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Wednesday
21Jan2009

Everything You Wanted to Know About Online Fundraising in a Bad Economy

Lets be frank, daily doom and gloom reports about the economy are scary. Nonprofits are facing challenging times with leaner resources.

“The year-end fund-raising results last month confirm what we already suspected: for most people giving is not a luxury but a natural extension of who they are,” said Mark Rovner, Founder of Sea Change Strategies. “Many groups received significant numbers of gifts this past December, but the average size gift amount dropped, especially at the higher end.”

The big question on every fundraiser’s mind these days is this: How can an organization sustain and even increase their online donations in a recession? While there is no magic formula, the best practices for online fundraisers right now lie in a solid communication strategy and philanthropy fundamentals. Two of the biggest takeaways from Obama’s incredibly successful fundraising campaign were to: 1) embrace low dollar donors; and 2) make the case that donors are part of a movement.

The Obama team quickly recognized that many people just couldn’t afford to donate $50, yet still wanted to support and contribute to the campaign. Nonprofits can easily use a similar strategy by setting donation limits at $5 or $10 -- or not even having a limit. This tactic makes low dollar donors feel valued and part of an organization, even if they don’t have a lot of money to contribute. It also builds good relationships. As these donors earn more money, they will increase their donation amounts.

 

It’s also important to give donors a sense of mission and purpose. Given the bad economy, make the case that if they donate money to your organization, you will do something concretely to improve their lives. Give them the sense that they will get more back than they are giving.

 

Below are some of Mark's ideas for nonprofits to consider.

 

Mark Rovner’s Best Tips To Boost Your Online Fundraising Program in 2009

 

  1. Don’t stop asking. The people who really care about what you do will continue to give, but they may continue to give less. Go easy on the “poor-mouthing,” and continue to talk about things that are most important to your cause.
  2. Focus most of your energy on the folks who already love you. Don’t stint on cultivation. Let your donors know how you are coping, the choices you are making, and what you are getting done.
  3. Re-project online income now. We are seeing organizations whose income projections are the product of happier times. Don’t panic by dramatically ramping up the number of hard ask e-mails -- to the exclusion of almost everything else. Not only is that unlikely to work, it is likely to antagonize people who are sympathetic to your situation. You need to buy yourself a little bit of breathing room.
  4. Focus. You don’t have money to mess around with right now. Use this moment to review your core messages, your founding story, and your best words to describe the very essence of what you do.
  5. Be ready with “evergreen” fund-raising tactics – emergencies, donor match drives, etc. What works in normal times will probably work now, just with more modest results. Experiment with a closed-ended sustainer drive asking those who can to make a one year monthly commitment.
  6. Plan for success. As things get better – and they will – how will you communicate these changes to your donors, how will you recognize and thank them for helping you through these tough times? Perhaps you can empower them to serve as ambassadors for your cause when economic times are better.

Do you have some great tips to share that have proven successful for your organization’s online fundraising program over the last few months? Comment below!

 

PS: Be sure and check out the OneWorld webinar Nonprofit Survival 101, Planning for Tough Economic Times on January 29th at 3:30 PM EST with Marty Kearns, Executive Director of Green Media Toolshed, Jennifer Pryce, DC Director of the Nonprofit Finance Fund, Jono Smith, Director of Nonprofit Marketing at Network for Good, Heather Mansfield of DIOSA Communications and Robert Enholm, Vice President of Citizens for Global Solutions.


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Reader Comments (4)

