Small Charities Find Online Giving Full of Rewards and Challenges

IN THE TRENCHES

By Kimberlee Roth

Street-Level Youth Media, a Chicago charity that provides free computer and

video technology to local inner-city young people, has maintained a Web site for its entire seven-year history. But two years ago, the group decided to try using the site to help it raise funds.

The charity gradually grew more sophisticated in its approach: First, Street-Level added a page to its site that included a donation form that supporters could print out and mail or fax. Then last year, the charity chose to work with Helping.org, which is now called Network for Good, a Web portal that collects donations on behalf of nonprofit organizations at no cost. Street-Level’s Web presence has generated interest from corporations, foundations, larger donors, and volunteers — but not a lot of money. Thus far, says Paula Kowalczyk, Street-Level’s development director, less than $1,000 in donations has trickled in.

But the organization is not giving up. Online giving, says Ms. Kowalczyk, is “an additional piece. It may not be the most successful for us at the moment, but everything helps, and it’s important to offer that option.”

While some nonprofit organizations have had success fund raising online, the concept hasn’t caught the fancy of most donors yet, according to a 2001 survey of donor expectations by the Better Business Bureau Wise Giving Alliance. Although six in 10 U.S. adults surveyed report that they have access to the Internet, only 6 percent say they have ever made an online charitable contribution of $10 or more. Less than one-fourth of respondents surveyed say they would consider making one in the future.

Yet, some small charities are not discouraged by the numbers. They say they are committed to incorporating online giving options into their overall fund-raising and communications strategies for the long term. Those charities that have made the plunge say that setting up the technology to enable online giving is relatively easy. Much more challenging, they say, is driving potential supporters to their Web sites, and making sure that online giving is an integral part of their overall missions.

Online Convenience

For Jenn Czelada, general manager of the Light, operator of two listener-supported Christian radio stations in Michigan, the move online has been smooth. In fact, sh is eager to expand her organization’s efforts. About 20 percent of donations to the Light are made electronically now. Ms. Czelada’s goal is 50 percent, if not higher, and it may be attainable: A recent survey of her listeners revealed that 40 to 50 percent pay the majority of their bills online, and only a small percentage were opposed to giving online, she says.

“I’d love it if every donation was electronic,” she says. “It saves time processing them. Realistically it doesn’t cost much more since the bank charges fees for every check deposited.”

The Light’s Web site is nearly six years old, and it has included an online-giving option, albeit a primitive one, almost from the start. (In the beginning, prospective donors could indicate interest online and a staff member would follow up by phone or mail.) As the organization’s pool of donors grew last year, Ms. Czelada started conducting research on fund-raising software, eventually choosing a product that offered a component that allowed online-donation data to land instantly in the organization’s database. The Light went live with its updated online-donation option in April, and promptly began promoting it on the air up to 10 times an hour, says Ms. Czelada. The Light also drew more supporters when it sponsored a contest on its Web site: At the bottom of the online entry form was a message reminding contestants that the Light is listener-supported. It informed them that while donations wouldn’t affect their odds of winning a free trip, the money would support programming. About 1,000 Light listeners registered online for the contest, and 100 made donations totaling nearly $2,500.

Success Factors

Not all organizations experience the same degree of success with online fund raising. The age of a charity’s donors and their level of comfort with technology may determine how well such an effort is received. The Wise Giving Alliance survey found that the youngest respondents — those ages 18 to 29, who have grown up with access to computers and the Web — are most open to the idea of online giving. According to data from the ePhilanthropy Foundation, in Washington, which provides information to charities that seek to raise funds online, the average age of donors who give online is 35 to 40. By contrast, research by the Mellman Group, public-opinion researchers in Washington who work with nonprofit clients, shows that the average age of donors who give via direct-mail solicitations is 66.

When expanding their efforts to reach supporters online, charities should adopt a definition of success that is broader than financial return alone, says Theodore Hart, president of ePhilanthropy Foundation. “Everything about e-philanthropy and the Internet is about relationships,” he says. “The question should be, ‘How effective are we at using the Internet to expand our ability to educate and communicate? ‘“

To be truly successful, online fund raising should be consistent with a charity’s current giving culture, says Michael Johnston, president of Hewitt and Johnston Consultants/HJC New Media, in Toronto, which aids nonprofit clients with technology and fund-raising issues. It is vital to have a plan for maintaining a relationship with donors over time, he says.

