Quinn Donovan

Fundraisers in the worst economic era since the Great Depression continue to struggle according to a study out this week from the Giving USA Foundation.   While an estimated $307 billion dollars was given to charitable causes in 2008; total fundraising declined an inflation adjusted of 5.7% from 2007 levels.  This is the largest decline since Giving USA began publishing these statistics in 1954. The blog Tactical Philanthropy had a great post yesterday about the perspective one could bring to the news.  Sean asks, should the headline here be - Charitable Giving Exceeds $300 Billion. Second Highest Level of Giving Ever! or Charitable Giving Falls Dramatically. Largest Percentage Drop on Record!  Regardless of which perspective you take, while the total pie appears to be shrinking, online continues to be the lone bright spot in this fundraising landscape. 

With an estimated two-thirds of charities experiencing a decrease in 2008 overall giving, I decided to take a look at how things are shaping up so far in 2009.  See our full Q1 findings here.  Looking at actual data from the same 400 clients we studied in our annual benchmark study, we’re seeing online revenue is up 8% in Q1 2009 vs. 2008; 5 points higher than what we were seeing in Q4 2008.  So things appear to be trending, albeit modestly, in the right direction. Given these organizations have had online fundraising as a part of their mix for several years and the growth is on a significant fundraising volume, we believe this to be more reflective of the overall online fundraising environment than some of the other claims we’ve read this week.

When we look at the Convio client base as a whole fundraising is up significantly quarter-over-quarter and year-over-year. In fact, our Go! clients have experienced a more than 200 percent return on their investment in the last year, but it would be disingenuous to add that to our system performance and claim online fundraising is up 70 percent. The more salient point is that for these organizations online revenue has replaced most and in some cases all of the revenue they lost through traditional channels – and is more cost effective and efficient.

Another key point in the Giving USA Foundation online discussion with The Chronicle of Philanthropy was that building and strengthening individual relationships is critical in this environment. In this arena there is very positive news from the Q1 Benchmark. We are seeing Website traffic increased by 16 percent and email file size increased by 27 percent. These results reflect an opportunity to use the online channel to grow and cultivate relationships in a more cost effective and efficient way. According to the Giving USA report 75 percent of all giving came from individuals. Organizations are and must continue to focus efforts on cost-effective stewardship and engagement programs so that these individuals remain committed as we come out of the economic downturn. Our client’s results and feedback indicate that organizations that are engaging donors through multiple channels, with an emphasis online, are better positioned to weather the current economic storm and build lasting relationships with current and new supporters.

With only a quarter in the books, 2009 obviously has a long way to go.  The results in the Giving USA Foundation annual report reflect the difficulty the economy has created, but also show that there is opportunity to efficiently engage individuals in support of the nonprofit sector. The good news thus far is that nonprofit organizations are continuing to see success online in the first quarter.  Look for Convio’s Q2 updates on the state of online fundraising in early August.

Spend any time on Progressive Exchange or any of the other major nonprofit message boards the past few weeks and you can’t go two threads without tripping over another post asking how the economy is impacting fundraising.  Depending on whom you ask the answer is somewhere between, “it’s not that bad” and “the sky is falling.” 

To try and answer this question M+R came out this week with a paper studying the economic impact on online fundraising.  You can read the entire article here.  The short version is that for September and October, 5 really large nonprofits (Easter Seals, Habitat for Humanity International, National MS Society, Oxfam America, and The Wilderness Society) raised 20% more online than in the previous year.  While that is a good initial indicator, the critical time for drawing conclusions will be in the next few weeks as most nonprofits raise 30-40% of their total online giving for the year in November and December time period. 

Assuming M+R's results about online giving hold true, how is it that online continues to grow while other forms of fundraising have declined?  M+R’s hypothesis focuses on the demographics of online donors.  Younger donors are more likely to give online, to be comfortable making transaction via credit cards, and during these past few months, less likely to have watched considerable wealth evaporate before their eyes than their older donor counterparts.  I’m not sure if I fully agree with that or not, but as theories go it’s as good as any other.  Regardless it got me thinking.  I wonder if the other shoe is about to drop on nonprofits whose bread and butter donors are the young, fabulous, and over-extended? 

The headlines of the past several months have made phrase “credit-crunch” a household word.   The news has focused mainly on the rising number of homeowners whose mortgages are either in or about to go into default.  This has definitely depressed the prices of homes in almost every area of the country.  Without consumer’s home equity to draw from to pay the bills, many experts believe that the next wave of defaults may very well be in credit cards as consumers look for other ways to make ends meet.  The problem for online giving is that it is dependent on credit cards to make the transaction work.  You can imagine the chilling effect these defaults will have on online giving as more and more consumer’s default on their cards.  Even people who historically carry a relatively small balance relative to their credit-limit may not be immune.  As credit card companies scramble to limit their risk to a rising tide of defaults, card issuers may reduce consumers’ credit lines in an attempt to limit their own risk.  How willing will a donor with a recently reduced credit limit be to continuing their monthly support of your organization? 

