Have you read the Wired Wealthy yet?  If not, Tom Belford in his popular blog, the Agitator provides a great framework of questions to keep in mind as you read the paper.

“I finally got through my reading pile to a report released about three weeks ago by Convio, Sea Change Strategies and Edge Research. The Wired Wealthy is an important study of the online behaviors and preferences of major donors (i.e., individuals giving cumulatively $1000 in a year to a given cause, through any means).

Twenty-three nonprofits provided research access to their donors in this category ... typically the 1% of donors in their universe who give almost one-third of the money.

The report drips with valuable data and insights. In fact, if you raise charitable money and do not read this report, you oughta be fired!

On the other hand, the firms and individuals who produced this report, of course, deserve a raise! And kudos too to the groups who shared their donors for the project.

No single blog post can do justice to the richness of information in The Wired Wealthy. So I won't dribble out a bunch of teaser factoids here.

Instead, to encourage you to read it yourself, I'm simply going to list some of the questions you will find answers to (or at least guidance on): 

• Can you treat all your "Wired Wealthy" alike? The authors found three segments within the Wired Wealthy universe -- Relationship Seekers, All Business and Casual Connectors. What are their critical differences and what are the implications for communicating with each segment online?
• How do these donors relate to whiz-bang online stuff like videos and social networking tools and sites?
• How do they grade (your) nonprofit websites? How often and why do they visit them? [Warning: some depressing news here.]
• How much of (your) email communications do they read ... and how do they grade them? [More depressing news! Clue: the report refers to an "inspiration gap."]
• What kinds of online communication would be welcomed by all three segments of the Wired Wealthy?
• Do they expect to be giving more money online in the future? How do they feel about direct mail?
• What online activities do they undertake in support of the causes and charities they contribute to?
• Just how important is it to be responsive to the individual preferences of these donors and to customize communications accordingly? [This is a Pass/Fail question!]
• To what degree are nonprofits honing special online approaches to the Wired Wealthy, and are the right people involved?

If these questions -- and insight into their answers -- are not important to you, then either you are not a fundraiser, or you are not a fundraiser with a future! Read The Wired Wealthy!"

Jeff Brooks of the agency Merkle-Domain publishes a great blog called the donorpowerblog, the premise of which is that "More than ever before, donors are insisting that you share power with them, not treating them like passive ATMs".  I very much subscribe to this philosophy.

Jeff and I however differ in our opinions on the value of donor research.  Jeff recently posted in response to our Wired Wealth Research  that:

Most organizations that pay attention to what their donors do will probably find these survey results to be a bit hysterical and slightly out of step with reality.

That said, this survey should get your attention. It signals a change in response medium that's likely to become significant quickly. Not only wealthy donors, but donors across the spectrum are turning more an more online to give and otherwise interact with charities. Donation revenue is migrating from the mail to the web, and that means we need to become effective at communicating online."

As Jeff points out, it is generally better to observe what people actually do vs. what they say they do however we must remember that current donor behavior is strongly influenced by how nonprofits engage them.  If we have conditioned our donors to respond via mail and don't make the online experience as compelling as their online banking, shopping, or travel booking experiences, surely it influences their behavior?

The point of a donor survey was to understand the "gap" between donor stated preferences and how nonprofits perform today.  Observed behavior and data is important but we should not ignore the voice of the donor in helping derive next generation strategies.

Back in 1999, if I just observed what donors were actually doing online with nonprofits vs. observing their behavior with commercial entities and surveying them about their preferences, I would never have started Convio!

Vinay Bhagat

Founder & CSO Convio

Wired Wealthy Study co-author

This morning I attend a session on "Attracting and Cultivating the Next Generation of Philanthropists" at the Association of Fundraising Professionals International Conference in San Diego. An interesting generational divide was apparent in the session.

As Sue Acri of Ketchum spoke about the generational attributes of the new generation of philanthropists, the conversation quickly turned to using Facebook and MySpace to engage with constituents. That's when one of the "Baby Boomers" said, "Facebook, MySpace and those things are nice, but how do we bring them into a real relationship?"

