’re collecting donations online, you can capture contact information and data on page visitors. You can learn a lot about your constituency simply by following their patterns of behavior. The graphics, the writing, the software, the coaching… It’s everything we need.
In fact, significant progress can be made with an online donor by taking it offline. Once you learn a little bit about new donors to your organization, you can call them or meet with them in person to learn more about their values and interests. There are likely diamonds in rough, major donors hiding in plain sight, if you know where to look.
Now, fundraisers need to give donors the convenience and ease of online giving. Donors need to be able to sit at their desks, and within seconds, complete their transaction.
Online giving empowers donors to give on their terms. It’s your job as a fundraising organization to set up the portal, make it simple, and drive traffic to it.
How does online giving work?
The portals through which donors give can either sit on your organization’s website or on a 3rd-party platform. Once the donation page is set up, you can drive traffic to it through numerous funnels, which we’ll discuss in more depth later on. These funnels can include email marketing, peer-to-peer campaigns, and special events.
Donors will land on the donate page and give through their credit card or through other online payment apps.
Now, fundraisers need to give donors the convenience and ease of online giving. Donors need to be able to sit at their desks, and within seconds, complete their transaction.
Online giving empowers donors to give on their terms. It’s your job as a fundraising organization to set up the portal, make it simple, and drive traffic to it.
The data that support online giving
People of all ages give online, and more people are giving online each and every year.
In 2021, Blackbaud analyzed data from 4,525 different nonprofit organizations. In their report, they found that online giving grew 9% from 2020, a trend that has continued upward steadily over the last decade. In a study that has three years’ worth of data, they found that organizations saw a 42% increase in online giving over that time.
The analysis they ran saw that online giving was up, independent of the size of the nonprofit.
Large organizations that fundraise more than $10 million saw an increase in their online donations of 9.8% in 2021. Medium-sized organizations that raise between $1 million and $10 million saw an increase of 8.7%. And small organizations that raise less than $1 million grew their online fundraising by 3.9% from 2020 to 2021.
Over a three-year period, the increases were even more dramatic. Online giving grew over 41.6%. For large nonprofits, it was 34.7%. For medium-sized nonprofits,the growth was a whopping 61.2%. And for small nonprofits, it was 31.9%.
Want to know benchmarks for how much online fundraising should make up your total development efforts? Online giving should make up approximately 11% of total fundraising, slightly more if you’re a smaller nonprofit. Overall, in 2021, online giving made up 11.9% of organizations’ total fundraising efforts. For large nonprofits, it was 11.1%, for medium nonprofits, it was 11.3%, and for small nonprofits, it was 17.8%.
Online Giving by Sector
Blackbaud broke down the percentage of total fundraising from online giving by sector as well. They found that faith communities raised the highest percentage online with 16.8% followed by animal welfare organizations at 11.7%. After that came human services (9.1%), arts & culture (7.7%), public & society benefit (6.8%), and K-12 education (6.4%). International affairs (5.9%), medical research (5.8%), and the environment (5.1%) came next. Healthcare (3.3%) and higher education (2.7%) rounded out the list.
They broke down the year-over-year change in online giving from 2020 to 2021. They found that the sectors with the highest online giving growth rates were public & society benefit at 28.3% and the environment at 20.1% growth. The next fastest-growing sectors were higher education (13.6%), K-12 education (11.7%), and arts & culture (11.1%). Then came international affairs (10.2%), faith communities (9.4%), animal welfare (8.5%), healthcare (8.4%), and medical research (7.4%). Finally, human services was down -5.9%, likely due to how high the number jumped in 2020 in response to the needs of the COVID-19 pandemic. The -5.9% is a regression to the mean.
Lastly, when comparing sectors, Blackbaud showed the three-year rolling trend for each category. Public & society benefit saw a massive 142.3% change in that time. The environment saw a 58.6% increase over three years and higher education saw a 56.4% increase. After that comes faith communities (26.0%), human services (23.4%), and animal welfare (20.2%). Arts & culture (13.6%), international affairs (7.0%), healthcare (6.6%), and medical research (5.3%) round out the list.
People Continue To Give Through Mobile Devices
Blackbaud estimated that roughly 28% of all online donations were made using a mobile device. This is a trend that has continued to grow since Blackbaud started tracking this datapoint in 2014, when it was just 9% of all online donations.
Mobile giving is only going to continue to grow in popularity. Your donation process should be as mobile-friendly as possible.
The Lifetime Value of a Donor
Are you calculating a donor’s lifetime value? If someone gives you $100, you have a $100 donor. But if someone gives you $100 and increases 10% each year for 10 years, you have a $1,500 donor.
Online giving can play a pivotal role in helping you retain your current donors. According to Blackbaud, the retention rate for first-year, online-only donors is 23%. That number jumps to 64% for multi-year, online only donors.
Best practices of online giving
It is ideal for nonprofit professionals to implement best practices when first setting up their online giving initiatives. However, this isn’t always possible. The good news is that you can optimize your efforts at any point, which should help you see increased efficiency and effectiveness in the way you collect funds online.
Here are three ways to optimize your online giving program:
1. Donation page optimization
- Your donate page should be a simple form without any extraneous fields. It should be easy to understand and fill out.
- Add a security badge so donors know they can trust you.
- Play around with suggested amounts to see what inspires the most – and largest – donations.
- Make sure you include a statement (or more than one statement) about the impact of a donor’s gift. The value proposition on your donate page could increase conversions significantly.
2. Make sure your donation page is mobile friendly.
In 2021, an estimated 28% of all donations were made on a mobile device. That percentage is only going to increase in the coming years. If your form isn’t easy to navigate on mobile, you’re going to lose a significant number of donors and donations.
