Nonprofits flunk online fundraising test

Nonprofits are creating online hurdles for donors, and as a result are missing the chance to raise millions of dollars, if not billions, a new report says.

While online giving accounts for only about 6 percent of total charitable gifts, “charities put up unnecessary roadblocks to donors giving online,” Rick Dunham, president and CEO of Dunham+Company, says in a statement.

The inaugural Online Fundraising Scorecard, a study by Dunham+Company and Next After, reviewed the websites of 151 organizations over nine months in 2013, signed up to receive emails, and made an initial $20 gift.

The study looked at 56 key indicators in four key aspects of online fundraising, including email registration, email communication, the donation experience, and the gift acknowledgement process.

Among the organizations in the study, 127 scored 75 or below.

Results of the study, combined with research showing that over two in three online transactions are abandoned, led to the conclusion that “there are millions — if not billions — of dollars being left on the table,” Dunham says. “Virtually every charity could improve the online giving experience for donors.”

In the area of email registration, 76 percent of charities make it easy to find their email signup form, although 66 percent of email signup provides little-to-no interest to potential donors, and 84 percent of charities present a non-exclusive signup offer, or one that is appealing because the donor cannot get it anywhere else, the study says.

Big factors in determining the success of  online fundraising, the study says, are the frequency and manner in which charities communicate with donors.

Yet over one in three organizations studied did not send a single email to new subscribers within the first 20 days of signing up, 79 percent of emails do not personalize the “to” line with a first and last name, and 56 percent of organizations did not make a single ask in the first 90 days.

In the area of online donation experience, 80 percent of organizations studied do present a clear call-to-action, and 85 percent have a landing page design that matches the email, yet 84 percent were not optimized for mobile viewing, the study says.

And in the area of gift acknowledgement, while 99 percent of organizations understand the importance of thanking a donor, the study says, 63 percent did not offer a donor “next steps” to take.

Todd Cohen

Tech tools seen boosting funder collaboration

Funders that want to work together but find it tough to do can turn to technology to make it easier to collaborate, a new report says.

New tech tools “can make collaborations easier by reducing inefficiencies and enabling new methods of working together,” says Harnessing Collaborative Technologies, a report from the Monitor Institute and the Foundation Center.

Foundations increasingly are collaborating to make a greater impact in addressing big, complex problems, the report says, yet many of those funders are struggling to work together.

Challenges they face, including time to manage the collaboration and develop “protocols” to share information and act jointly, can stymie the partnerships, it says.

But new technologies can make it easier for funders to find and connect with other funders, work and make decisions together, and measure, track and share their progress and results, the report says.

“Data visualization” tools, for example, let foundations find patterns of giving and funding relationships, and better understand complex social and economic trends, the report says, while social networking sites can be a resource for funder collaboratives, and other online tools can help foundations find, share and discuss news and information.

Funders also can use new tech tools to better coordinate their work, streamline group processes and use online workspaces that integrate tools for collaboration such as  document sharing, calendar sharing, blogging and group discussion boards.

And funders can use the emerging concept of “open data” to aggregate information and share it broadly through social media tools such as blogging.

While they are independent by nature and “never have to collaborate,” the report says, “working together can help funders aggregate resources to match the scale of the problems they are seeking to address.”

New technologies can “significantly decrease the barriers to collaboration” if funders choose tools that are easy to use, can be integrated into existing systems and customized for specific needs, and allow information to be shared.

Todd Cohen

Digital civil society emerging

Digital technology and data are driving the use of private resources for public good, and the shape of that emerging social economy will depend on how nonprofits, philanthropies, business and government address critical questions about the ways that data are collected, shared and used, a new report says.

“How we use private data for public benefit will be a definitional issue for our future social economies in Europe, the United States, and across the globe,” says Philanthropy and the Social Economy: Blueprint 2013.

The annual industry forecast was written by Lucy Bernholz, a visiting scholar at Stanford University’s Center on Philanthropy and Civil Society, and produced in partnership with GrantCraft, a joint project of the Foundation Center and the European Foundation Centre.

Key digital issues

The report focuses on three areas in which the adoption of “digital practices, not just digital devices, is changing the root structure of work in the social economy.”

Those include the “nature of voluntary association which requires a degree of privacy that may be in jeopardy online;” the “nature of ownership and governance,” both of which are being looked at differently in the digital era; and that way data could “become a backbone resource for the digital economy.”

The report also looks at the emerging trend of tech-savvy individuals volunteering for local governments.

Associations and privacy

In associating with one another to do work that benefits others, people count on “making private choices to act publicly,” the report says. “We are most likely to take these actions if we are certain that we can do them voluntarily, without retribution or fear.”

