Forging Links Online

Charities test new approaches to wooing donors on the Internet

Heifer International, a charity in Little Rock, Ark., that gives livestock to needy families in developing

countries, raised $3.2-million online last fiscal year — enough to buy a lot of sheep, goats, and water buffalo. This year, the charity expects its online giving to grow to $5-million — 10 percent of the amount it raises from private sources.

But even Heifer International — a five-year veteran of online fund raising and one of the most successful charities at connecting with donors over the Internet — is careful not to overstate the potential of electronic giving. “Is it going to become a much larger percentage of our overall fund raising? It’s hard to say,” says Mike Matchett, Heifer’s director of marketing. “We want to be poised for growth in that area, but it’s such a crystal ball.”

Charities throughout the nonprofit world share both Heifer’s confidence and uncertainty as they look to the future of online fund raising. They are buoyed by online-giving totals that are climbing at significantly higher rates than overall fund raising, even in the midst of a sluggish economy, and by the more than $215-million that was donated online by people who wanted to help victims of the September 11 attacks. But they also know that despite claims that the Internet would revolutionize fund raising, electronic giving still accounts for a tiny percentage of overall contributions.

$96-Million Raised

Determined now to take a sober, measured approach to their online fund raising, nonprofit organizations are seeking ways to tie their online and offline fund-raising efforts, testing new techniques, and building their technological capabilities, with an eye toward assessing and evaluating their results.

A new Chronicle survey shows that 126 large charities raised more than $96-million online during the 2001 fiscal year. (The survey included very little of the money that relief organizations raised online after September 11 because the disaster occurred during many organizations’ 2002 fiscal year.) Electronic gifts more than doubled from 2000 to 2001 for 48 groups in the survey, and another 27 saw growth rates of more than 10 percent. Still, only 11 charities raised 1 percent or more of their total revenue online.

Because online donations still make up such a small percentage of most groups’ overall fund raising, it is easier for charities to be creative in figuring out what approaches work best for them, says Kurt Hansen, founder of CharityWeb, a company in Kensington, Md., that processes online donations for nonprofit organizations. “It’s very good at this early stage to experiment — to test things out, see what works and what doesn’t,” says Mr. Hansen. “Later on it will be harder to experiment because you’ll have more money at risk.”

Among the new techniques drawing the most attention — and in some cases raising the highest expectations — are efforts to increase fund raising both on the Internet and off by linking e-mail and direct mail.

Earthjustice, an environmental charity in Oakland, Calif., has started to experiment with e-mail as a way to increase the percentage of people who give in response to direct-mail appeals — and to get some of them to do so by giving online.

In January, as the organization sent direct-mail appeals to its 116,850 donors asking them to make gifts to renew their memberships, it also sent e-mail messages to the 9,287 donors for whom it had e-mail addresses. The message alerted them that the appeal and their membership cards were on the way, said that the organization had made it easy for them to renew online, and included a link that took donors to the group’s donation page.

The appeal exceeded the organization’s goal of $700,000, with more than 15,500 gifts totaling $763,331 coming in through the mail and 137 donors making online contributions totaling $8,145.

Adelaide Roberts, Earthjustice’s director for public support, says that the organization was pleased with the results, and relieved that the online gifts didn’t seem to come at the expense of mail responses.

“We don’t want to discourage people from giving in either medium,” says Ms. Roberts. “This is something we are keeping our eye on, but in that case, we were fine.”

Earthjustice hopes to increase the percentage of donors for which it has e-mail addresses. In December, for example, the group sent a postcard asking donors for that information. The 3,089 who responded were entered in a drawing for an Earthjustice fleece vest.

Trying Different Approaches

Other organizations also are exploring ways to use e-mail to reinforce the effectiveness of their direct-mail campaigns.

Amnesty International USA, in New York, is testing whether sending e-mail messages to donors either right before or right after they receive a direct-mail appeal increases the percentage who give. The organization also is examining whether the rate at which donors respond to the technique varies based on whether the donors first gave to Amnesty online or through the mail.

