New Data Shows Online Fundraising’s Tremendous Growth — Plus 3 Predictions
Donor generosity followed a familiar path for when disaster strikes. A new study from Blackbaud found parallels between the pandemic and natural disasters, like Hurricane Sandy in 2012 and the earthquake in Haiti in 2010; however, in 2020, the disaster, or the COVID-19 pandemic in this case, disrupted usual fundraising channels as well. Enter the acceleration of online fundraising.
One-time online giving grew 15.6% last year, according to the study. Within that, recurring donations continued to outpace one-time gifts despite the pandemic and email communications played a huge role in the success of online fundraising.
The study reviewed aggregate data spanning 2018 through 2020 from 908 nonprofits that all had those three consecutive years of data. Those organizations collectively raised $1.8 billion online via 24 million transactions and sent more than 3.9 billion emails over the last fiscal year.
Here are three predictions from Blackbaud regarding the online fundraising trends it found and how those trends will continue to impact future online fundraising efforts.
1. Online Fundraising Has Staying Power
Prior to 2020, both online transactions and first-time donors steadily declined. Last year, that changed with one-time online giving jumping to 15.6%. In comparison, total giving grew 2% last year.
The Los Angeles Regional Food Bank received $20 million more online donations in 2020 over the previous year. Food banks topped all other sectors last year with an astounding 453% overall online revenue growth, a stat peaking at 2,813% year-over-year for April. On average across all sectors, one-time gift size grew 3.3% to nearly $170, with its peak month occurring in May, which saw 44.9% higher revenues.
“A new, but familiar giving day, Giving Tuesday Now on May 5, may have helped drive this increase by nudging nonprofits hesitant to fundraise during the pandemic, highlighting struggling nonprofits, and rallying donors to give generously to causes they support,” the report added.
Additionally, virtual events will help to further fuel this category. Direct Relief created landing pages for celebrities, like Diddy, who raised $3.7 million through a Team Love Dance-A-Thon on Instagram.
All of this shows that online fundraising will not fade away. Blackbaud predicted successful nonprofits will create opportunities for major donors to give online and evolve online fundraising beyond email with options like text-to-give, digital ads and direct response TV.
2. Email Shows Strengths
Children’s Hospital Colorado Foundation had success keeping its email subscribers informed about what the nonprofit was accomplishing in the midst of a pandemic, Keri Kallaway, senior director of donor relations and gift services at the nonprofit, said.
“We asked one of our program leaders to record a thank-you message to share how her program is making an impact on families and caregivers during this pandemic,” she said. “The video was recorded on her phone – at no cost. In addition to her video, we created a simple slideshow of images that showed her program at work. We emailed this video message to supporters of her program and received a 57.5% open rate. Zero unsubscribes. And many responses of thanks and how great it was to see how they are helping so many people.”
Overall, nonprofits sent 13.9% more emails resulting in 42.4% more revenue last year over 2019. Meanwhile, email conversion rate rose by 17.9% whereas unsubscribe rates decreased by almost 10%. Total click throughs increased by 29% year-over-year, with conversion rates rising by 17.9%. Emails on file rose 7% though those opted into email only rose 4%. The reasons behind that could be numerous, but Blackbaud credited this to improved email files.
“A reduction in the usable percent of [an] email house file may also relate to careful data hygiene efforts,” the report noted. “Removing non-performing email addresses or cleaning data for validity may also show this metric in the negative, but it results in a higher performing list overall.”
Nonprofits relied on email communications to make up for their inability to meet their donors in-person and host live events. Regardless, Blackbaud predicts nonprofits will continue their current level of reliance on email through at least 2022.
3. Recurring Giving Keeps Growing
The study found that one in 40 online donors is a recurring monthly donor. Though still a statistically small percentage, recurring giving continues to have year-over-year strides, growing 17.9% last year. In comparison to one-time giving, which saw sharp declines during 2020 as well as large spikes in May-to-June and November-to-December timeframes, sustained giving consistently grew 14% to 20% each month in 2020.
“This was on the heels of month-after-month growth in 2019,” according to the study. “This data suggests that sustainer giving is a key strategic component for donor file health for a broad range of organizations.”
Blackbaud recommended organizations capitalize on recurring giving trends via auto-responders, an online portal for donor contact and payment information updates, and customized online donation forms.
Though some studies saw a decrease in monthly giving, this one did not. In fact, this study found that recurring giving outpaced one-time giving for the ninth straight year, a trend Blackbaud doesn’t expect to waver any time soon.
“While much of what we saw in 2020 was directly related to the pandemic, our Blackbaud Luminate Online data reveals some very positive trends in online fundraising that I think we will continue to see,” Steve MacLaughlin, vice president of product management at Blackbaud, said in a statement. “The spike in email fundraising revenue shows there continues to be significant potential in this channel, and the organizations who have focused on their data and sender reputation will thrive. There is still [an] incredible opportunity for growing revenue through sustainers, who have a stronger retention rate and long-term value.”