The U.S. constitution “grants the right to ‘peaceable assembly’ in its First Amendment,” and European countries mainly “put the full force of their laws behind the right to individual privacy and enforce these protections on the Internet and in corporate behavior,” the report says.

Yet the “current digital infrastructure shares certain elements with some governmental regimes, both present and past, which made associations and private voluntary action unsafe,” it says.

“The trails of evidence created through the use of digital tools are long-lasting, remotely stored, and not controlled by the users but instead by the owners of the digital infrastructure or network interface,” it says.

The collection and storage of digital communications “metadata” are the “equivalent of a tap on every phone or an intercept of every piece of mail,” it says. “This can compromise users’ privacy and make digital tools unsafe.”

While nonprofits and foundations are using social media and digital video to “tell their stories, build movements, and raise awareness,” the report says, doing so may be “jeopardizing their existence as private alternatives outside the public sphere.”

So the organizations that make up “digital civil society,” it says, need to think about their own practices involving digital privacy.

And because their existence “depends on the right of people to gather outside the bounds of the market or the state,” the report says, those organizations “have an obligation to participating in shaping the rules and norms regarding digital privacy.”

Ownership and governance

Unlike the era when goods and money “could not be endlessly reproduced,” the report says, digital goods “can be infinitely copied, with no degradation to the original,” thus requiring the invention of “new rules and software to control how digital copies are made, shared, sold, and stored.”

New approaches to owning and sharing digital good now are expanding to apply to digital databases, the report says.

A small group of organizations such as Mozilla Foundation, Creative Commons, Open Knowledge Foundation and Wikimedia foundation are working to seek “redress or exemption from the tax or oversight authorities wherever they are based.”

That work is creating a model for many associations, and the “challenges they face and rule-exceptions they seek now will become norms for many organizations,” particularly as a growing number of organizations become “inherently global in membership and ownership.”

Data as a ‘starting’ resource

Data have become “core resource of the digital age,” the report says.

And data include not only numerical information on grants but also images, stories, movies, music and “almost anything that can be digitized,” it says.

And while major efforts are underway to “collect better information about nonprofits and foundations and the revenue that supports them,” it says, “we still have a long way to go before this information becomes a valuable resources of and for the work of the social economy.”

Early examples, it says, include shared maps of commonly-coded grants data that are being used by funders interested in black male achievement, and a shared platform used by philanthropic education funders to track federal education proposals that need matching funds.

The ability gather, store and share digital information “can change the fundamental practice of social economy actors,” the report says.

The emergence of “impact investing” over the past five years, for example, “has depended on the development of shared metrics for social and environmental return,” it says.

“Data did not create impact investing,” it says. “But the movement would not have grown with the momentum it has if digital solutions hadn’t been available to meet the demand for both common language and metrics.”

Shared, comparable data “are a prerequisite for the impact investing movement,” it says. “Their use here demonstrates how data can catalyze new enterprises, behaviors and investments.”

Yet the “human and organizational resistance to new practices and behaviors is significant, and the pressures to change philanthropic behavior are weak,” the report says.

Still, some groups are pioneering the use of digital data.

GiveWell, a nonprofit charity review group, and GoodVentures, a philanthropic funder, for example, have teamed up to use data-driven analysis as the basis for individual and shared philanthropic funding decisions, and where all the data and analysis used by the partners are share publicly, the report says.

It also says the role of data in the social economy raises a number of issues, including disclosure of data on donors to social welfare organizations and charitable nonprofits.

No common practices exists to guide the sharing of data “funded by, used by, and resulting from grants given by philanthropic organizations,” it says.

And because “every funder has individual requirements,” it says, a nonprofit with two funders can find itself in the “impossible position of presenting the same information under two different standards.”

What’s more, it says, because many organizations “rely on revenue earned from data in either raw or analyzed form,” while they “may see a benefit to sharing the data freely, they also need to keep the lights on.”

Civic tech

In recent years, tech-savvy individuals in a several cities have been volunteering for local governments, the report says.

While those efforts are driven by volunteers, it says, public agencies also are reaching out to residents and inviting them to improve city services.

And citizens are connecting with one another.

Cities, for example, provide data that coders use to build apps that give public transit riders arrival and departure times, the report says, and clean air advocates reuse data from those apps, along with open mapping software, to propose new bike routes.

Citizens also use software games that let them play with city street grids, and can redesign streetscapes, rally neighborhoods and work with city agencies to build new parks, the report says.

“From superficial efforts to suggest new library logos to substantial engagement through participatory budgeting processes, communications technologies are changing the way we interact with our cities, our elected officials, and our civil servants,” it says.

