Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

June 17, 2013

Recurring giving, tribes, tithes and the Blackbaud Online Marketing Benchmark Study

Special to Philanthropy Journal

Dennis McCarthy

The recently released Online Marketing Benchmark Study for Nonprofits has a number of large “moments” and shifts in the patterns of giving; pieces of data that should make you think. One of the more interesting and important pieces of data within the report is the section on monthly donations or recurring giving.

Here are some of the important data points from this year’s study:

Growth in total fundraising from recurring online gifts for all verticals, also known as  subsectors, increased by 27 percent.

o  All National Taxonomy of Exempt Entities (NTEE) verticals showed an increase in recurring giving.
o The largest increases were observed in higher education (73 percent), association and membership (48 percent) and Jewish organizations (57 percent).

  Growth in the number of donations as a percentage of total donations had some astounding results.

o Recurring gifts now represent 24 percent of all gifts in the Christian ministries, 17 percent of all gifts for disaster and international relief and 14 percent of public broadcasting gifts.
o On average, 8 percent of total online gifts were recurring gifts.

When examining the average monthly contribution, you find a wide variance by vertical.

o  Some of the examples are $64 per month for performing arts and libraries, $50 per month for Christian ministries and to the other extreme $15 per month for public broadcasting.
o  The performance (no pun intended) for performing arts is likely to be subscriptions or enhanced membership, still a large amount of $768 per year on average.
o  And Christian ministries looks and feels a good deal like tithing; though not at the traditional Judeo/Christian 10 percent of income as a tithe.

Moreover, the great change in average donation amount is the performing arts subsector with an 18.5 percent increase, higher education 10 percent growth but a decline of 28 percent in the visitation vertical.

Most recurring gifts in America are made via credit card
There was a time not so long ago when we were informed by the media to never use our credit card online. Now we find ourselves in the midst of rapid change in the perception of risk in using your credit card online, especially among boomer and mature audiences. Now, the barriers are lower than before for making an online gift with your credit card. A point of clarification: almost all recurring gifts in America are made via credit card and not direct debit.  

Americans are catching up with our donor counter parts in Canada and the United Kingdom in terms of making monthly/recurring gifts to our favorite charities. When you observe the change as you have in Christian ministries, this looks almost like tithing, or that we are budgeting for regular payments that are swept from our accounts. Much easier to digest than being asked repeatedly for yet another one time gift.

What is driving change in Americans giving patterns?
A few months ago I sat in on a benchmark group, which focused on sustainers, with Target Analytics. What was remarkable was the amount of channels and touch points being integrated across campaigns by nonprofits. They didn’t have just one face-to-face/peer fundraising campaign, they had three, and all were integrated into direct mail, email and telemarketing campaigns. Clearly a good part of what is driving success of the acquisition of monthly donors is the growth of integrated marketing.

It seems as though people are giving to organizations with which they have a personal connection or affiliation. I think we see the same with increased monthly giving to hospitals and Jewish and Christian ministries subsectors. All of these verticals can be understood as being relevant and important to the donors. People chose these organizations and these organizations have deep personal ties to the donor and their families.

Lastly, the growth of recurring donors is likely being driven by changes in giving behavior from one sector to another, increased comfort in online credit card recurring gifts and perhaps most profoundly leveraging best practices around integrated marketing.

Dennis McCarthy is vice president of strategy at Target Analytics, a division of Blackbaud Inc.

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  • At 4:27 AM, Blogger Randy Benjamin said…

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