Fall-Winter 2002-2003

Online Fundraising Comes of Age
by Michael Stein

Many of us recall the announcement by President Bush, encouraging Americans from all walks of life to visit Helping.org, RedCross.org and other online sites to donate generously.  According to a March 21, 2002, Chronicle of Philanthropy article by Nicole Wallace, over $215 million of the more than $2 billion collected altogether was donated online. Online fundraising had come of age.

One year later, online fundraising has continued to evolve.  Here are four trends that are notable during this past year.

Trend One: Small and medium-size nonprofits are making a commitment to online fundraising, many for the first time.

Small and medium-size nonprofits have made notable investments in online fundraising systems, most frequently by putting "Donate Now" buttons on their web sites to solicit direct contributions from supporters.  Organizations such as Network for Good (formerly operating as Helping.org and currently run by AOL Time Warner, Cisco and Yahoo) have been influential in encouraging this with their free -- though feature-light -- donation button service.  Other fee-based services such as eGrants.org, Entango Corporation, Donate.net, eTapestry.com and others have continued to acquire nonprofit customers, building the trend.  This trend has grown because nonprofits continue to seek new sources of income, and are (finally) convinced that the effort of setting up a donation button is worth the return on investment.  The events of September 11 appear to have influenced their thinking that donors are now comfortable with giving online.  An economic downturn, coupled with budget cutbacks at foundations, has been another motivating factor that is encouraging experimentation. 

Commercial Alert in Portland, Oregon, is a good example.  With a broad mission of keeping commercial culture within its proper sphere, they've had their hands full recently.  Recent campaigns have included challenging corporate marketing in public schools and campaigning UNICEF to cancel McDonald's World Children's Day. "We're getting a lot of good press recently," says Commercial Alert Executive Director Gary Ruskin. "We're expanding and growing as a result of the exposure. We did our first targeted direct mail campaign in April and May 2002, and encouraged people to support us. We redid our web site to improve the look and layout, and we figured out how to hook up the eGrants.org DonateNow! button."  Their May online donations totaled $1,100, June was $1,800, and numbers have stayed over $1,000 each month.  "Online gifts are only about 5% of our total gifts as a result of this direct mail campaign, and we hear that's pretty normal. We figure that some donors visit our web site after they get the direct mail piece to learn more about us, and then give online because it's convenient. Our goal is to get the word out about our work, and make it easy for people to give in whatever way they're comfortable."

Trend Two: Larger nonprofits are making significant infrastructure investments in membership management systems.

Larger nonprofits have signed up in droves with integrated membership management systems, offered by companies such as Convio, Kintera, Groupstone, GetActive Software, Virtual Sprockets, Social Ecology and others.  These services are transforming the infrastructure of nonprofits by integrating a wide variety of knowledge and information management processes such as Web site content updates, membership tracking, email messaging, events registration, credit card processing, e-commerce transactions, and advocacy campaigns.  These integrated services, while often out of the price range of smaller nonprofits, nevertheless represent important advances in membership management and online fundraising.  This trend has grown because larger nonprofits want to integrate both membership management and Internet presence, and it has come to encompass a number of different organizational functions and staff.  Larger nonprofits are convinced that these best-of-breed services deliver improved organizational effectiveness and better member relationships.

Children Now in Oakland, California is an example of a larger nonprofit doing this.  Their mission is to improve the lives of children, and they accomplish this through groundbreaking research, media and advocacy campaigns.  Recent projects have included studies of media and gender.  "Boys to Men: Media Messages about Masculinity" is their landmark 1999 study that shows how media often reinforces a gender strait jacket and how boys need a fuller range of options to grow up healthy in America.  "We were on the lookout for a company that was both flexible and willing to grow with our needs in mind," comments Children Now Internet Coordinator Colette Washington, who signed up with GetActive Software to power their email messaging and advocacy campaigns needs.  "Our staff had a wide variety of needs, because we do so many different things, and we quickly found that we would need to prioritize our wish list."  They use GetActive Software to periodically contact registered users by email to recommend that certain actions be taken via fax, email, phone, or letters.  GetActive powers the advocacy tool, complete with Congressional directory, tracks user activity to help customize action alerts and allows Children Now to contact registered users to provide updates on actions taken.  "We have yet to convert all our membership management to this system, but this was an appropriate and affordable first step," says Washington.