Todd Cohen

Giving through charity websites grows

Donors, including a growing number age 60 and older, increasingly prefer to give through a charity’s website, often motivated by requests through direct mail and social media, a new study says.

As a results, “it is vital for charitable organizations to ensure they have created an easy and effective online giving experience for donors,” says the study by Dunham+Company.

From 2010 to 2013, roughly one in two donors gave through charity websites, says the study, The Growing Importance of Charity Websites to Philanthropy.

The study was based on Dunham+Company studies in 2010, 2012 and 2013 that were part of an online Campbell Rinker Donor Confidence Survey each of those years of 510, 494 and 514 adult donors, respectively, who gave at least $20 to charity the previous year.

Donors age 60 and older represented the only demographic group that showed consistent growth in giving through charity websites for the period, with the share of donors that age who gave through charity websites increasing to 47 percent from 37 percent for the period.

In comparison, the share of donors under age 40 who gave through charity websites fell to 50 percent from 55 percent.

Giving through charity websites “is no longer the realm of the under-40s but is also the world of the over-60s,” the study says.

That’s important, it says, because research by Bank of America shows donors age 60 and older give more to charity than any other group.

What’s more, the study says, the number of donors age 65 and older giving through charity website has grown to nearly one in two in 2013 from roughly one in  three  in 2010.

All three studies found female donors are more likely to give through a charity website than male donors, with 53 percent of female donors giving online in 2013, compared to 44 percent of males.

Roughly one in three are motivated to give through a charity website by an in-person solicitation to support a charity, the study says.

And one in five donors say that when they want to give a gift that is not motivated by any particular communication from a charity, they decide to fulfill the gift by going directly to the charity’s website.

That tendency is strongest among donors under age 60, with nearly one in three donors saying that is their preference, compared to roughly one in five among donors age 60 and older.

And donors age 60 and older have shown the greatest growth since 2010 in the preference to give online, with nearly one in three preferring to give that way, up 55 percent from 2010.

Eighteen percent of donors say they have given through a charity’s website as a result of someone asking them through social media. In comparison, donors did not respond to social-media requests for support from the charity itself.

And 17 percent of donors say that, as a result of receiving an appeal letter through the mail from a charity, they fulfilled their gift by going to the charity’s website.

The older the donor, the study says, the more likely she is to give that way in response to direct mail, with one in four donors age 60 or older saying they responded to a direct mail appeal by going to the charity’s website to make a donation, compared to one in five donors ages 40 to 59.

In comparison to the 17 percent of donors prompted by an appeal letter through the mail to visit a charity’s website to give, only 2.7 percent of donors were influenced to give that way by an email message.

And the amount of online giving driven by email messaged fell by over half since 2010, the study says.

The rate at which direct mail influenced online giving grew to 6.3 times the rate of at which email messages influenced online giving in 2013, compared to 3.4 times the rate of email messages in 2012, and 2.3 times the rate of email messages in 2010.

Among recipients of direct mail solicitations, 44 percent gave through a charity website in 2013, compared to 41 percent who gave by mail and 15 percent who gave some other way.

Todd Cohen

Causes, not organizations, seen as key for Millennials

To effectively engage Millennials, or people ages 20 to 33, nonprofits should focus on how the causes they care about affect individuals, while also delivering their messages using digital devices and social media that generation prefers, a new report says.

“Millennials are challenging the traditional methods of communication and marketing,” Derrick Feldmann of Achieve, a creative agency that released the report, says in a statement.

“Millennials want to succinctly know how their time, social media post, petition signing, and dollar will have an impact on the individual needing help or the issue they care about,” he says.

In fact, says the 2013 Millennial Impact Report, Millennials “number one pet peeve” is telemarketing and phone-based fundraising.

The report draws conclusions from previous research on over 11,000 Millennials, and from a national online survey that drew over 2,600 responses from 14 partner institutions, as well as video recorded feedback from 100 Millennial participants who tested nonprofit social media approaches, mobile websites, digital presence, and marketing messages.

After email, Facebook is the method Millennials prefer to stay current on organization issues, the report says.

Eighty-three percent of Millennials use smartphones, it says, and the two major activities they perform on their smartphones are reading email and following organizations on Facebook.

Mobile friendly websites are the most important feature from organizations that Millennials want on their smartphones, and they actively follow up to five organizations in social media.

The top action Millennials take on websites is to connect to the organization’s social media channels.

Key reasons Millennials volunteer are from passion, to make a difference for a cause they care about, and to meet other people passionate about the cause, the report says.

The most popular peer fundraising approaches Millennials use are run, race and walk events, the report says, and Millennials increasingly prefer to ask for a donation to an organization rather than to receive personal gifts.

