News Updates The NonProfit Times/Kintera Online Giving Survey While the World Wide Web has been among the most significant new fundraising tools in the past decade, it has not nearly reached its full potential. Both in terms of the dollars raised and the number of organizations using Web sites for fundraising, year-to-year growth continues at more than 50 percent -- with the expectation that billions will be given online in the coming year. Online fundraising reached an estimated nearly $2 billion in 2003, which was more than 60 percent above the amount raised in 2002, according to an online survey of readers of The NonProfit Times . There was also a projected greater than 55 percent increase in the percentage of organizations that attempted to raise money online when the first half of 2003 is compared to 2002. These are among the findings of a survey recently conducted by The NonProfit Times and San Diego-based software as a service provider Kintera, regarding the adoption and success of online fundraising by the nonprofit community. Kintera officials described the online amount raised estimates as “conservative,” given the relative dearth of large nonprofits in the sample size. Some large nonprofits tend to be major users of online donation technology. The NonProfit Times sent an email to 30,000 nonprofits asking them to participate in the survey, with a URL that directed them to a Web site containing the survey, shown in the figure below. The survey was especially designed with questions that are not independent (that is, answers to one may be corroborated by answers to others), thereby enabling a more accurate analysis of the responses. Kintera analyzed the survey results. Survey ResultsSome 787 responses came in, of which 759 responded to both yes-no questions regarding online fundraising in 2002 and the first half of 2003 (the first two questions in the survey). Table 1 gives the results to these 2 questions.
Table
1: Top row – have you been collecting donations online in 2002? To obtain actual estimates for online amounts raised, Kintera used the redundancies that were built into the questions to eliminate inconsistent responses. For example, if an organization reported more online donations in 2002 than total donations for 2002, the numerical data for that organization was rejected. Similarly, if an organization characterized itself as having revenues greater than $20 million and indicated total donations of less than $1,000, its data was rejected. A lot of leeway was given for discrepancies between revenues and donations, but when they were not credible, they were rejected. Also, if an organization answered “no” to the question regarding raising money online in 2002 and then reported actual monies raised online for that year, its data was rejected. After this thorough cleansing, 250 organizations remained. These were divided into three categories, according to reported total amount raised in 2002:
Table 2: Total amounts donated and online amounts donated in 2002 Taking the estimates that large organizations receive 89 percent of total donations, medium-sized groups 10 percent and small ones 1 percent, extrapolating the results of Table 2 to $240 billion donated in 2002 and assuming the same amount in 2003, the following estimates were developed:
Moreover, the two largest respondents to have remained after the cleansing process were in the higher education sector, which lags considerably the general nonprofit sector in terms of online donations as a percentage of overall donations, and both have reported $0 in online donations in 2002 and a combined $300 in online donations in 2003. The estimate for online giving in 2002 represents less than 0.5 percent of total 2002 giving, which is considerably less than the percentage of online retail relative to total retail (estimated at more that 1.3 percent in 2002). Similarly, the estimate for online giving in 2003 represents less than 0.8 percent of total expected 2003 giving, again considerably lower than the percentage of online retail relative to total retail (expected to be over 1.5 percent). Estimates for the data on retail come from numerous sources and are widely divergent; the values we give here are conservative. See, for example, data from the U.S. Census Bureau. Interestingly, the annual growth of the percentage of online giving relative to total giving tracks the annual growth of the percentage of online retail relative to total retail but at a three to four year lag, with the lag narrowing. The reason for the lag is that nonprofits are adopting online technologies somewhat slower than retailers, and are marketing the online option a lot less aggressively than their for-profit counterparts. The reason for the narrowing of the lag is two-fold. First, as people get comfortable with online shopping, they also get comfortable with online giving. Thus, it is only a matter of the organizations enabling the online option that is at play, and not end-users acceptance of the form of transaction. Second, and more significant for the future, is whereas online retail will continue to be dominated by credit card transactions, with a small percentage of alternate payment methods such as PayPal coming into play, online giving will also borrow from the techniques of online banking. In 2003, the growth of automatic check handling (ACH) has grown at a much faster pace than PayPal, and this type of giving is expected to increase even faster during the next several years. In conclusion, it is therefore reasonably confident in asserting that online donations in 2002 totaled more than $1.2 billion and it can be projected that they will total more than $1.9 billion in 2003.
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