Online Donations Make Gains

Charities see growing appeal of Internet fund raising

At the new Tiger Mountain exhibit at the Bronx Zoo, visitors can use a computerized kiosk to look up the animals’ favorite

foods or find out how much they weigh. Tiger fans can also type in their e-mail addresses to start receiving updates on activities at the zoo, the organization’s wildlife-preservation efforts, and other information.

The kiosk is just one of the many ways the Wildlife Conservation Society, which runs the zoo, is collecting e-mail addresses of current and potential donors. So far the organization has such contact information for 28 percent of its donors, a higher percentage than many of the other participants in this year’s Chronicle survey of online fund raising. Online gifts to the conservation society grew by 61.7 percent last year, to $653,779, in part because of the electronic messages it sends to contributors who have provided their e-mail addresses.

The conservation society was just one of the many big nonprofit organizations surveyed by The Chronicle that saw increased online donations, despite a slumping economy that is making fund raising difficult for many of the nation’s charities.

The 135 organizations in this year’s survey that reported their 2002 online fund-raising totals raised more than $124.5-million, including $63.4-million in Internet gifts to the American Red Cross in the wake of the September 11 terrorist attacks.

The 124 organizations that provided figures for both 2002 and 2001 raised $123.3-million in 2002, compared with $41.4-million the previous year. Forty-six saw their online fund raising more than double, and another 31 chalked up gains of more than 50 percent. Seventeen faced a decline in online giving, in most cases because the organizations did very little to actively promote such giving.

Reality Versus Hype

While many charities continued to see big percentage increases, few are expecting online donations to account for much more than a percentage or two of their total donations any time soon.

Mark Rovner, a fund-raising consultant in Arlington, Va., says 2002 marked the year when fund raisers started to get a handle on how electronic communications could play a role in their work based on several years’ worth of experience — while also understanding its limitations.

“There’s no longer this yawning gap between reality and hype,” he says. “The hype is gone, and the reality’s getting better. We’re seeing the Internet solidifying as an important supporting channel for philanthropy.”

Of the 135 charities that provided 2002 fund-raising totals in the survey, only 12 raised 1 percent or more of their total revenue online in the 2002 fiscal year. Internet fund raising accounted for 2 percent or more of total revenue for six of those 12 organizations.

Two charities raised more than 10 percent of their total revenue online. The United Way of Metropolitan Atlanta raised $10-million, or 14 percent of its total revenue, mostly through on-the-job campaign pledges processed online. Heifer International, in Little Rock, Ark., raised more than $4.9-million online, 11 percent of its total revenue.

Among the ways charities are using e-mail and the Internet to support their other fund-raising efforts:

• Advocacy groups are sending direct-mail appeals to online activists.
• International child-sponsorship groups are using television and other advertisements to persuade people to make monthly contributions through their Web sites.
• Health charities that organize fund-raising walks, runs, or other events are giving participants the option of creating customized Web pages that their friends and families can use to donate money to their fund-raising effort.

E-Mail Addresses

Last year, many nonprofit groups made headway in collecting e-mail addresses of their donors. Of the 82 organizations in the Chronicle survey that reported the percentage of their contributors’ e-mail addresses collected, the median was 10 percent, meaning half of the charities had a higher percentage and half had a lower one.

Only nine organizations said they had e-mail addresses for 50 percent or more of their donors, six of which were colleges and universities.

The Massachusetts Institute of Technology, in Cambridge, Mass., and the Robert W. Woodruff Arts Center, in Atlanta, topped the list with 75 percent each.

On the low end, the Brother’s Brother Foundation, in Pittsburgh, and the Evangelical Lutheran Church in America Foundation, in Chicago, both said that they have e-mail addresses for 0.5 percent of their donors.

The value of an e-mail address for raising money, however, is still unclear.