In July, the Nature Conservancy, in Arlington, Va., will begin sending e-mail renewal appeals to donors who have previously made online contributions. If they do not respond to the e-mail message, the organization will follow up with a postal appeal.

Noelle Wagner, the Nature Conservancy’s director of interactive marketing, says that sending renewal appeals by e-mail is a better use of natural resources and money than sending them by mail, something the organization hopes it will someday be able to phase out.

Deluged With E-Mail

Mark Rovner, senior vice president at Craver, Mathews, Smith & Company, a fund-raising consulting company in Arlington, Va., worries that groups like the Nature Conservancy may be disappointed by the results of their attempts to ask donors via e-mail for additional gifts.

The chief reason: People who are most likely to give online are already inundated with electronic messages.

Research that Craver, Mathews, Smith has conducted for its clients shows that online donors are highly skilled Internet users, many of whom turn to the Internet for banking, paying bills, and buying groceries. Because the Internet plays a larger role in the lives of online donors than it does for more casual Internet users, Mr. Rovner speculates that online donors receive so much e-mail, they might overlook charities’ e-mail appeals.

“There’s a very high noise factor in resoliciting these individuals via e-mail,” says Mr. Rovner. “The results we’ve seen so far suggest that direct mail may indeed be a better way to reach people who originally give to you online than e-mail.”

Advocacy Efforts

As charities test the effectiveness of using e-mail and direct mail in tandem, other groups are looking at ways that their Internet advocacy programs can complement and strengthen their online fund-raising efforts.

Many organizations that accept online donations also use e-mail and the Internet to spur activism, but few do both at the same time. The National Abortion and Reproductive Rights Action League, in Washington, however, sees its Choice Action Network as being intimately connected with its online fund raising. Each e-mail alert that the organization sends to activists asking them to contact their legislators, sign an online petition, or attend an event also includes a request for a donation.

“They’re taking an action to help do something that they believe in, and by doing that they’re at the very height of their interest in Naral,” says Vinnie Wishrad, the organization’s director of membership. “We hope that because their interest is so high that they’d be willing to make a gift at that time.”

The organization also sends straight fund-raising appeals to its online activists. In March, it sent an e-mail solicitation that detailed a matching-gift opportunity to the 87,000 members of its action network, bringing in about $36,000 online. Three hundred contributions were from first-time donors, and the average gift was $41.50.

Concern Over Privacy

In a move that has stirred controversy in some parts of the nonprofit world, a small but increasing number of nonprofit organizations are taking a page from the direct-mail playbook and using rented lists of e-mail addresses in their quest to find new online donors. Nine of the 197 nonprofit organizations that completed The Chronicle’s annual survey reported that they had used e-mail addresses from a list broker in online campaigns designed to attract new contributors.

Because many Internet users are concerned about their online privacy, nonprofit technology experts and charities are divided about the propriety and usefulness of such lists.

Moreover, nonprofit organizations that have used rented lists have had mixed results.

In 2001 the Arthritis Foundation, in Atlanta, began using rented e-mail lists to recruit participants for its Joints in Motion program, a marathon-training program in which participants agree to raise a set amount of money for the foundation.

Last year, 1.2 percent of the people who received the e-mails requested more information about Joints in Motion, compared with 0.8 percent of the people who received direct-mail letters. The e-mail lists that the organization has used this year haven’t performed as well, though final figures were not available.

Sara A. MacLeod, who oversees Joints in Motion, says that the flexibility that e-mail’s quick turnaround affords makes it an ideal way to reach out to new people. If overall recruitment were down, says Ms. MacLeod, the foundation could plan and conduct an e-mail campaign within a week. By comparison, a direct-mail campaign would take at least six weeks.

Faced with a situation in which time was similarly tight, America’s Second Harvest turned to a rented list, and was disappointed with the results.

