Making Sure That the Clicks Stick

On-line holiday giving causes cheer, but keeping new donors is a challenge

Even though the holidays are long gone,

Maj. Bill Grein of the Marine Toys for Tots Foundation says it still feels like Christmas.

That’s because Major Grein, a retired Marine who serves as the charity’s chief fund raiser, has just finished tallying the results of the charity’s Internet holiday appeals. Toys for Tots raised $475,000 on line and garnered 42,000 toys — all from on-line campaigns that ran from Thanksgiving until Christmas.

Not only was that nearly 10 per cent of the $5-million the charity raised last year to distribute toys to needy youngsters, but Toys for Tots got other benefits: On-line companies paid to ship toys around the country. And all the Internet gifts have already been acknowledged through an automatic e-mail receipt system, saving Major Grein and his colleagues time and money that they traditionally have spent over the winter months sending thank-you notes to donors.

Toys for Tots is just one of many charities that profited from Internet gifts during the holidays. Numerous charities say the average size of gifts they received on line were bigger than those received using traditional techniques. What’s more, some charities said the majority of their on-line gifts came from people who had never previously donated — and who might eventually become loyal contributors.

“This is the first season where on-line giving has started to take off, and non-profits are finally seeing some ‘traction,’” says Richard Cox, chief executive officer of Entango, a San Jose, Cal., company that handles on-line credit-card donations for charities, including Toys for Tots.

But many charity leaders and Internet experts are not so sure how much staying power their on-line fund-raising efforts will have, at least in the near future.

Many say the real evidence of how well the holiday promotions did won’t come until much later, as charities find out whether the people who gave on line will make repeat gifts, or vanish into cyberspace.

Many charities, they say, cannot yet tell whether their on-line gifts are simply the result of Americans’ growing fascination and comfort with on-line financial transactions and the strong economy that is causing all types of giving to soar — or a sign that the Internet truly is building a bigger community of donors.

It may cost charities a lot of money and other resources to find out the answer to that question. While on-line fund raising has the potential to save non-profit groups big dollars in the long run, few charities are seeing real cost savings yet. Because on-line transactions still produce only a tiny share of gifts for most charities, the vast majority of non-profit groups are continuing to use on-line solicitations as a supplement, not a replacement.

Even though charities are spending money on technical and creative services to produce Web sites that have begun raising some money, most are also spending as much as they always have on direct mail, telemarketing, fund-raising events, and other traditional solicitations.

“We are not yet close to replacing the traditional means of raising money,” says Mark Rovner, who heads the on-line fund-raising division of Craver Mathews, Smith and Company, an Arlington, Va., direct-marketing consulting business with numerous charity clients. “It’s coming, but it’s not going to be next year. I would guess it’s going to be more like five years.”

Non-profit organizations will also have to change their approach and become more aggressive if they expect to maintain the progress they achieved during the holiday season, experts say. Among the reasons: Few charities are doing enough to bring people to their Web sites — or are providing compelling enough information to persuade visitors to give money and to do so repeatedly. “You’ve got to do a lot more than just process credit-card gifts,” says R. Rebecca Donatelli, co-founder of Campaign Solutions, an Alexandria, Va., consulting company. “This is not the field of dreams,” she adds. “Just because you build it does not necessarily mean they will come.”

Ms. Donatelli also says charities are falling behind other types of organizations in their use of the Net. For instance, she says that political candidates she represents are doing well with e-mail solicitations but that many of her charity clients are reluctant to try that approach out of concern that they may offend some people.

“What we are taking away from politics that we tell non-profits is that when people are in active e-mail relationships with an entity, their giving goes up,” she says. “There are not enough non-profits doing e-mail messaging.”

While charities have been criticized for not going far enough in their on-line appeals, their approaches to raising money on line are quite varied. Some groups are pinning their hopes on Internet shopping sites that give them a percentage of each item sold (The Chronicle, December 16). Others are optimistic about Helping.org — which was created by the AOL Foundation to channel gifts to any charity registered with the Internal Revenue Service — and similar Web enterprises that help donors find charities that match their interests. But those sites are not well-known and have yet to produce significant income for any one charity.

