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Online fundraising: is it working?
Third Sector, 16 March 2010
Computer and credit card
The internet was expected to transform charity fundraising in much the same way as it changed world communications. But the revolution is a slow burner, as Kaye Wiggins reports
For a medium that was expected to revolutionise fundraising, the internet has so far failed to prove its worth as a money-spinner. On average, only 2 per cent of charities’ total voluntary income came from online fundraising in 2007, according to The 21st Century Donor, a report by research agency nfpSynergy.
"Since the internet was created, we have heard talk of a revolution in giving," says the report. "We do not believe that revolution has come, and we do not believe it ever will."
Joe Saxton, co-founder of nfpSynergy, stands by the comments in the 2007 report. People thought charities would do away with other fundraising techniques and do it all online, he says. But it’s clear now that it isn’t going to happen.
The reasons for this, he says, lie in the nature of the internet. "When I look at a piece of direct mail, it weaves its story for me. And when I speak to a face-to-face fundraiser, there is a personal connection. But most online donation mechanisms are a simple, cold button saying ‘donate here’."
He points to the report’s comment that the internet cannot flirt, rarely stops people in their tracks and is poor on personal chemistry.
So is it time for charities to shift their focus back to proven fundraising methods? Not everyone is convinced.
Sharon Schofield, deputy director of fundraising and communications at animal charity The Brooke, says it will continue to spend money on online fundraising, even though it does not produce as high a return as other techniques. "It makes sense to continue investing in online fundraising and testing what works, because if we invest only in the traditional side, the charity will fall behind the times," she says.
Schofield says about two-thirds of donors who give in response to direct response TV adverts do so online, and people who sign up online tend to stay with the charity for longer. Income raised online grew by 48 per cent in the past financial year, she says.
Ben McNaught, direct marketing manager at housing charity Shelter, says the internet is about more than the immediate cash returns. "A lot of our recruitment is still through face-to-face and telemarketing," he says. "But there are plenty of ways the internet can help. It allows us to deepen and widen our relationships with our supporters and it has a great deal of potential for the future.
"In theory, it could generate more emotional and engaging messages than direct mail. I strongly believe the proportion of total funds that is raised online will increase."
Anne-Marie Huby, managing director of fundraising website JustGiving, says charities must think about the future – not just worry about the present. "Direct mail has had decades to be honed, and there is a lack of research on how to fundraise effectively online," she says. "But smart organisations should devote an important proportion of their fundraising budgets to things that might become the mainstay of the future."
Part of the problem is how to evaluate the success of online fundraising, she adds: "A lot of fundraising directors are used to the reassuring return on investment numbers they get from face-to-face and direct mail – although these figures are falling dramatically. These financial indicators are not necessarily appropriate for online fundraising because they don’t tell you how well you will do in future. Charities need to start measuring more than just how much they can expect in the short term."
The shifting nature of online fundraising makes this particularly pressing. Passion, Persistence and Partnership, a 2008 report by the Institute of Fundraising and eBay’s charitable arm MissionFish, says ‘donate now’ buttons are old-school online fundraising. Buttons are giving way to ‘friend-raising’, it says, where charities converse online with supporters about their work.
It’s a far cry from the cheap fundraising methods charities originally hoped the internet would deliver: it takes a lot of staff time and will not produce immediate or reliable financial returns. But it does give internet fundraising the personal, proactive and engaging element Saxton says it needs in order to be successful.
Huby could be right when she says: "I’m intrigued that the question of whether charities should invest online is even being asked. Surely they can’t afford not to?"
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Grant bather, 17 March 2010, 15:52
The internet was expected to transform charity fundraising and it will. The benefits compared to other forms of giving are such that it can only grow - especially through medium and small charities with less resources at their disposal. The speed of that growth is the only question mark.
Online giving is the most efficient way of donating. For example, at Virgin Money Giving we have seen an 87% Gift Aid rate - raising hundreds of thousands of pounds more for charity. This cannot be ignored.
Online giving allows charities to let their supporters spread the word, capture donations, process Gift Aid and transfer funds into charity bank accounts quickly. For all this they pay a low transaction fee on donations -- 2 per cent with Virgin Money Giving. So, not only do charities raise more money as a result, but they receive the money faster and reduce their administration costs dramatically.
In terms of the 'problem of evaluation', Virgin Money Giving's technology is designed to make charities life easier and make sure that they always know how much they have raised and how campaigns have worked. For example you can see simple reports like who your best fundraisers are and how much your charity raised online last month, or take full advantage of our customisable reporting.
With increased competition in the sector over features, benefits and pricing we will see an uplift in awareness among charities and fundraisers of the vast benefits of online giving. Online giving may have a long way to go but the benefits to charities and fundraisers alike means it will continue to improve, develop and grow to become a significant and perhaps dominant giving channel in the years to come.
Grant Bather, Virgin Money
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richard mcbriar, 18 March 2010, 11:54
we have been helping charities run raffles online at www.rogavi.com, we have case studies and testimonial its hassle free and licensed. You can integrate online ticket sales with existing paper raffles, run dedicated online raffles.
The service makes running a raffle hassle free. You do not need to design and print legal tickets, sell them face to face, collect cash, record the proceeds creating a lottery return and file the stubs for three years. With Rogavi this is all automated.
You can try it for free, any questions happy to help out.
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John Samuel, 29 March 2010, 14:08
"It's not the medium per se that's a problem but that it's the message and the implementation", is Joe Saxton saying? After all Joe is
Perhaps two inhibiting factors are the domination third party branding pages and the lack of personalisation.
At AltaContact we provide a platform for each charity to run their own exclusively branded fundraising pages. Charities and fundraisers have many ways to personalise their fundraising pages.
Directors of Fundraising, who use the platform, run their own brand fundraising pages alongside third party fundraising brands. It means that fundraisers can choose a charity brand or third party brand fundraising page.
We're told that having the charity brand at the point of a fundraising ask makes a difference to confidence in giving and awareness of the charity and its cause.
The platform also provides integrated charity event registration and fundraising page set up. In comparative trials in 2009 this doubled the number of event entrants having active online fundraising pages.
So, like Grant Bather we think that the levels of online fundraising will grow but we believe that it will be the charities who fundraise in their own brand who will see the quickest and largest growth.
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