For example, Amnesty International USA, in New York, which reported that it has e-mail addresses for 10 percent of its donors, has found that fund-raising e-mails to people who receive the group’s advocacy alerts are not particularly effective. But the charity has done well when it sends direct-mail appeals to those people who, at Amnesty’s request, have asked government officials to release political prisoners. Currently 200,000 people have signed up to receive Amnesty’s advocacy alerts.

Vivianne Potter, a fund raiser at the charity, says that the postal list of online activists brings in two to three times more money than any of the other lists Amnesty uses to send direct-mail solicitations to people who haven’t previously given to the group.

She believes fund-raising e-mails don’t do well because people signed up online for a specific reason — to receive action alerts.

Also, “when they get the package in the mail, it has a lot more information about what we do, and reinforces the importance of what they’re doing by their actions online,” says Ms. Potter. “It can do that in a more direct and emotional way, so they tend to respond pretty well to that.”

Similarly, the American Society for the Prevention of Cruelty to Animals, in New York, has had better fund-raising success sending a postal appeal to people who registered online with an environmentally conscious shopping site than it has had trying to encourage users of the site to give in response to online promotions of the charity.

The shopping site, CARE2, promotes charities such as the ASPCA and offers shoppers the option of getting more information from the organizations. Jo Sullivan, a senior fund raiser at the ASPCA, says an appeal to potential donors sent via postal mail to CARE2 members produced donations from about 1.5 percent of the 50,000 recipients.

The average gift size was $25, compared with the average gift of $19.74 made to other lists that the ASPCA uses to attract new donors.

Postal Mail

While some organizations are using direct mail to woo online activists to become first-time donors, other groups are using postal letters to encourage their loyal donors to visit their Web sites and make gifts online.

The Wildlife Conservation Society sends postal letters to donors asking them to consider renewing their gifts to the zoo online. Not only do the online donations come in more quickly than mailed responses but they cost less for the society to process, but they also provide a way for the organization to learn more about its donors’ interests.

“By giving online, it’s easier for us to start a relationship,” says Kathleen Allard, the organization’s membership director.

Naral Pro-Choice America, an abortion-rights group in Washington, believes that encouraging its direct-mail donors to make online gifts will ultimately increase the amount those donors will give the organization during their lifetimes.

An analysis of Naral’s fund-raising data over the last 12 years found that people who give the most during their lifetimes are the donors who increase the size of their gifts during the first year they support Naral, and those who make contributions several times a year.

Jennifer J. Donahue, a fund raiser at the organization, thinks that encouraging direct-mail donors to make online gifts offers one of the best ways to increase both the size and frequency of gifts.

In the 2003 fiscal year, which ended March 31, the average online gift to Naral was $50, up from $40 in the 2002 fiscal year, and considerably higher than the $26 average direct-mail gift in 2003.

But some fund raisers question whether using Web donations to get people to increase their gifts is the best strategy, or if it is better simply to get more people in the habit of giving online.

Tom McGuire, vice president of membership programs at the National Wildlife Federation, in Reston, Va., says he believes getting more people donating — even with smaller average gifts — means more money coming in to the organization. “Sometimes it’s more productive to actually ask for gifts that are comparable to what you see in the direct mail,” he says.

Monthly Donor Programs

Charities have also found that the Internet can be a strong complement to their monthly donor programs. Groups that use public-service advertisements and other promotions to reach donors have found the Internet to be a good way to get those donors to set up a recurring gift, usually one that is charged to a credit card each month.

Christian Children’s Fund, an international relief group in Richmond, Va., has attracted 15,000 people to become online monthly donors, contributing a total of $6.6-million dollars since it began to offer the online option in September 1999. In the 2002 fiscal year, the 5,044 new child sponsors who set up their monthly gifts online represented 14 percent of all new monthly donors that the charity recruited that year.

In addition, Christian Children’s Fund pays search engines to ensure that its Web site appears as one of the top links in search results when users type in the organization’s name or use terms like “international child development,” or countries in which the organization works.