3. Offer multiple payment processors.
Most often, people will want to pay with a standard credit card. But that trend is changing as well. Now, there are several mobile payment options that are becoming increasingly popular. These include ApplePay, GooglePay, and PayPal. More and more donors are requesting to pay through their donor-advised funds, which is a special vehicle for people who are organized about their philanthropic giving. And, we’re seeing a rise in requests to give through cryptocurrency as well. The more payment options you offer, the easier you are making it on your donor base, and the more likely they are to donate..
Ways to encourage people to give online
Your online donation portal can be used in numerous ways. Here are five online giving ideas you can incorporate to inspire larger gifts.
- Make it monthly – add a checkbox on your form that allows donors to opt in to make a monthly, recurring donation. Monthly donations are great for you because you can count on regular, predictable revenue; and monthly donations are great for donors because they can set it and forget it, knowing they have helped an organization they love. Approximately 45% of people who donate to charity are enrolled in a monthly giving program – failing to make it monthly means leaving substantial sums of money on the table.
- Play with matches – Recruit a major or donor or two to match people’s gifts as they come in. People relish the opportunity to see their donations go further when matched. Matching campaigns attract donors like sales attract shoppers – they’re hard to resist as donors feel like they’re getting the most bang for their buck.
- Peer-to-peer pressure – We’ll talk about this more below, but peer-to-peer campaigns are an excellent way to recruit new contacts into your database. Ask your organizational insiders to ask their friends and family for donations.
- Let’s eat – More organizations are adding an online component to their in-person dinners. They are live streaming events and compiling digital journals. By opening up participation to online users, organizations are attracting people that would never otherwise show up for such a high-ticket item. Meanwhile, the people who regularly attend these events continue to do so.
- Saturday night live – More and more events in general are happening online now. Broadcasting an event has never been so easy. Even hybrid events with tickets are possible now for even the smallest organizations.
What sort of data you should be collecting
There are countless ways to track how your online giving program is performing. Here are some key performance indicators that will help you get started.
- How many dollars have you raised online? add a checkbox on your form that allows donors to opt in to make a monthly, recurring donation.
- How many donors have given online? While the total donation amount is of paramount importance, it doesn’t give you the whole picture. Let’s say, for instance, you raised $5,000 online in January and $10,000 in February. At first glance, it’s easy to see that February was the more successful month. However, once you “look under the hood,” you see that you sent out an email in January to people on your list who have never donated before. You learn that, in February, a major donor died and her daughter gave a $10,000 donation in her mother’s memory. Now, you can ask yourself again, which month has the most to teach you?
- What is the donation page conversion rate? Donation abandonment is a real thing. In fact, just about 75% of all users who start the donation process never finish it. Calculating how many people actually make it to the finish line will tell you if your page is optimized for conversions. If many people are landing on your donate page but not donating, it likely means there are distractions on your page. Maybe your form is too complex. Maybe you’re inadvertently enticing them to visit other pages of your website. A low conversion rate means something needs to be fixed.
- How many new donors have you acquired through your online giving initiative? You’ll want to check how you are doing regarding donor acquisition. Are you reaching people who have never given to your organization before?
- How many donors are giving online for their second, third, or fourth times? Donor retention is the key to any great fundraising strategy so understanding how repeat donors are donating will help you build deeper connections with them.
- What is the average donation size for an online gift? Compare it to what you receive through more traditional fundraising methods. Through your CRM, you should be able to see how much each donor is giving so you can prioritize and target your efforts for effective follow-up.
Ways to promote online giving
Once your donation portal is ready, it’s time to invite, inspire, and encourage your constituency to use it. You have to do more than just build it for them to come.
The cheapest, most effective way of asking people to donate online is through email marketing. More than 26% of online donors say that email is the tool that most inspires them to give. Most nonprofits already send their database a regular newsletter. One option is to simply add a call-to-action to that newsletter to donate.
Of course, the more attention you give your online campaign, the more you will attract donors. Sending stand-alone emails will yield the best results.
The strategy that we have seen the most success with is running a peer-to-peer campaign. Get members of your board and your most ardent supporters to commit to a fundraising goal. Ask them to turn to their family and friends for donations to support your work. When they reach out to their contacts, they will include the link to your donation portal. And just like that, you will attract new donors to your cause, like-minded people to those who already support you. It’s the simplest and most-effective way of growing your donor base and inspiring more people to give online.
Another way to garner attention is to join a Giving Day or umbrella campaign. You likely know of GivingTuesday, the most ubiquitous giving day in the world. Chances are that your city’s largest foundation runs a giving day each year as well. Joining one or a different “cause awareness” campaign is a great way to execute a digital fundraising strategy.
If you go the route of joining a giving day, make sure you include branding from the parent page. This may include adding a hashtag (like #givingtuesday) to all of your promotional material. It will make you easier to find among the crowd as people look for worthy causes to donate to. Because these campaigns are shared so prominently on social media, add a SHARE button on your donate form that allows people to easily tell their friends on Facebook, for instance, that they have contributed to your cause.
Now that you’ve decided to institute an online fundraising program, here are your next steps:
- Establish your goals – How much do you want to raise online?
- Pick a strategy – Are you going to use matching funds to run a matching campaign? Are you going to use peer-to-peer fundraising?
- Determine your budget – Are you going to spend money on software, graphics, printing, etc.?
- Tell a story – Do you have a compelling ASK that pulls on the heartstrings?
- Determine your channels – Are you going to use social media, print mail, advertising, or an in-person event?
- Do the prep work – If you’re running a peer-to-peer campaign, you’ll need Fundraising Ambassadors and materials to help them raise money from their family and friends
- Test your tools – Test the donate buttons and make sure everything works
- Launch! – Promote your campaign across various mediums: email, social media, direct mail. Spread the word far and wide!