Trend Three: Experimentation and creativity have become hallmarks in online fundraising campaigns.

Both of the above-noted trends relate to infrastructure changes within nonprofits.  Other than infrastructure, this last year has seen a big leap forward in how nonprofits are experimenting in the way that they're conducting their online fundraising.  Creativity in using the tools of the Internet has allowed nonprofits to create audio, visual, photographic and other presentations to engage email subscribers and website visitors.  Planned coordination between direct mail and Internet appeals has also allowed for better messaging and membership engagement.  Finally, the relatively low cost of experimentation in the online medium allows nonprofits to do a lot of campaign testing, to find out what works and doesn't work, and thereby learn their own lessons on their way to online fundraising success.

"Give Pets a Chance" is a groovy online fundraising campaign created by Internet agency Donordigital.com for the Massachusetts SPCA.  Combining the compelling appeal of animals needing homes with 60's flower power copy and graphics, the campaign is designed to help find homes for hard-to-adopt animals and increase giving for their care until they're adopted.  Bi-monthly e-mails, a home page pitch, and special campaign and giving pages achieved results by dramatically increasing online giving, injecting some viral fun into the MSPCA's online program, giving pet-loving constituents even more ways to help animals, and finding homes for featured animals.

Grist Magazine, an online environmental magazine and project of Earth Day Network, raised more than $65,000 in three weeks with a highly creative and innovative online fundraising campaign. Grist sent several personal, humorous, and compelling appeals to its subscribers (including one from the mother of editor Chip Giller), using a combination of HTML and straight text. Says Chip about the campaign: "We were amazed and gratified by our readers' generosity."

Trend Four: Online giving portals are playing a growing role in donor education and engagement.

Building on the experiences of 9-11, several online giving portals have played an increasingly important role in educating and engaging donors in charitable giving and volunteering, with civic responsibility as the underlying message.  Networkforgood.org, Volunteermatch.org, JustGive.org, USAFreedomCorps.org, NetAid.org, Idealist.org and many others have worked hard to collaborate to engage Americans to get involved.  As a result, they are continuing to build the Internet as a medium that serves a vital role in civic life.  That in turn is powering the other three, since it broadens the supply side of Internet giving, volunteering and engagement.

While many would use online fundraising and dollars raised as a benchmark for success, many agree that ongoing relationship building between donors, volunteers and the nonprofits agencies themselves is the desired outcome.  Internet technology tools have increased in sophistication this past year, allowing nonprofits to try new things.  The experimentation that we hear talked about so much in nonprofit agencies is the sound of organizations changing and adapting to new ways of doing things in an era where high speed Internet access, online banking, Internet shopping, and e-commerce are becoming everyday realities for millions of Americans.

It is now more important than ever for nonprofits of all sizes to improve their online fundraising effectiveness and performance.  More broadly, it's important for nonprofits to learn how to build online relationships with donors and volunteers, and to do it gradually, effectively, and affordably.  Let's use this occasion to renew our commitment to sharing our lessons learned, writing up our case studies, seeking out training opportunities, and working together to make the most of what the Internet has to offer.

Michael Stein is a nationally renowned author and Internet strategist with over a decade of experience working with nonprofits, foundations, labor unions and technology assistance providers.  He is currently the Associate Director of Groundspring.org (formerly eGrants.org), a nonprofit technology and training agency based in the Presidio National Park in San Francisco.  He is the author of three books about the Internet including the recent The eNonprofit: A Guide to ASPs, Internet Services and Online Software with John Kenyon, published by CompassPoint Nonprofit Services.  Michael also runs Dot Org Media as a joint venture with Marc Osten of Summit Collaborative, a content publishing service that offers an e-newsletter and special reports on key issues in nonprofit technology.

Post a comment

Remember personal info?

* Denotes required field.