Instead, the charities that seem to have done the best on line in the final weeks of 1999 are those that relied on luring people to their own Web sites or enticing Internet users with special on-line promotions in their behalf by “dot-com” and other companies.

Among the success stories:

Toys for Tots. The charity says it raised $70,000 by offering credit-card transactions for the first time in late November and promising to give donors one airline frequent-flier mile for every dollar donated.

It also benefited from on-line toy drives held by eToys and Amazon.com. The companies offered customers the chance to buy discounted toys, then paid the shipping costs to deliver them to Toys for Tots.

Amazon.com also raised $320,000 in cash for the charity by offering to match dollar for dollar every gift consumers donated to Toys for Tots through the Amazon.com site. And eToys joined with Visa — the credit card that customers were required to use if they bought discounted toys for the charity — to make another cash donation of $85,000.

America’s Second Harvest. From November 29 to December 31, America’s Second Harvest, the food-bank network, got 220 donations through its Web site totaling $36,586, up from 70 gifts totaling $9,125 during the same period in 1998. One reason why it says more people went to its site: It participated in Hunger-Free Holiday (http://www.hungerfreeholiday.com) with Macy’s department store and FreeShop.com, which provides on-line shoppers with free products and other offers from companies. Second Harvest and its site were mentioned during coverage of Macy’s Thanksgiving Day parade — and such attention helped produce on-line gifts.

WNYC Public Radio. The New York station held its first “CyberDay” on December 15, broadcasting its Web address in on-air appeals to listeners, and it raised $33,000 in 24 hours — nearly one-third the amount it typically raises in one day during its on-air drives. In the last six months, the station has raised more than $148,000 on line, compared with just over $20,000 in the entire preceding year. “You can see it really shooting up now,” says Mikel Ellcessor, director of marketing. “The growth is off the charts.”

In addition to bringing money in quickly, holiday Internet returns have helped charities diversify their pool of donors.

Peggy Connolly, director of communications at Oxfam America, in Boston, says on-line promotions helped generate scores of gifts from people who had never supported the international poverty-fighting organization.

In the last six weeks of the year, she notes, Oxfam received $5,000 from an on-line promotion by Bluemountain.com, an Internet greeting-card company, and an additional $65,000 from gifts made on the charity’s own Web site. “This is a different group,” says Ms. Connolly of the donors. “About 50 per cent are new donors we haven’t reached before.”

Some groups report even higher percentages. Mark Rovner, of Craver Mathews, Smith, analyzed Internet gifts to six client organizations and found that over two-thirds of the donors, on average, had never previously made gifts to those groups.

Charities are also encouraged by the size of donations made on line.

WAMU, a Washington public-radio station, held a brief year-end campaign, starting in the second week of December, using on-air spots to broadcast the station’s Internet address and urge listeners to make a gift by December 31. The effort raised $20,500 on line, with an average gift of $106, compared with $85 from people who telephoned the station to make a gift.

For many charities, the best part about on-line gifts is that they are generally made by credit card. Fund raisers don’t have to worry whether donors will make good on pledges or remember to send in their check.

Another big benefit for charities that rely on donated products for their charitable works: Goods and cash arrive far more quickly than they do through traditional giving methods.

The San Francisco Food Bank was one of the three charities that benefited from the $730,000 raised in a promotion during the last two weeks of December with an on-line grocery service called Webvan. The food bank set up a wish list with the service, indicating which items it needed most. Customers could make one or more credit-card donations on the on-line grocer’s Web site. Webvan then used the money to buy food specified by each food bank and delivered it free of charge.

“What’s exciting is that it was so immediate,” says Gretta Wark, the San Francisco Food Bank’s director of development. “They called us for the first time on a Thursday. Within 24 hours, they had the giving opportunity up on their Web site, and within 48 hours, they were reporting gifts from individuals back to us.”

