Donor Giving Trends for Today and Tomorrow, Part 4

[Editor’s note: This is part 4 of a four-part series on the session “Trends for Tomorrow — Action Today” held at Fund Raising Day in New York. View part 1 here, part 2 here and part 3 here.]

In the session "Trends for Tomorrow — Action Today," fundraising pros Margaret Holman, president of Holman Consulting; consultant Kathryn Slocum; Harry Lynch, CEO of Sanky Communications and SankyNet; and moderator Marilyn Hoyt, a nonprofit consultant, shared donor trends in individual giving, institutional giving and online giving, and what nonprofits can take away from those trends.

Online giving
Lynch said he recently came across his notes from the 2005 Association of Fundraising Professionals conference, and he shared some of the stats from six years ago:

• At that time the total amount of money raised online was $2.6 billion — 1.1 percent of total giving to U.S. nonprofits.
• E-mail was the second most powerful online fundraising tool behind the website.
• Two-thirds of American adults were using e-mail and the Internet, though only a third of the 65-plus demographic.
• The big buzz at the time was the excitement over the Internet and text on phones.
• The perception was that kids texted, not adults, and they were using this social network called MySpace. Facebook just came out at Harvard.
• There was a ton of tweeting going on … from birds, Lynch joked. Twitter did not exist yet.

“What a difference six years make,” he said.

There have been seismic shifts in demographics, lifestyle and communications since 2005, and they are ongoing today. Lynch laid out what’s trending now:

• The growth in online income has been exponential — there’s been a 700 percent increase in online donations in the past six years.
• Facebook is estimated to be the fastest growing company ever, with around 700 million users.
• The latest data estimates there are 6,000 tweets per second.
• Many charities are seeing 30 percent to 40 percent of direct-mail recipients making their gifts online.

Essentially, a whole heck of a lot has changed in the past six years. Here is the fundraising reality in 2011, according to Lynch:

• Your typical nonprofit now receives about 8 percent of its income online, which is still a relatively small slice of the pie, but growing.
• E-mail is the most powerful “direct” fundraising tool online today by a long shot, bringing in the largest percentage of online donations.
• Search engine marketing is the “unsung hero of online fundraising.” Paid ads and Google grants are raising money for organizations.
• Social media builds brand and excitement, but for the most part donations are still the exception, not the rule. However, in an NTEN study, 27 groups reported receiving more than $100,000 from social media.
• Mobile fundraising in 2011 is all the rage, but “hyperbole and enthusiasm often outrun reality,” as Roger Craver wrote in The Agitator.

That’s what’s happening today, but evidenced by the change in the past six years, the fundraising landscape will be different than it is today six years from now. So you must keep an eye toward what’s next.

Lynch shared what he believes is on the horizon:

• More and more adults and older adults are adopting Facebook. So if grandma is on Facebook, shouldn’t fundraisers be there too? You must look at social media and develop a strategy because that’s where donors are engaging online. There are new tools online all the time that let you target donors like never before, Lynch said. For instance, paid ads on Facebook can be targeted so specifically to drive events and donations with an easy way for donors to share that information.
• Will QR codes sizzle or fizzle?
• Can Groupon promote more than discounts? If you can get 500 $10 donations via Groupon in one day, that’s $5,000 you might not have gotten otherwise.
• Will 2012 be “the year of mobile”? While it may be more hype than substance today, it’s worth looking at again. There is existing potential with mobile since everyone is moving toward smartphones.

Finally, Lynch wrapped up the session by sharing some best practices to get the most out of online fundraising today and tomorrow:

• “Social media is clearly here to stay and will be a fundraising tool,” he said, “but don’t forget about proven basics of what’s working online today — driving traffic to the website, search engine marketing, search engine optimization, ads.” Pay attention to new techniques, but don’t abandon what works.
• Build a great fundraising website, and then market it.
• Make e-mail a priority. Use it carefully and strategically, tapping every legitimate technique to build your list.
• Keep an eye on what’s working online, and be nimble. Stay abreast of new things and keep testing, Lynch said.
• Go where your donors are.