Five Online Giving Lessons for Churches
2011 data: Technology remains promising, but no panacea.

A report issued in February by a major provider of fundraising technology and consulting services offers some helpful insights for church leaders as it relates to online giving.

In short: Use of online giving continued to grow in 2011, however, that growth remains small relative to total dollars given. Adding an online giving tool should be done to diversify options for givers and provide convenience for those who desire it. But it won't provide an instant remedy to any organization struggling to get its vision funded.

Before looking more closely at the 2011 Online Giving Report from The Blackbaud Index of Online Giving, two important disclaimers:

  • First, churches, ministries, and religious organizations aren't included in the research because "the 990 tax data set available for this group is not considered representative at this time," the report's authors write.
  • And second, Blackbaud analyzed 1,560 small-, mid-, and large-sized organizations across a variety of sectors. Small means the organization had a budget of less than $1 million, while medium means a budget of between $1 million and $10 million, and large means a budget of $10 million or more. For our purposes, we'll mostly discuss the results for small- and mid-sized organizations, which more closely resemble the budget sizes of most U.S. churches.

So, the lessons below highlight notable, general trends that aren't necessarily apples to apples for churches, but more likely crabapples to apples. They're still of value, though, given the 41 percent of churches who indicated they used online giving in 2011, based on our recent 2012 State of the Plate constituency survey.

With that in mind, here are five lessons about online giving for nonprofits that church leaders should note:

  1. The slice of pie is still a sliver. On average, online donations accounted for 6.3 percent of overall fundraising. Among small organizations (budgets of less than $1 million), the average was slightly higher, at 8.7 percent; among medium organizations (budgets of $1 million to $10 million), it was a tad lower, at 6 percent. This underscores a simple truth: Online giving remains a sliver of the overall pie for organizations.

    What isn't clear is whether these percentages represent new dollars the organizations otherwise wouldn't have received, thus making the overall pie grow. If they are new, that's encouraging. The likelier conclusion, though, is that some of those dollars were given by current donors who would have given anyway, but found the online giving option more convenient.
  2. The percentage raised online grew. Total collections generated from websites grew 13 percent year-over-year for small, medium, and large organizations (excluding international ones). Smalls experienced 12.8 percent gains, and mediums 13.1 percent, in 2011 compared to 2010. This simply shows that when online giving was chosen, more was collected through that option in 2011 versus 2010.
  3. Seasons matter. So much, in fact, that the report's authors recommend spreading fundraising efforts more evenly throughout the year. Small organizations experienced their largest online giving months in January (19.9 percent), November (16.3 percent), and December (16.2 percent); medium nonprofits ran highest in February and March (both 21.4 percent). In the concluding remarks, the authors note "there is risk in relying too much on year-end giving because the inbox keeps getting more and more crowded."

    Churches know all about year-end giving rushes, so this should come as no surprise. The report's writers laud education and higher education groups, which effectively create artificial seasonality through targeted campaigns spread throughout the year. For churches, it's worth noting the value of timing designated campaigns or other fundraising efforts so that they won't overlap other natural giving peaks during their year.
  4. Online giving requires ongoing work. The report says large, international affairs organizations suffered a marked year-over-year decline in online giving due largely to the massive response they received from Haiti relief efforts in January 2010. Rather than simply accept the 2011 drop as an anomaly, the authors rightly observed "most did not invest in retention programs for their new donors. Obviously, not every episodic donor can be retained. But organizations … who implemented a year-long multichannel campaign to keep new donors informed on progress and additional funds needed, was able to retain 15% of their new Haiti-related donors in the first year."

    In other words, relationships still matter, perhaps even more so in the online environment. Churches can learn two valuable lessons here: One, they have a built-in advantage—they get chances for face-to-face communication every week with their donors about the ministry work and the way giving makes it happen; and two, technological tools allow for additional engagement and follow-up through e-mail and other formats. If givers like online giving, don't shy away from reaching out to them through technology, too.
  5. Small can mean nimble. The report's authors also make this worthwhile observation in their concluding thoughts: Small organizations have grown online giving as a percentage of total giving because they lack resources. "When one cannot rely on a rich direct mail program or a large staff of solicitors to fundraise, one gravitates toward tools with low start-up costs and wide reach." For small churches with limited means, online giving creates opportunities to develop givers without a major commitment of resources.

Blackbaud's report paints a hopeful picture. Like anything else in ministry, online giving requires commitment, time, and tempered expectations. Churches already using this tool should evaluate their communication styles, follow through, and timing for effectiveness. Those who aren't should consider adding it as a way to diversify options for their members, especially younger ones—but they also should consider what improvements they need to make in communicating their vision, and the effects their current budgets have in changing lives, because merely providing online giving won't spur a flurry of new offerings all on its own.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations

Comments

Displaying 1–4 of 4 comments

Peter S

March 24, 2014  11:05am

As far as we can see, online giving is up substantially across all demographics. Not using online giving is like not having a website.

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Ben Sealey

May 15, 2012  7:49am

Matt, Great article. I see our clients (churches) signup for our online giving product every day, but that can't be the end of it. Like you said in the end of your article, "online giving requires commitment, time, and tempered expectations." Most of my clients simply signup and we put a link on their website and that's it. We (and when I say we, I am mostly talking about the guy in the mirror) need to educate churches, ministers, ministries, and leaders that we need to communicate with the end users in order to get the full potential of online giving. Communication will increase the average gift, create another avenue for giving, and in the end enable ministries to do their work.

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Matt

May 08, 2012  12:09pm

Mark–Thanks for sharing your thoughts. I think the question here, in terms of the Blackbaud report or your anecdotal experiences with clients (churches?), is whether the amounts coming in electronically represent gains beyond what was previously collected–or whether these collections are just the same dollars received in a new way. Looking ahead, the prospects for increased giving because of electronic methods may expand, but I tend to fall in the camp of providing a diversity of options. Some will prefer cash, others check, still others ACH, and others mobile and web (for instance, it will be interesting to see how Jack Dorsey's Square will continue to change payment preferences, especially at the mom-and-pop merchant level). Some, including my family, will always prefer the physical act of giving as a part of our worship. For others, that may be less of a concern. Churches will do well to offer several options to capture it all. And by the way, we're Gen X and we write multiple checks per month. The paper-based approach has enabled us to stay financially sound (not to mention continue to give financially to our local church in the manner we desire). Millennials, as well as those who follow, may not go this path, but in various spheres of life (gadgets, fashion, etc.) we often see traditional tools and practices gain new favor from generation to generation. Computers were supposed to turn us into a paperless society, right? We may use less paper now than 25 years ago, but we're certainly not paperless and likely never will be. So it's not far-fetched to think cash and checks will still play a significant role in the future, keeping the concept of a cashless society more theory than actual reality.

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Mark Brooks

May 04, 2012  12:22pm

Matt, Thanks for pointing everyone to this article. I agree that at present online giving is small but there will soon be a tipping point. Currently I have several clients that bring in 30% to 50% of their total donations by some online or electronic means. We are quickly becoming a cashless society and the Church needs to gear up for this whether we like it or not. How many checks do you write a month? Americans are utilizing checks and cash much less but tragically our means of collecting money, the offering is becoming quickly outdated. So, while the cautions are good in my experience one way to increase your giving is to be an online and electric church!

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