When Millennials make donations, the mainly use and prefer online websites, and they are more likely to donate when the organizations explains how the gift will affect an individual, the report says

— Todd Cohen

Online fundraising grows

Driven mainly by “recurring” donors and “repeat” donors, online fundraising grew steadily in 2012, a new study says.

Among roughly 500 organizations that sent 4.2 billion emails and raised $1.12 billion in 2012, online fundraising grew 27 percent from recurring donors and 20 percent from repeat donors, according to Blackbaud’s Online Marketing Benchmarking Study for Nonprofits.

A recurring donor regularly gives a specified amount over a set period of time, while a repeat donor is one that gives again after making an initial gift.

Open rates remained consistent with 2011, while click-through and response rates continued to drop, says the study, which included only organizations that had used Blackbaud’s Luminate platform for at least three years.

Response rates on appeals tell over 18 percent from 2011, a decline that reflects “a saturated channel with undifferentiated messaging and campaigns,” the study says. “This is present in direct mail, telemarketing and face-to-face solicitation.”

First-time gifts grew 3 percent while advocacy posted an increase of 8.7 percent in actions taken, and advocates who also made a contribution grew 11.9 percent.

Food Banks and organizations with smaller email files outperformed other “vertical” fields of interest on a median percentage basis, the study says.

Canadian organizations, higher education, hospitals, hospital foundations and Jewish organizations also posted strong performances, it says.

Those vertical performances”may be explained by the trend of donors becoming more cautious, and giving to charities to which they feel connected,” the study says. “There is a trend for this behavior, particularly with colleges, hospitals, and similar groups.”

Todd Cohen

Apparo brokers tech solutions for nonprofits

By Todd Cohen

CHARLOTTE, N.C. — The Mint Museum in Charlotte has a five-year strategic plan, including specific “deliverables,” along with tactics and assignments to produce them.

But different departments within the Mint tracked all that information separately, using Word or Excel documents, for example.

“Having a better, fully integrated system will help the departments collaborate around the deliverables,” says Kim Lanphear, executive director of Apparo, a nonprofit formerly known as NPower Charlotte Region.

After meeting with Mint officials, Apparo contacted CTS, a local technology consulting firm that is one of Apparo’s corporate partners, and brokered a three-phase project that has engaged two CTS employees who are working with the Mint as skilled volunteers to solve its problem of fragmented information systems.

And Duke Energy has agreed to fund the project, including the cost of Apparo’s consulting time to set the scope of the project, sit in on all project meetings, work to prevent “scope creep,” make sure deliverables are completed on time, and serve as the “go-to” player for the client and the skilled volunteers, Lanphear says.

Apparo — it takes its name from the Latin word for “provide” — works to “convene business solutions” for nonprofits, Lanphear says.

Its work with the Mint reflects a shift in its focus from providing technology consulting and training for nonprofits.

Formed in 2003, Apparo was one of up to 20 loosely affiliated NPower nonprofits throughout the U.S. that were supported by Microsoft and provided tech assistance to nonprofits in their communities.

Apparo, which operates with an annual budget of nearly $1.4 million and a staff of five people working full-time and five working part-time, also developed a line of business serving as the outsourced information-technology department for 27 local organizations, including United Way of Central Carolinas, Foundation for the Carolinas, Arts & Science Council, and The Duke Endowment, and many smaller agencies and foundations.

But Apparo recognized that its business model of providing help-desk services and managed services depended on generating enough volume to keep its rates low while supporting the level of staff know-how and skills it needed to deliver those services.

So this year, Apparo partnered with CDI Managed Services to work with any of its nonprofit clients that opted to work with CDI.

CDI now is working with 27 nonprofits that had been clients of Apparo, which is handling the billing for 11 of those nonprofits that are smaller, or those with fewer than 10 workstations each.

“We’ve been able to negotiate below-market rates for nonprofits,” Lanphear says. “We try to create sustainable models for these nonprofits.”

The model that Apparo itself is adopting grew out of a three-year grant of nearly $3 million it received in 2008 from the John S. and James L. Knight Foundation to develop collaborative solutions to nonprofit tech problems.

The new model focuses on matching the resources of skilled volunteers with the needs of nonprofits, facilitating the relationships, securing funding to cover its costs and those of the volunteers, or about $5,000 to $7,500 for each project, and making sure the nonprofit client also contributes funding.

“If they’re not invested,” Lanphear says, “they’re not as good about giving time and resources.”

Key to its model, she says, is to bring nonprofits together to talk about common needs and help them think about common solutions.

Another key, says Lindsay Jones, communications manager at Apparo, is “to inspire people who are part of the corporate technology community in Charlotte to partner with us to fund some of these engagements,” using the “skills they use every day in their jobs to make a difference in solving everyday business challenges that nonprofits face.”