Clicking for dollars starting to compute?: Online donations to not-for-profits show signs of growth after sluggish years

September 24, 2007

During 1990s Internet mania, some in philanthropic circles had high hopes for online fund raising. After all, if people were buying books and clothes on the Web, they might just as impulsively click on a not-for-profit's "donate" button.

"They always expected it was really going to take off," recalled Eugene Tempel, director of the Center on Philanthropy at Indiana University. "But it never did."

That may be changing: A new study by the Indianapolis-based center finds that not-for-profits "may be beginning to realize the hoped-for success."

The percentage of organizations reporting success from Internet fund raising has more than doubled to 34 percent from 16 percent in 2000, the center found in its latest Philanthropic Giving Index survey.

The center, which likens the index to a Consumer Confidence Index for charitable groups, also said the percentage of groups finding success with e-mail solicitations grew to nearly 28 percent from 15 percent six years ago.

"Fund-raisers recognize that with the Internet, donors can turn an impulse to give into a donation within seconds," Tempel said.

Monica Woods figures impulse had a lot to do with the 462 donations to the University of Indianapolis' alumni Web site since online giving capability was added in March 2006.

The director for alumni relations at U of I said some donated after logging in to check campus news or to register for alumni events.

Woods said she considers the online giving option essential, noting that people expect to be able to pay online for any number of ordinary purchases. One donor last year gave just before the clock struck midnight on New Year's Eve-apparently to meet the tax-year deadline.

"It's cost-efficient and it's time-efficient. The university's door is open 24/7," she said.

Convenience indeed appears to be a driver in online giving, said Timothy Seiler, who heads the center's fund-raising school. But online giving is not replacing more conventional fund raising and giving strategies, he said.

Indeed, the survey found that Internet and e-mail were the least effective method for soliciting donations in terms of dollars raised-trailing foundation grants, major gifts, planned giving, special events, corporate giving and even telephone solicitation.

Gifts were small: 47 percent of groups surveyed said online gifts averaged $51 to $250. And a similar percentage said online contributions accounted for only 1 percent to 5 percent of their total contributions.

But results have been much more promising at WFYI, the city's public radio and television broadcaster.

About 12 percent of the giving to WFYI now comes online. It raised $20,000 in 2000, the first year one could make a contribution via its Web site.

With about a week remaining in its current fiscal year, about $345,000 has flowed in via the Web site, said Theresa Tetrault, director of development and strategic gifts.

That's a growth rate of about 17 percent a year vs. about 5 percent for overall giving to WFYI. Tetrault acknowledges that WFYI has some advantages other not-for-profits don't. As a broadcaster, it can constantly promote its online giving option, virtually for free. It also offers perks, such as free coffee mugs or videos, for those who contribute at certain levels.

Still, Tetrault said not-for-profits must constantly promote their online giving options. Her team sends out direct mailings and electronic newsletters that mention the online giving option. Three years ago, WFYI sent out e-mail solicitations for the first time. Those generated $37,000 in gifts, about $8,000 less than what the emails are on course to raise this year.

"You have to drive people to the Web site," Tempel said.

One thing driving online contributions in recent years was a spate of disasters ranging from hurricanes to tsunamis to acts of terrorism.

Even some organizations not known for generating massive Web traffic are looking at online giving options. The Central Indiana Community Foundation, which directs more than $650 million in assets toward not-for-profits, next year plans to modify its Web site to allow donors to direct money online to any number of its funds, said President and CEO Brian Payne.

Goodwill Industries of Central Indiana, which already accepts donations over its Web site, also is exploring new potential for online giving, said Vice President Cindy Graham.

"You're looking to grow your donor base. You want to have diversification," said Tim Ardillo, director of institutional development at the Indianapolis Zoo.

Traditionally, the zoo has counted on support from families with children. But he's also mindful of younger adults, who "are apt to use the Internet."
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