The bottom line is that regardless of what September and October looked like for your organization the economic crisis is far from over and the variety of ways that it will impact your organization, staff, volunteers, service recipients and constituents remains to be seen.  It is possible that the unprecedented actions of our Federal Reserve will reduce or eliminate this crisis before it spills over out of banks and mortgages and into credit cards.  Or maybe it won’t.  Without any historical context, we’ll just have to wait and see.

So as usual I find myself scrambling to find a topic to write about today.   Scouring the web I find lots of possibilities around current research in the area of online fundraising, the seventh anniversary of 9-11, and Hurricane IKE sitting just off the coast of my fair state. 

Strangely I find my mind wandering to a question not about web trends and hurricane evacuees, but rather if I would live long enough to see the day that every prospect has been identified, cultivated, and converted into a donor?  To answer that I first need to know if it’s even possible to convert every single person to be a donor? Or is there a spectrum that explains people’s likelihood to give?  Statistically could we show people’s propensity to donate falls along a bell curve where maybe 20% will give regardless of what we message them with, 20% will never give, and the bulk of people lie somewhere in the middle?

It is this middle 60%, or whatever that number works out to be, that I am thinking about today.  These people have to somehow be exposed to the mission of the organization in order to give to it.   How do we reach them?  Sure there is the web, direct mail, telemarketing, but also being a direct recipient of the services your charity provides.

And so today I think about the residents of Houston and coastal Texas and Louisiana as they evacuate from hurricane IKE’s path; and the families of those affected by 9-11; and of the wonderful volunteers, disaster relief charities, and other organizations that were there, and will continue to be there, for all of us in our time of need.  And who knows, maybe as a result of the good work these organizations are doing now, when it comes time to give back, that middle 60% will get just a little bit smaller.   

Hopefully by now we all understand the importance of testing before a new email or newsletter is sent for the first time. Testing on different operating systems, multiple browsers, and email applications is the key to ensuring that your email will render properly when opened by constituents. And if you’re using conditional content in your communications, don’t forget about testing each of these versions too.

When you consider all the possible variations of operating systems (PC, Mac, Linux, etc.) and web browsers (Internet Explorer, Firefox, Mozilla, Safari, etc) along with the constituents email providers (Yahoo, AOL, Hotmail, GMAIL, etc) the number of possible variations multiplies quickly. Of course in a perfect world you would test all the permutations before you hit the send button; but since the world can be a busy place, if you had to prioritize where would you start first?

Looking at 3.5 million constituents records on Convio from a  representative cross section of our clients I found the following were the most popular:

Operating Systems
PC 89%
MAC 6%

Browsers
Internet Explorer 76%
Firefox 11%
Mozilla 7%
Safari 4%

Email Provider
Yahoo 21%
AOL 13%
Hotmail 11%
GMAIL 3%
MSN 3%

This Sunday is Father’s Day.  As the proud parent of a 4 year old I can honestly say that I have learned a lot about being a parent.  Some things I intuitively knew how to do.  Other things I had to learn along the way.  And in hindsight there are probably a few things I wish I would have done differently. 

This got me thinking.  As parents we’re continually learning, but what are we teaching our kids?  If things like giving are a learned behavior, what are we doing as parents to actively teach our children about the importance of philanthropy?

Sure, any parent who has lived through the terrible twos can attest that a certain amount of self-focus is natural among children this age.  However, despite the tantrums, and the “it’s mine” and the “I want” children are amazingly aware that there is a broader world around them.  Since they're paying attention to our lead, I think the key to raising a giving child starts with being part of a giving family.

Here are a couple of easy ways to get your children involved:

• Create family rituals around philanthropy.  Help children identify causes that they can relate to and feel passionate about.  Then give your children a say as to which charities you’re going to support as a family each year.  It could be making a financial contribution, participating in a food drive, or simply donating a book to the local library.
• There is power in children helping children.  Children have a natural empathy for other children and want to contribute to those in need.  For example, started by a child as a front yard operation, Alex’s Lemonade Stand grew into a national charity raising over $5 million for kids with cancer.  See more child founded charities here:  http://www.kidzworld.com/article/6444-child-founded-charities
• Frequent businesses that support charitable giving.  Dropping your loose change in the giving box during a visit to McDonalds is an easy way to keep year round giving top of mind for your children.
• Help your kids design and decorate a giving jar separate from their piggy bank.  Offer to match a portion of your child’s allowance towards a contribution to an organization or cause of their choosing.
• When there is a drive for canned goods, new school supplies, or unwrapped toys, have your child pick out what to purchase and donate. Make sure your child understands the item(s) are not for him/her to keep.

Providing positive examples to our children will help them become passionate about giving, show them that their actions can make a difference, and form a meaningful connection to a larger world.

Reply to this post with any examples you use with your kids, or programs your NPO has to help parents educate their kids about the importance of giving back.