Great post. I wonder if, in the current economic downturn, we will see more non-profits encouraging the use of micro-donation services like Tipjoy that spread out the processing fee and make small payments to causes, content, etc. more feasible.
January 29, 2009 | Unregistered CommenterKate Talbot
I am not so into measuring metrics. I prefer engagements that one can measure in dollars. In the Non-profits world one of the biggest challenges is to tap into those people who are either not "onboard" or who are "onboard" but not really participating. 90% of the message only reaches those that are already "onboard" (resulting in preaching to the choir) And, with non-profits, more than any other vertical, organizations depend on WOM (word of mouth) to get more people onboard and to broaden the base from which they can solicit donations. Too often, charitable institutions are too focused on 'donations' and not focused on BUSINESS. It is a business and the business needs revenue. Revenue can come from other sources besides donations. The internet "revolution" opens many new possibilities and the evolution of social media and ecommerce is now particularly suited new methods of revenue generation for Non-Profits. For example, online shopping sites that pay cash back can generate 10s of 1000s of dollars if large memberships use them regularly. Getting the memberships to use them can be a challenge and adding a ning.com community site enhancement and an IM tool like skype or yahoo so that members can shop together can enable non-profits to direct their memberships and orchestrate them to use the shopping portal. The ability to create contests and pass out kudos enables the non profit to help the members to change their shopping and benefit the charity.
February 7, 2009 | Unregistered Commentervictorseo
Thanks for your comments Victor. I think the following is an interesting perspective. "Revenue can come from other sources besides donations. The internet "revolution" opens many new possibilities and the evolution of social media and ecommerce is now particularly suited new methods of revenue generation for Non-Profits."

I don't feel nonprofits can raise much revenue from social media today. Of course as the Web 2.0 world evolves that could change. These days it takes a huge amount of staff resources and time to raise money online using social media. As you know, raising money is a numbers game so any organization that wants to experiment with fundraising through Web 2.0 needs to have a large following and active presence on online social networks. You also need to invest time promoting the campaign. When you figure out the hours it takes to raise $10K through a twitter campaign verses sending out an online fundraising appeal to your list, using traditional online fundraising practices is much more economical. However, there are opportunities to enhance your online fundraising campaigns using online social networks but they need to be done strategically using very realistic goals.

I encourage you to check out Care2's ROI social media calculator at http://www.frogloop.com/social-networks-calculator
February 7, 2009 | Registered CommenterAllyson Kapin
Allyson,
That' quite a calculator. Have you heard of Justine Lam? (she ran Ron Pauls online campaign) I wish I had her numbers to put in your calculator. I have two observations to share. 1.) The target demographic is the internet. From asmallworld.org to facebook to any tiny niche ning community. From 8 to 80, poor or rich, they are on the net. 2.) I have discussed on my blog that Academia and government must move to the 'net to best serve their "market" and that the biggest hurdle they face is "tradition". They are too set set in their ways to move effectively into new media. Is the same true with fundraising?
Social media is business. If care2 were to get an online shopping portal and push the membership to shop on it, and received the commissions from thousands of occasional, sporadic purchases the roi would be great. Building the pages and widgets to promote the effort is a build once, use a million times exercise - the very thing that makes the internet what it is. Look at the screentoaster how-to follow along I created for my shopping portal. (link on my blog today) Build a page or two, a widget or two, a follow along or two and share with the members. The portal runs itself, bookkeeping is automated - no overhead there. That, by itself is "automated low cost revenue building". The charity earns from its membership without costing the membership a single cent they weren't going to spend anyway.
You can make it exponentially better if you build a ning type community where members share shopping experiences, "best deals" discount codes, etc and vie for a "most prolific shopper" award badge they can put on their profile. Using a skype type tool people can shop together no matter the distance that separates them. A new mom in California can shop with Grandma in Kansas and Sis in Florida. That's "community" on the personal level. The potential for viral is huge.
Figure an average commission of 5% per purchase through the portal and figure an average of $100 in purchases per member per year (an average family of four will spend a good deal more than that online this year - a lot of 18 yr olds will spend that on iTunes alone) times how many members. How much is that?
Now, if you use the shopping portal I use, you can factor in that it offers a special section where approx. 100 eco-friendly manufacturers with 1000s of eco-friendly products are promoted (and the commissions are purposely set higher to encourage users to embrace more environmental consciousness in their daily lives, and your impact is even greater for both your revenue and promoting the cause.
I am very interested in how the ROI really stacks up here. I honestly don't know what it would cost to promote an effort such as this to the memberships, but my gut feeling is that the promotional cost is a small fraction of the earnings possible.
In any event, I appreciate your taking the time to respond to my comment and affording me the opportunity to share my views.
Sincerely
Victor
February 8, 2009 | Unregistered Commentervictorseo

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