Don’t put all your eggs into the online giving basket – yet

Each year nonprofit software provider Blackbaud Inc. analyzes $8 billion worth of U.S. charitable gifts to 3,000 nonprofits and releases their Charitable and Online Giving Index.

This tool is very helpful for nonprofits to identify trends in the sector, as well as compare their progress to other organizations based on size, revenue and area of focus.

In the 2012 Index, Blackbaud provides some grim and some hopeful statistics.

I found the most important findings to be:

1) Small nonprofits fared the best in fundraising in 2012. Think you need a multi-million dollar budget and a development staff of 10 to raise money? Think again.

Organizations raising less than $1 million experienced a 7.3% jump in donations in 2012.

This is compared to a tiny 2.7% increase for mid-sized/medium nonprofits ($1 million to $10 million) and just 0.3% for the biggest nonprofits ($10 million and up).

2) Giving overall in the U.S. was barely up 2%.

This is abysmal, but not entirely surprising, given the state of the economy and the stalemate in Washington.

3) Online giving was up almost 11%!

Online giving is the fastest growing method by which donors are giving. It is important to pay attention to this trend.

However, online gifts only represent about 7% of total donations. Do not lose sight of the fact that 93% of all fundraising happens through more traditional offline channels.

(The Index does not specify if their Online Giving data includes money raised via crowd-funding and online fundraising sites such as Fundly, Fundraise.com, IndieGoGo, Kickstarter, etc. Blackbaud says: “We include giving from all sources of fundraising activities: direct mail, telemarketing, face-to-face fundraising, email, online, mobile giving, small- and large-scale events, and major and deferred giving.”)

What this means for you

Stop whining that you are too small. This study shows that smaller organizations can do and have done better fundraising than organizations that raise $10 million and up.

Develop a hyper-local focus. Even though the globe is becoming more interconnected and you now have the ability to give to any cause in any part of the world, most donors choose to give locally. Donors are looking within and trying to change their communities.

Put your fundraising campaign and language into bite-size chunks. Donors want to give to smaller projects with a tangible impact that they can see, hear and feel. They want to give to smaller and leaner nonprofits that are stewarding their donations responsibly and doing “more with less”.

Focus on donor ROI. Focus some time on online giving, but focus much more time on traditional channels. The data doesn’t lie. This is where the money is.

The conclusion of the study is not rosy:

 “Overall giving is not likely to increase significantly until there is sustained growth in new donors, nonprofits rebuild their multi-year donor base, and overall donor retention improves.”

I completely agree.

How are you using the findings of this index? Please leave your thoughts in the Comments section! 

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