To which one of the "Gen Y" members in the room stated. "That is a real relationship."

Another "GenYer" added that these young philanthropists "want to participate, but not in traditional ways. We'll start our own organization if we don't like the way you run yours," he added.  In a follow-up question to this young man he said that he and his peers want to engage in various channels, not just the Internet, but since that is the "best and most efficient way to communicate, I assume that if you can't do that well, you're too bureaucratic for me."

After some time, Sue helped people understand that these channels need to be part of a strategy. Creating a Facebook site to say you have one will not pass the transparency and authenticity test for the next generation - a site is not a strategy.

Another person questioned the amount of resources needed and ROI on regular updates to the Web site or tying to keep a Facebook and MySpace presence real. An older gentleman in the back commented that he was glad he didn't have to show an ROI on his annual report. All interesting perspectives based on generational differences and technological sophistication.

As the session was coming to a close a young women in the back of the room, stood up and said, "These are the same questions about Facebook and MySpace that we asked about the Web several years ago. It ain't going away. We have to meet this audience's expectations if we want to engage them."

As I listened, it appears that the research completed with our partners Sea Change Strategies and Edge Research into the expectations of major donors online and today's insight into the expectations of the next generation of donors is closely linked. Nonprofits still have a great deal of opportunity to engage the next generation and major donors through the Internet - "it ain't going away."

It seems we that what we have here, might just be a "failure to communicate." Is that failure a generational gap or a technical gap? What do you think? I welcome your perspective.

Do we have an answer to the age old question - "can money buy happiness?"

Maybe not, but researchers from Harvard Business School and the Department of Psychology at the University of British Columbia, say their research suggests that how people spend their money may be at least as important as how much money they earn.

The study, published this week in the journal Science, was featured in an article in the Monday, March 21 edition of The Boston Globe. The article and study, Money makes you happy - if you spend it on others, suggests that money, spent on other people can make you happier.  

It is a fascinating article. The people who reported the highest level of happiness were those that were giving money to people or causes in need, regardless of income. 

So tell your volunteers, advocates, and other supporters it's time to be happy - give. We can all make the world a happier place.

According to the article one of the researchers, Elizabeth W. Dunn, wrote up the study, close to Christmastime. She "decided that instead of giving her family things, she would get them gift certificates to a website that allows people to choose various philanthropic projects to support.

"I've never gotten more positive responses to any gift I've given my family," she said. "I was giving them the gift of giving."

Shout out to Watt Hamlett, one of Convio's fine Solutions Engineers, who shared the article with me.

Earlier today we released a new study with SeaChange and Edge Research showing quantitative results that prove major donors are in fact "wired" and online. For nonprofits who have resisted using online communication strategies over the years,  this research illuminates a major proof point that online efforts can and do elicit responses and donations from the “wired wealthy” – those who donate at least $1000 to a single organization over an 8 month period.
Internally, we’ve discussed the implications and impact these types of findings could have on various nonprofits, but it’s been noteworthy to point out bloggers' reactions to these findings.

Kami Huyse at Communication Overturns noted that “many non-profits are missing the boat with this Web-savvy constituency” in an entry discussing the report's findings this morning. Huyse also noted the work of Beth Kanter, a social media consultant for nonprofts and prolific nptech blogger, as a prime example of how to connect with donors. She cited Beth’s recent success with raising money using social media during the America’s Giving Challenge.

Joanne Fritz of Nonprofit Online Orgs points to a major take-away of the research that “even though these 'Wired Wealthy' give online and use charity websites, they are not terribly impressed by those sites.” She also provides a list of links to other information on wealthy donors.

The Chronicle of Philanthropy’s Elizabeth Schwinn also wrote an article on the wired wealthy data along with Read Write Web’s Josh Catone who also posted a entry about the research.

