Things That Caught our Eye: What's Driving the Increase in Online Giving

Ryan Garnett recently wrote a piece for npENGAGE titled What’s Really Driving the Increase in Online Giving? It’s a worthwhile and thought provoking read, suggesting that the increase in online giving is likely driven by older donors and NOT younger/millennial donors. Based on the data findings, Garnett recommends several tactics that charities can use to better achieve their goals, including optimizing their online donation form to be as simple as possible particularly for older donors.

Garnett makes many valid points, but he seems to overlook two points that I believe are integral to success for non-profit organizations:

  1. Increasing online donations in and of itself isn’t a worthwhile goal. Non-profits should instead identify what their development goals are and determine which channels and tactics will yield the best results to meet those goals. Different tactics are most definitely needed for different audiences and donors.

  2. Non-profits that don’t have the expertise or resources to excel at engaging younger donors in general should ask passionate younger donors for their help. Many young people want to donate their talents in addition to supporting an organization financially, and this is one of the easiest ways for them to do that.

Let’s dive a little deeper into these tactics.

Online donations are growing, but likely from older donors, not younger donors

According to data from Blackbaud, overall online giving in the US grew at 7% last year. Garnett cites examples from Harvey McKinnon Associates (HMA), showing a high correlation between online donations and donors who frequently receive mailings as part of traditional fundraising methods, suggesting that it is really older donors giving online rather than new, millennial donors giving digitally. Garnett  advises non-profits to continue growing online donations by investing in traditional fundraising methods. If traditional channels are working to reach donors and they’re donating online as a lower friction way to actually make the gift, then certainly organizations should continue to nurture that behavior.

But this doesn’t necessarily address the bigger question: How will non-profits engage and cultivate younger donors in order to remain a viable organization? It’s no secret that many non-profits need to replace their aging donors. And the data shows that because donation habits are shifting online doesn’t mean younger donors are the ones who are participating. This leads us to our second point.

Engage millennials for both financial support and to cultivate relationships

Regarding millennial donors, Garnett suggests cultivating those relationships with other tactics. He nails these on the head:

Millennials want to make an impact, but often times they don’t have the financial resources to do so. They’ll be happy to share your content through social media and participate in an event to raise money from their friends and family, but they may not yet have the financial resources to make a significant charitable donation.

So rather than focusing on trying to get money from this group, focus instead on engaging them in your cause—give them other ways to get involved. Connect with them through social media. Provide them with ways to share about your mission and the impact your nonprofit or charitable organization makes. This could include providing a platform for them to create their own peer-to-peer fundraising page.

Most importantly – show them how their support (whether financial or not) has made an impact. Because if you’re able to engage them now and keep them interested in your cause, they’ll be more likely to donate to your organization in the future.

The article wraps up with three ways to increase online donations from both younger and older donors:

  1. Build a well-designed online donation form.

  2. Continue to invest in off-line fundraising programs.

  3. Focus on donor stewardship.

But are there other ways to think about it?

I agree with many of the suggestions in the article, however, increasing online donations in and of itself doesn’t seem like a worthwhile, stand-alone goal. Non-profits should identify what their short and long-term goals are and determine what tactics are needed to meet those goals. The channel through which donations come in should be less of a focus than the cost to raise those funds, the strength of the relationship with the donor, and in turn the likelihood of a long-term, ongoing relationship.

Given that many charities understand the ROI and conversion rates of their offline development tactics really well, continuing to invest in those to drive donations from older donors makes sense. As Garnett suggests, non-profits should then make it as easy as possible for those donors to give online by creating a simple online donation process with a great user experience. I love his suggestions to sit with donors and watch them use the online donation form and take notes of where they might be confused of struggle.

For younger donors, Garnett suggests that cultivating that audience on their terms is required to have success there. Again, I totally agree but I think it is easier said than achieved for most non-profits due to limited time and resources.

The challenge for non-profits is therefore to manage its social media presences in a way that serves the goals. Millennials crave and expect authentic interactions with organizations. Merely “going through the motions” can come across as just checking the box vs. actually engaging.

Younger donors want to give their talent in addition to their treasure. For non-profits that don’t have the expertise or resources to excel at engaging their community via social media, they can and should ask younger donors for their help. This has the dual benefit of 1. ) engaging younger donors who will become advocates for the organization and 2.) those individuals will help the charity connect with other younger donors.

Rather than focus on high-level metrics such as total online donations, identify the data and insights that will truly measure your organization's success and optimize towards those.

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