The charity pays a small fee each time someone searches on one of its terms, and clicks through to its Web site. The cost of search-engine promotions varies, depending on the number of organizations or businesses competing to get attention on the same search-result pages, according to Heather Fignar, manager of interactive communications for Christian Children’s Fund. She says that the strategy is a cost-efficient way to drive traffic to the site, and makes it easy for people who have seen one of the charity’s television advertisements to find the organization.

Says Ms. Fignar, “The beauty is that if a word isn’t working for us, we don’t pay for it.”

World Vision, an international-development organization in Federal Way, Wash., has had similar successes. In the 2002 fiscal year, about 7 percent of all new monthly sponsors — or 10,000 people — set up their recurring gifts through its Web site.

Donors who call World Vision in response to one of its television commercials to sponsor a child tend to give less over time than people who set up monthly gifts through the Web site. Steve Stirling, a vice president who oversees marketing for the charity, estimates that lifetime giving for the average Internet sponsor is around $2,000, while the average monthly donor who responds by telephone gives $600.

Mr. Stirling attributes the difference, in part, to the ease of setting up an automatic credit-card donation through a Web site, compared with the hassle of mailing a check each month.

But he also believes that some people who call right after seeing a television advertisement may be responding to their emotions at the time and may not have thought through the commitment that they are making. Donors who make their gifts online, he says, have given more thought to what they are doing.

“When they do it through the Internet, they’ve gone through the research, and they’ve seen what we’re all about,” says Mr. Stirling. “It’s much more of an intentional decision.”

Charity Events

Charities also have found that the Internet can make fund raising easier for participants in the walkathons, bicycle races, and marathon programs that they organize.

The Y-ME National Breast Cancer Organization, in Chicago, uses its online fund-raising system to allow participants in its annual Mother’s Day race and walks to send e-mail messages to friends and family members asking them to visit a race Web page they had personalized, often with photographs and a message about why they are running in the race. Once at the site, visitors can make a donation in support of a participant’s fund-raising goal.

One of the biggest advantages of emphasizing Internet fund raising this year has been that the money is coming in sooner, which in the weeks leading up to the race allowed Y-ME to better monitor the event’s progress, says Margaret C. Kirk, the organization’s chief executive officer.

“In an event like this, you may have a lot of people who just pay the minimum registration fee and that’s all they do, but other people make it a real cause, and they go out and raise $8,000,” says Ms. Kirk. “But you don’t have a sense of that unless you get that money turned in ahead of time.”

Less than two weeks after this year’s race, the charity had collected $1.5-million, compared with the $1.1-million that Y-ME collected in the first month after last year’s event. More than $600,000 of that came in online, $350,000 more than was received electronically for last year’s race altogether. The organization expects the race to raise more than $2-million of its $5-million annual budget.

The Internet is also making it easier for Y-ME to run the event. With more participants signing up online, the nonprofit organization was able to cut back on the number of registration tables it set up around the city, and reassign the volunteers who would have staffed those tables to other tasks. Y-ME also expects to cut its data-entry costs by 25 percent this year because online donors typed in their own information as they made gifts on the Web site.

Local offices of the American Lung Association have also used the Internet in their fund-raising events. For example, in February, when the American Lung Association of Metropolitan Chicago held a stair climb to the 94th floor of the John Hancock Center, a little more than half of all donations and registration fees came in through the Internet — more than $214,000 online compared with $201,000 offline.

Online tools take some of the fear out of asking people for money, and make it easier for event participants to raise more money, says Rusty Burwell, a top official at the American Lung Association, in New York.

As an example, Mr. Burwell points to his own experience walking in the American Lung Association of New Jersey’s Blow the Whistle on Asthma walk in September. In less than an hour, he set up a Web page and sent e-mail messages asking for support to 40 people. In a day and a half, Mr. Burwell met his initial fund-raising goal of $500, which he then raised to $1,000.

“If I had had to contact all of those people individually by phone, I probably wouldn’t have,” says Mr. Burwell. “If I had had to write a personal note and mail it to all of them, it would have taken longer and I probably wouldn’t have done that.”

Stanley W. Krauze and Marni D. Larose contributed to this article.