All this new data brings up another issue I’ve heard discussed recently: the economy and how it might and/or will affect chartable giving in 2008. Changing Our World's President Christopher Watson recently wrote a memo addressing this issue. In this four-page document, Watson points to some interesting information and data about how philanthropy and organizations have changed along with five facts nonprofits should know about the economy.  His overall point of the memo is that “nonprofits must be guided by an understanding of the past history of philanthropy within the economy and the stability of future flows of giving, not by the short-term fluctuations of particular markets or isolated business cycles.”

This insight, paired with the Wired Wealthy data, should help reassure nonprofits using online communications - whether they be email marketing, online fundraising, social media or other tactics – that 2008 will indeed be a good year to spread nonprofit seeds online to drive results.

For years now I’ve believed that the Internet could play a much more meaningful role to support mid-level and major gift fundraising.  I’m really excited to now have some quantitative research that confirms many of my beliefs and adds some really exciting new insights.

In early 2007, Convio, SeaChange Strategies and Edge Research embarked on a research effort to study the preferences and behavior of high-value donors who had given at least $1,000 to a single charity over 18 months and who had an email address on file with one or more nonprofits. We named this constituency, the “Wired Wealthy”.  We recruited 23 organizations to participate and received responses from 3,443 high value “wired” donors to a Web survey in the fall of 2007. The respondents said that they donated on average $10,896 per year. We followed up with select donor phone interviews and separately, invited nonprofit organizations to participate in a survey of their online practices with high-value donors.

For the nonprofits who shared data with us, this segment of donors represents just 1% of their active donor file, but 32% of their annual revenue. We believed this constituency was active online and that their philanthropy could be influenced through online engagement. Our hypothesis was proven correct:

• The responding donors have been using the Internet for an average of 12 years.
• They are online an average of 18 hours a week; 80% have given online and 51% prefer online giving. 
• 66% of respondents said they visit the Web site of a cause or charity before donating for the first time; of those, 49% say they visit in nearly every instance when they are considering a donation to a new cause.
• When asked how email communications influence their giving, 42% responded that they are somewhat more likely to give;18% are a lot more likely to give again to a charity if sent email with news of recent accomplishments; 41% said that they are somewhat more likely and 33% are a lot more likely to give again if sent email about how their donation was spent.

We believed that nonprofit organizations had not determined the best way to communicate with high value donors. Provided with a variety of potential strategies in the nonprofit survey, 35% said they have devised special e-communications for higher dollar donors only; 24% said they adapt email solicitations for higher dollar donors; 16% said they send email updates to high dollar donors, but not email solicitations; and 9% say they suppress high dollar donors from all emails.  Furthermore, only 31% of nonprofit organizations indicated that their major donor fundraisers were very involved in their Internet strategies.

We hypothesized that the “wired wealthy” had high expectations online that were not fully being met by most nonprofits. Once again, our hypothesis was proven correct:

• Only 8% of donors agreed strongly that charity Web sites are inspiring, and just 7% agree strongly that charity Web sites make them feel personally connected to their cause or mission.  
• Furthermore, only 8% of respondents agree strongly that emails from causes they support to be inspiring or report that these emails make them feel more connected to the cause. 
• In general, high-value donors want to have more control over their online experience, controlling both the type of content they receive/see and the frequency of communications.

Our research confirmed that not all high-value donors are the same. We observed very clear segmentation between constituents who wanted a high touch relationship -– who we termed “relationship seekers” -- and those who preferred an efficient giving experience with limited communications –- who we termed “all business”.

We are going to present this research next Tuesday April 1^st at the AFP International Conference and will be presenting it again at the DMAW/AFP-DC Bridge Conference in July. We will also host on an online Webinar.

Nonprofit organizations have made major strides in the last few years to integrate offline direct response fundraising with online marketing. The next untapped area of opportunity is mid-level and major gifts. I encourage you to read our full report “Wired Wealthy - Using the Internet to Connect with Your Middle and Major Donors” online, and attend one of our presentations so that you can maximize the online opportunity with your high-value donors.