Online Giving: A Larger Piece of the Fundraising Pie

The Internet continues to transform how nonprofits engage with constituents and help fulfill their important missions. 2010 saw continued growth in online fundraising for nonprofit organizations. A recovering global economy, online response for disaster relief, peer-to-peer fundraising and the role of social media in the nonprofit sector all shaped the year.

Blackbaud recently conducted the largest and most extensive analysis study of online giving trends. The 2010 Online Giving Report includes 24 months of online giving data from 1,812 nonprofit organizations. The study found that online giving grew 34.5 percent in 2010 compared to 2009. This was a positive sign, and there were different growth rates depending on the size of the nonprofit.

Large nonprofits, with annual total fundraising greater than $10 million, grew their online fundraising 55.6 percent on a year-over-year basis. Medium-sized nonprofits, with annual total fundraising between $1 million and $10 million, had a year-over-year increase of 15.9 percent in their online fundraising. Small nonprofits, with annual total fundraising less than $1 million, had online giving grow 22 percent on a year-over-year basis.

International affairs organizations had the biggest year-over-year online fundraising growth with a 130.8 percent increase. This was followed by human services, environment and animals, public and society benefit, and education organizations. Arts, culture and humanity nonprofits and health care organizations each had less than 10 percent growth in 2010 compared to 2009. This is a very positive sign as the economy and the overall health of the fundraising climate have improved.

The Haiti earthquake had a significant influence on online giving trends in 2010. For the first time, January had the largest percentage of online giving for the entire year, with 18.4 percent of online giving taking place in January 2010 compared to 18.3 percent in December 2010. For several years now, December had been the largest online fundraising month of the year. This change can be almost solely attributed to Haiti relief funds collected by international affairs organizations, which saw online giving grow 130.8 percent compared to 2009.

Online giving is also showing its ability to attract larger gift amounts. Donors continue to make significant gifts online. In 2010, 88 percent of organizations had at least one online gift of $1,000 or more. The largest gifts online in the analysis were several $100,000 donations. The median online gift of $1,000 or more was $1,250, which is slightly lower than in previous years; 41 percent of these significant gifts were exactly $1,000, and 6 percent were $5,000 gifts.

Another important trend is the overall growth of online giving as a percentage of a nonprofit's total fundraising. This data is especially valuable because it allows nonprofits to benchmark online giving against peer organizations within each sector. Analysis of 1,438 nonprofits with total funds raised of $5.1 billion shows that 7.6 percent of total fundraising comes from online giving. Large organizations now lead the way with 7.7 percent, followed by medium-sized nonprofits with 7.6 percent and smaller organizations with 7.5 percent. The international affairs and health care sectors now have more than 10 percent of their total fundraising from online giving.

Nonprofit organizations can now use research like this to help benchmark themselves against peers. These types of metrics can be invaluable tools to gauge performance. Online giving continues to lead the changing nature of fundraising with social and mobile channels now emerging as well. Thankfully there is useful information that is actionable for all nonprofits.

Steve MacLaughlin is the director of Internet solutions at Blackbaud. Find more of his nonprofit statistical work at nptrends.com.