Last spring, potato growers in Idaho donated 20 million pounds of potatoes to the Chicago organization to be distributed through its nationwide network of food banks. To help raise money to transport the potatoes, the organization sent an e-mail appeal to 40,000 people whose e-mail addresses it had rented.

Terri Shoemaker, the group’s manager of direct marketing, says that although the charity’s online tracking capabilities weren’t very sophisticated at the time, she knows that fewer than 50 people clicked on the link in the e-mail to go to the special Web site Second Harvest set up for the potato campaign, and she doesn’t think that any of them made a gift.

At the same time, though, the organization sent the e-mail appeal to 5,000 past donors and people who had subscribed to the organization’s e-mail newsletter. That much smaller group came through with $15,000 in online contributions.

The campaign helped the organization see the fund-raising potential of the e-mail addresses it already had, says Ms. Shoemaker.

“These are people who have come to our site and said, ‘Yes, I want to be informed about this issue in the future,’” she says. “We have so much work to do with those who have prequalified themselves that I think it’ll be a while before we approach an outside list.”

Making Investments

America’s Second Harvest took in $188,173 online during its 2001 fiscal year, and with a month left in the 2002 fiscal year, the organization already has tripled its $200,000 goal for Internet giving.

In the past, the charity cobbled together a variety of technology systems to conduct its online fund raising, which made it difficult to track response rates. By putting a new unified system for online fund raising in place, says Ms. Shoemaker, the organization will be better able to assess the effectiveness of its campaigns and to focus on strategy, rather than on making the technology work.

With the growth that the organization has seen in online fund raising, particularly from 2001 to 2002, it only makes sense to strengthen the technology infrastructure, says Ms. Shoemaker. “We’re looking at a revenue category that’s making more than a half-million dollars. Making an investment in it is an obvious thing to do to make sure that we can grow it at that same rate,” she says.

Economy of Scale

Other nonprofit organizations are coming to a similar conclusion, both for themselves and for their affiliates.

Special Olympics, in Washington, has set up an online donation system in which the national office processes and distributes electronic gifts on behalf of its local affiliates. For example, the online donation link on Special Olympics Minnesota’s Web site takes donors to the contributions page on the national Web site, and Minnesota is already marked in the section of the form donors use to designate where their gift will go.

Connie Grandmason, a senior manager at Special Olympics, says that the online-donation program is similar to the centralized direct-mail program that the organization runs for its affiliates. Both programs take advantage of economies of scale to bring down the cost of fund raising, and the online-donation program allows chapters that don’t have technology employees to accept Internet gifts.

Perhaps the greatest benefit of the centralized fund-raising programs, says Ms. Grandmason, is that they give local staff members time to follow up with donors. “We can take the administrative part off of their backs, and they can focus on building the relationship,” she says.

Last May, United Jewish Communities, in New York, introduced FedWeb, a system that enables its local federations to build interactive Web sites without requiring them to have Web-design skills. The online-donation component of the system, which has been available since February, is managed centrally, which means that United Jewish Communities can process credit-card transactions for all the participating federations using just one account.

FedWeb cost $1.5-million to develop, and 44 of the organization’s 189 member federations are using the system, with another 17 scheduled to start soon.

Easter Seals, in Chicago, has spent a little more than $1-million on a database system that will allow the national office and its affiliates to collect information about the people who interact with the organization online — such as by signing up for e-mail newsletters, making online contributions, or responding to advocacy alerts — and integrate that information with the Easter Seals’ database of direct-mail donors.

Shirley Sexton, the organization’s director of Internet marketing, believes that the new system will ultimately allow Easter Seals to better coordinate its online and offline fund raising and to build stronger ties with its donors.

The tricky part, she says, was for the organization to move forward on such a project knowing that it would take a considerable amount of time to see a return on its investment.

“The difficult thing is getting buy-in from the whole organization when you’re saying, ‘We have to spend a lot of money up front and the payoff will come in a couple of years,’” says Ms. Sexton. “That’s hard for an organization to do.”

Marni D. Larose and Martha Voelz contributed to this article.