U.S. Nonprofits’ Ineptitude at Online Fundraising Is Costing Them

Many big U.S. charities are leaving significant money on the table because of their ineptitude in online fundraising, a new study has found.

Dunham+Co., a consulting outfit, and Next After, a fundraising think tank, analyzed the online practices of 151 charities, of which 100 appeared on The Chronicle of Philanthropy’s Philanthropy 400 largest organizations.

They wanted to find out how well nonprofit groups were keeping pace with changes in the current fundraising environment.

Online giving by charitably inclined Americans has been the most successful fundraising channel over the past 10 years, growing by double-digit rates and now exceeding $20 billion annually, Steve MacLaughlin, director of Blackbaud’s Idea Lab, wrote in a sidebar comment on the study.

Researchers went online to the 151 nonprofits to experience, document and assess 46 different metrics across four online fundraising processes.

Their findings include some bits of good news, startling deficiencies and areas that need improving.

The study first looked at the email registration process, positing that how an organization grows its email database is critically important. It noted that many other studies had shown that the more email addresses an organization has on file, the more money it can raise online.

Researchers found the following:

The study’s second area of focus was email communication, split into two components: the Email Message Envelope (To Line, From Line, Subject Line) and Email Message Body.

The frequency and manner in which charities communicate with donors are big factors in deciding the success of online fundraising, the researchers said.

The news was not good:

MacLaughlin commented: “Email addresses are like fish — they don’t age well.”

The online donation experience, the third study area, had more positive results.

Giving a gift online is very different from ordering a product online, the researchers said. Organizations that understand this subtle difference move closer to an optimized online giving experience.

They found the following:

Finally, saying “thank you” would seem a no-brainer for organizations that are primarily supported through the charitable contributions of individuals. Researchers wanted to make sure.

They found that 99% of charities understood the importance of thanking a donor. However, there was still room for improvement: 63% did not offer a donor “next steps” to take.

“These findings suggest there is a significant gap between best practice and the standard practices currently being used by nonprofit organizations,” MacLaughlin wrote.

“The pace of change will certainly only increase as mobile and social interactions continue to grow. There is a significant opportunity for nonprofits to increase their fundraising results by making some simple but important changes.”