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:
- 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.
- 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.
- 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.
- 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.
- 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.