The Advantages of Online Fundraising

4 minute read
By the
  • Jan 24th, 2017

The Internet and social networking sites have enabled a new phenomenon: online funding of projects, businesses, inventions and special interest. This is of particular benefit to non-profit and charitable groups, as it offers a new avenue for fundraising, similar to crowdfunding. While the percentage of charitable giving online is small in comparison to overall giving (7% of total), there are a variety of reasons for that statistic. At the same time, though, online giving is growing at four times the rate of traditional methods, largely because of the ease and focus through giving online. This has the potential to be a boon to Canadian NPOs and charities; particularly, local and smaller groups.

Lower costs

Online donations, like online crowdfunding, are efficient financing tools for startup NPOs, community groups and focused charitable ventures. Online funding thrusts reach a wider market than conventional direct mail or in-person solicitation, while providing a virtual instantaneous flow of cash. Properly administered and executed, online funding also is simple and easy for donors. For the organization, Internet fundraising reduces costs over mail and in-person solicitation, while administrative costs charged by the online donor hub are significantly lower than conventional office costs. By itemizing where every dollar donated goes, the charity is able to let donors see where their money goes, at a glance. This increases the trust factor in that charity or NPO. Lastly, all charities need to be aware that some online fundraising platforms can over charge for their services, if you are currently fundraising online you need to be asking yourself: Am I overpaying for my online fundraising?

Increased giving and next generation of supporters

Statistics show that online donors visiting a site are more likely to give than through mail solicitation, while even Internet ad campaigns have a higher return on investment than convention methods. Busy donors – those who use the Internet to operate more efficiently – also are more likely to give. At the same time, Internet users actively search out charities and chances to help a cause far more than non-Internet potential givers. More of the younger generation gives online rather than directly, enabling charities to whom that audience appeals more likely to receive financial assistance.

But, like conventional fundraising, people who give, give more when they receive something in return, are acknowledged effectively, publicly and quickly and are able to see immediately the benefit of their donation. Look to Plan Canada or World Vision for examples of how identifying a village, a specific cause a specific gift or a specific foster child increases giving. When World Vision sends out letters from the recipient child, or provides progress reports on that donation, the donor is more likely to continue to support the cause. One woman, whose parents sponsored a child through World Vision in her name in 1995 continued to foster children through 2015, because she saw an immediate and recognizable effect of her giving, while she was rewarded each year by a personalized thank you and updated photos and letters.

If you haven't already, we suggest you read our previous blog post on the subject about building donor and increasing donor retention, it covers how to effectively build donor trust and acknowledge your donors contributions by providing thanks.

Charities that appeal to the heart rather than the head work most effectively. However, providing assurances that the funds are being used as declared and are being used wisely reinforces the decision to contribute, so, in tandem with tugging at heartstrings, most effective fundraising programs make sure that there is good accountability and that the donor knows his funding actions are secure. A website, for instance, without a security certificate is far less likely to be viewed as reputable.

There are many ways to increase the number and amount of donations. Versatility is important. Because so many people rely exclusively on smart phones, responsive websites must work as well on these devices as on laptops, tablets and desktops. Brand your charity drive and make it compelling. PETA is well branded, but Save the Children offers compelling stories. Keep it simple, though, so the message does not get lost in the noise. Online giving should be quick and immediate, so that the donor does not reflect too long or be diverted by other interests before he completes his contribution. This means websites and fallible forms need to be simple and short. Rely on support systems such as social networking groups to increase your draw through ad campaigns while also providing valuable feedback to donors and potential donors. Make regular (monthly) donation signup easily available. At the same time, offer initiatives that encourage current donors to invite new donors into the fold. Again, social networking and incentives work well here. Lastly, increase credibility by relying on experts and on testimonials. Keep your drive focused on the end result of the fundraising, not the funds themselves. That means keeping the donor focused on the value of donating. Like any sale, features are simply the basis of the benefits achieved. In other words, sell the sizzle, not the steak.

New Donorhut: Version 2.0

3 minute read
Nov 21st, 2016

We are excited to announce the launch of the newest version of the Donorhut platform. This recent release was a major version change (from 1.7.6 to 2.0) and is accompanied with many improvements and changes to the platform, both in front of and behind the scenes.

New Feature: Addons

2 minute read
Nov 25th, 2016

We are proud to announce a new feature on the Donorhut platform: Addons. Addons are currently one-time purchases for your Donorhut account that enrich your platform experience. Currently we only have one addon available for purchase which is the fee reduction addon, in the future we are planning to add many more, some of which are going to be free.

You Are Overpaying for Your Online Fundraising

4 minute read
Dec 6th, 2016

With online fundraising, your organization can reach out to more potential donors than with traditional fundraising. However, most fundraising websites want to keep a large percentage (5% to 7%) of the raised donations on top of the credit card processing fees. This is usually challenging for small, non-profit organizations as steep platform fees end up unnecessarily inflating the fundraising expense. Perhaps, this might make you consider whether you are overpaying for your online fundraising.