I know we’re late to the party on blogging about this, but I did a doubletake when I saw Blackbaud’s most recent giving report. Only 13% growth in online donations? And they had to remove disaster relief organizations to get that number to be positive…in a year when a gigantic tsunami struck Japan? These reports have not been consistently tracking social media driven donations, but we look at overall online donations as a linked indicator. So what gives?
How international affairs organizations are counted makes a huge difference in the numbers, and to get a sense of how online giving is changing overall, I believe it is best to exclude this huge swing as Blackbaud has done in the 2011 report. We’ll leave the puzzle of why Japan and Haiti elicited such different responses for another day.
So, how do we compare the two? Note: The percentages by sector don’t add up to 100% (other sectors aren’t tracked, and account for minority percentages)
What I want to do is determine the percentage growth for the tracked sectors, excluding international affairs, from both years, but this number is available only in the 2011 report. An SAT word problem ensues! My method, excluding international affairs:
- For each sector, multiply the percentage growth in 2010 by the percentage that sector represents.
- Add those products together.
- Divide the total by the total of sector percentages represented.
If I did this wrong, please call me out on it. It’s encoded in a formula in this spreadsheet. I’m glad I did the math, because my assumption was that the overall growth rate of online giving had radically slowed. Not true: The growth rate in 2010, excluding international affairs, was around 13% (@SMacLaughlin, with certainly more authority on the matter, says 15%), and the same number in 2011 was also around 13%. In 2007, according to Blackbaud data, overall giving grew 50%, then 40% in 2008, then 46% in 2009. I don’t have the source material to exclude international affairs from those figures, however.
So perhaps the big drop was actually 2009 to 2010. Let’s take a step back. Perhaps this whole discussion is flawed. Obsessing about online giving growth rates makes an implicit assumption that the overall magnitude of annual giving – $300B – is fixed, as it has been for the past few years.
We should be seeking to grow giving overall, and focusing on that percentage.
While the report’s statement “As with all large numbers, the bigger the overall percentage [of online giving within giving overall] gets, the slower it tends to grow” is usually true, overall giving is influenced not by a mathematical rule of thumb, but by:
- How many organizations exist, their capacity, and their participation and effectiveness in various kinds of fundraising.
- Changing donor demographics – yet, the US economy and population are growing much faster than giving is.
- Changing nonprofit demographics – some go out of business, new orgs are created to replace them with different ideas of how to fund themselves, perhaps by not needing donors at all.
The same growth rate from 2010 to 2011 (if accurate) can be viewed as a victory in that the growth rate did not decline as rapidly as from 2009 to 2010. The online universe has changed very rapidly over the last decade, but it is possible that most of the organizations who have the capacity to raise funds online have already started doing so.
So how do we continue to grow online giving as a percentage of overall giving AND grow overall giving too?
- Focus on the “long tail” – many nonprofits we talk with are still struggling with the basics of being online, let alone fundraising there. The temptation when the largest fundraising industry company makes plans to buy the next largest is for the mid-tier vendors to go after bigger nonprofit clients. Very few fundraising companies focus on nonprofits with 1-5 staff (please prove me wrong in the comments – let’s talk).
- Time. The cause of low experimentation for most causes is usually not lack of will or lack of skill or budget, but lack of time. We should focus on decreasing the amount of time it takes to use all kinds of fundraising tools. We think a lot about this – staff time per dollar with respect to community size – at HelpAttack!
- Stop focusing on big campaigns with lots of zeros, and make sure tools work well in efficiently converting unique online visitors or offline touches to donors. Very few organizations (Livestrong, American Red Cross, Charity Water) will be able to generate those impressive numbers with a mass audience. We like it when reports and case studies focus on percentages and conversion rates instead.
What are your ideas to get US giving to $400B?