Web Donors Aren't Being Integrated
Into Other Fundraising

A year-long study of Web donors of 12 large national nonprofits with established direct mail programs show that they are much younger and have higher incomes than direct mail donors. They tend to join at higher giving levels and to have greater lifetime giving.

However, online giving is not currently well integrated with direct mail efforts in a cohesive, productive way, and there is evidence that online donors' higher giving dollars may mask issues with cultivation and renewal.

According to the study, called "2006 donorCentrics Internet Giving Benchmarking Analysis" and performed by Target Analysis Group and Donordigital, online donors make up a relatively small proportion of the overall donor file at most organizations. For 10 of the 12 organizations participating in the collaborative project, fewer than 15 percent of their 2006 donors gave online and four of the 12 participants had fewer than 5 percent of their donors giving online.

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Almost all programs continue to receive most of their revenue from direct mail. For 10 of the 12 participants, 50 percent or more of annual revenue is from direct mail. However, online donor populations have been growing quite rapidly in recent years. Median cumulative growth in online donors has been 101 percent during the past three years, compared to 6 percent growth for non-online (primarily direct mail) donors during that same time period.

The study's authors, Helen Flannery and Rob Harris of Cambridge, Mass.-based Target Analysis Group, acknowledged that the number of online donor is small, which can make for dramatic percent changes, but it is still a substantial increase.

The period analyzed was July 2005 through June 2006. All data was calculated directly from transactions downloaded from each organization's fundraising system. Participants have had the opportunity to review and approve a diagnostic report of revenue and gift totals by source for the years included in this analysis. All gifts less than $5,000 are included in the analysis. Larger gifts are excluded so as not to skew benchmarking results, according to the authors.

Cultivation and other investment costs are not part of this analysis. Organizations differ significantly in their investment levels for various direct marketing activities.
Presence of email address was not used to analyze the responsiveness level of donors. Classification of online gifts into finer categories that signified motivation for the gift (e.g., email, banner ads, Web site visits) was inconsistent or missing from most transactional giving data files, so it could not be used for cross-organizational benchmarking.

The organizations in the study were: Alzheimer's Association, Amnesty International USA, CARE, Covenant House, Defenders of Wildlife, Earthjustice, Humane Society of the United States, Mercy Corps, National Multiple Sclerosis Society, National Parks Conservation Association, Union of Concerned Scientists and U.S. Fund for UNICEF.

Among the other findings:

• The Internet is serving primarily as an acquisition source. Acquisitions account for the majority of online donations for many organizations. For nine of the 12 participating organizations, more than 50 percent of the online donor population was new in 2006. In contrast, fewer than 40 percent of non-online donors were new for all 12 participants.
  
  
• Non-online donors are spread far more evenly across loyalty populations (new, retained, reactivated) than online donors. For all 12 participating organizations, online donors tended to be much more concentrated in the new donor population. A median 56 percent of all online donors were new in 2006.
  
  
• Traditional direct mail donors already on the file do not tend to start giving online. In fact, the longer a donor has been giving to an organization, the less likely the person is to start giving online. For 11 of 12 organizations, fewer than 5 percent of the donors acquired before 2001 gave online in 2006.
  
  
• Online donors make up a significant portion of acquisition donors for most organizations. A median 16 percent of all donors acquired in 2006 were online donors. And online gifts make up an even greater portion of acquisition revenue for many organizations. In fact, for half of the project participants, online gifts accounted for 30 percent of all their new revenue in 2006.
  
  
• Direct mail was the most dominant acquisition channel for almost all organizations, with the Internet as the second-most dominant identifiable channel.
  
  
• Online donors have a very different demographic profile than traditional donors. Online donors are much younger and have higher household incomes than donors who do not give online. In this respect, they are a particularly different set of constituents than direct mail donors, who tend to be older and to have lower household incomes.
  
  
• Online donors tend to be spread relatively evenly through all age groups, while non-online donors are heavily concentrated in the 65-and-older age group. For the organizations that participated in this project, a median 13 percent of their online donors were 65 or older in 2006. In contrast, a median 47 percent of non-online donors were 65 or older.
  
  
• A median 5 percent of online donors were younger than 30, while only 1 percent of non-online donors were in that age group.

For more information on the study, go to www.targetanalysis.com or www.donordigital.com