Best Practices for Capitalizing on Online Giving

Charitable giving is a key funder for many association foundations, and a new report is offering some guidance on the most effective approaches for reaching donors. The Blackbaud Institute’s Charitable Giving Report  (opens in a new tab), released last month, noted an increase in online giving of nearly 7 percent last year, compared to overall giving, which grew only 1 percent.

“Online giving is up to close to 10 percent over the last three years,” said Steve MacLaughlin, senior advisor at the Blackbaud Institute. “That is significant, given that we are talking about $10 billion in gifts.”

The report noted that the average donor age is 63. And while there has been the perception that older people aren’t comfortable with technology, MacLaughlin said that group goes online to give all the time.

“The internet has been around for 20 years,” MacLaughlin said. “A lot of those donors who are now 60 were giving in their forties. Twenty-five percent of online donors are between 55 and 64, and 20 percent are between 65 and 74. So, that’s 45 percent of donors.”

MacLaughlin added that although people are giving online, it doesn’t mean that’s how they were initially introduced to the organization they are donating to.

“One of the things I’ve said for years is that nonprofits should make sure we don’t confuse the channel of transaction with the channel of access,” MacLaughlin said. “They may have still received the direct mail or the magazine. They may have gone to the event. It was just convenient to give online. It isn’t completely about how they were motivated to give.”

Donors come in through many different channels, and that’s good news because all of those channels are typically in your control. “It’s not like somebody at 1:46 in the afternoon decided, ‘I’m not doing anything, let me search for a charity, go to their website, and make a donation,’” he said. “Most of the traffic is driven there by the nonprofit.”

That’s why associations and foundations need to continue to use multiple touchpoints to contact donors. And if a donor reaches your site through a donation page, it’s important to customize that page—particularly if they’re coming from an email link.

For example, MacLaughlin said he wouldn’t ask someone who has given $150 online the past few times for $20. “I would try to, over time, move them to a higher gift amount,” he said.

The report also showed that mobile giving made up 26 percent of all online giving. Because of this, it’s important to make sure your website is optimized for mobile. “Those that are optimized for mobile perform better than those who don’t,” MacLaughlin said.

While personalization is good, MacLaughlin said it’s most important to retain donors.

“I always challenge them to think: What if it is all about the second gift? What would you do differently?” he said. “A lot of our other research has shown that giving by monthly donors—people who have it automated to give a certain amount each month—is a really fantastic way to drive that behavior of continued giving.”

MacLaughlin said there are big differences in the retention rates if you can get donors to give more than once. Only about a quarter of people who donate once in a year come back to donate in following years, compared to nearly three-quarters who gave more than once.  “Monthly giving has a higher donor retention rate,” he said. “The comparison is, do you want a 24 percent retention rate or 73 percent?”

One drawback some people see with monthly giving is the amounts tend to be smaller. “The one thing you’re making a trade off in, is how much [money] you get,” MacLaughlin said. “But the retention rate is going to be much higher, and over time, the donor often gives more [than a larger, single donation].”

What strategies do you use to optimize online giving? Share in the comments.

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