Inside Philanthropy

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

December 7, 2009

Charities missing out on digital giving

By Todd Cohen

Giving increasingly is going digital but many nonprofits are not plugging in.

A new study conducted by Forrester’s Technographics for online provider Convio estimates online giving in the U.S. to nonprofits will total over $4 billion this holiday season, with over 111 million givers saying they plan to give over the Internet this year.

And individual charities are being more strategic and innovative in their use of technology to raise money.

United Way of Central Carolinas in Charlotte, N.C., for example, is offering givers the option of using cell phones to text donations, while the Salvation Army in Wake County, N.C., gives people walking by bell-ringing volunteers the option of swiping their credit cards to make a donation to the group’s Red Kettles.

A growing number of charities are using the “Causes” application on Facebook, which now has 350 million members, to promote their organizations and raise money.

And JPMorgan Chase recently launched a program that lets Facebook users vote on which of more than half-a-million smaller charities will receive a portion of $5 million the financial-services company is donating.

Despite those signs that givers increasingly are giving digitally, a new study by Weber Shandwick says that while 88 percent of nonprofits are trying them out, 79 percent are not sure how to show the value of social media and only 51 percent are actively using them.

Nonprofits, in short, are failing to connect with potential givers using the communication media those givers increasingly are using.

A study earlier this year from Target Analytics, a Blackbaud company, found online giving generates only about one in 10 dollars given to charity.

That same study found online givers tend to be younger, newer to charities they support and making larger gifts, compared to offline donors.

Online donors also tend to be tougher to retain.

So charities have a lot of work to do.

The recession has put charities under serious financial stress through a combination of rising demand for services, higher operating costs and a squeeze on individual and institutional givers.

But givers are indeed giving, and more of them are using digital media to give.

Charities need to do more than throw information about their organizations on their websites.

What they need to do is better understand how their givers and prospective givers are communicating, and then develop communication and fundraising strategies to connect with and engage those givers.

Givers give to causes they care about, and building relationships with those givers is critical.

Increasingly, givers are turning to digital media to communicate and to give.

So charities must work a lot harder to develop digital strategies to reach, inform and engage givers and raise money.


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