Still, the costs of raising money on line are not inconsiderable. For gifts to its own Web site, Toys for Tots gave 5 per cent of the amount raised to Entango for its handling of credit-card transactions and for sending receipts to donors.

Such fees are going to be just a small part of on-line fund-raising costs for many charities, says Mr. Rovner, the consultant. He says that even if organizations are able to cut back on expensive solicitation techniques, such as direct mail, they “are going to have the recurring costs of getting traffic to your site, whether you are talking about managing promotions with companies, buying or getting banner ads on other Internet sites, or getting print and TV ads.”

In addition, charities are finding that people who give on line are often quite demanding — and that dealing with them can be quite time-consuming.

“Once someone gives on line, they often want to know stuff, and they expect an immediate response,” says Kathleen Nixon, director of marketing alliances at the World Wildlife Fund. She says that her charity is getting up to 150 e-mail requests daily from supporters.

“We’ve tried to shift some resources into that, but people are pulling their hair out,” she says. “You can try to anticipate what the trends will be in this stuff, but typically you end up in a reactive mode. For-profit companies spend hundreds of thousands per year to support on-line businesses, and sometimes they don’t even get it right.”

The costs might all be worthwhile if charities start to see an increased share of their gifts coming from the Internet. But so far, even groups that have been the most successful say their on-line gifts are still only a small percentage of overall gifts.

WNYC in New York has raised $148,000 on line in the last six months — less than 1 per cent of all contributions received during that period. World Wildlife Fund says it is now bringing in $200,000 a year on line, but raised more than $73-million from other sources in 1998, the most recent year for which figures are available. And America’s Second Harvest says that it raised $980,000 from direct mail alone in December — far more than the $36,000 raised on line in the same month.

Not only are those figures a tiny share of overall giving, but many of the contributions came, at least partly, as a result of offering an incentive to donors — such as the chance to accrue frequent-flier points. Fund raisers say they worry that such donors might have more interest in getting gifts for themselves than in being loyal donors.

But some experts say the Web offers charities an opportunity to motivate even people who give on line for self-interested reasons. They urge charities to use the Internet to reach out to donors and get them interested in their organization’s work.

They say charities simply have to be more blunt about asking for help. Adam Corson-Finnerty, development director of the University of Pennsylvania Library and co-author of a book and a Web site devoted to on-line fund raising (http://www.fund-online.com) says charities should collect the e-mail addresses of anybody who gives on line and offer everyone who gives that way the chance to get more information from e-mail newsletters, electronic alerts, and the like.

“It can be as simple as adding a story of someone who made a gift to the e-mail newsletter and saying, ‘If you would like to do the same, click here.’”

But very few charities are currently using e-mail to ask on-line donors for repeat gifts, he says. Even organizations that have raised millions of dollars with the Internet are still ambivalent about whether they should use e-mail as a solicitation approach or find ways to attract people to their sites and hope they give.

The American Red Cross raised $2.5-million on line last year — probably more than any other charity, experts say — but it is among the organizations that is wary of sending e-mail solicitations.

“We know that people really trust the Red Cross, so we’re in serious thought about how to do this appropriately,” says Robert Guldi, the charity’s director of creative services. “We haven’t really decided what subsequent information to send to people. We don’t want to be too intrusive.”

Ms. Donatelli, the Alexandria consultant, hopes charities like the Red Cross will rethink that position. She notes that one of her clients, Arizona Sen. John McCain, who is seeking the Republican Presidential nomination, has raised $1.3-million on line, nearly 9 per cent of all his campaign contributions. Many of the McCain gifts, she says, are coming in response to e-mail solicitations to people who originally gave on the campaign’s Web site.

Ms. Donatelli concedes that some donors have been offended when they got a solicitation from a political candidate after signing up for e-mail updates. But the number of such donors is “really insignificant,” she says. “We are just not finding resistance to this.”

Of course, she adds, “You cannot just e-mail people saying, ‘Give to us again now.’ There has to be more to it than that. You need to invest them in your programs and give them good information that they want.”