“It may feel like online donations are ‘free money, ‘ or that virtual donors aren’t somehow ‘real,’” he says. “But you have to treat them the same way you treat donors through other channels: You’re laying the groundwork for the coming decades of communication.”

The 18-year-old Daily Bread Food Bank, also in Toronto, has found a way for donors not only to give money but also to participate in stocking its shelves. A year and a half ago, it went live with its main Web site, which has attracted more than $31,000 in donations. In March, the food bank created another site to enhance the offline giving experience, GiveGroceries.com.

“People love to give us food,” says Jim Russell, the food bank’s director of public involvement and development. But monetary donations are actually more efficient for the food bank, given volume purchasing discounts and other factors, Mr. Russell says. Thus, with the help of a marketing consultant who donated his services, the charity created GiveGroceries.com as a way to meet both its needs and donors’ needs for greater involvement. Supporters “shop” at the site, designating precisely the items their funds should buy. The food bank tallies the cost of the items and collects their cash equivalent, which goes toward those items when the food bank buys its wares. The site has raised $15,000 from more than 400 donors so far.

Charities should consider the ways in which they can build online components into elements their organization already has, says Mr. Hart. Recipients of a charity’s direct-mail newsletter might be asked if they would like to register for an e-mail version, for example. Or an organization might try online event registration, or maintain calendars of events, gift shops, and even displays of items on its Web site. The Harold E. LeMay Museum, a car collection in Tacoma, Wash., that will be housed in a new museum in 2005, maintains an online database containing information about 800 of its cars. Visitors to the Web site can view some 20 of them, says Guy Tobin, the museum’s development director, but to see the rest they must become members, which they can do by clicking to another page.

Although only a few site visitors have joined in the two months that online membership has been offered, says Mr. Tobin, the museum feels that the strategy may pay off in terms of visibility. “We don’t have any expectations that it’s going to bring in a lot of gifts quickly,” he says, “but if we catch fire nationally, it’s an easy way for people to get ahold of us and join right there.”

In for the Long Haul

Online fund raising may be playing a minor role now in the way charities raise funds, but it will take hold, predicts Tim Mills-Groninger, associate executive director of the IT Resource Center, in Chicago, which offers technology help to nonprofit clients. The Better Business Bureau Wise Giving Alliance survey found the main barrier to online giving was discomfort in making online financial transactions — 46 percent of respondents cited this reason for not donating via Web sites. But, says Mr. Mills-Groninger, “As more and more people get comfortable with online transactions, giving may even join the ranks of common online transactions like [paying] utility bills and mortgage payments.” Some observers echo his optimism: By 2010, one-third of donated funds will be given online, according to research from Harvard University’s Initiative on Social Enterprise.

At the Light, Ms. Czelada has also been thinking long-term. “Now we’re really happy,” she says. “It’s become seamless [for donors] and second nature for us, and it’s setting us up for a capital campaign in late 2003, but getting here was tough.” The organization struggled with technology — its credit-card processing and fund-raising software didn’t work as smoothly together as initially expected, for instance. The glitches required Ms. Czelada to manually enter donations from supporters who give every month, and, before switching to new fund-raising software, she had to purge duplicates and lapsed donors from several of the Light’s databases.

Mr. Russell of the Daily Bread Food Bank agrees that patience is a virtue for any small-scale charity that tries to offer online giving options. And, he says, so is flexibility: Thanks to donated services, the food bank is working with two gift-processing organizations, two advertising agencies, and two Web-hosting companies. It needed all the help it could get: Until recently, no one on the food bank’s staff had the skills to edit or update the Web site.

“As you build the infrastructure, you’ll want to be in a position to control the elements,” says Mr. Russell. “But you start where you can start.”

Does your charity offer an online giving option for donors? Tell us about your success or challenges in the Fund Raising online forum.