Online Giving Thoughts

Yesterday we heard from DonorPerfect and why their clients are having success during hard economic times. Today is the rest of my conversation with Jon Biedermann, Vice President at DonorPerfect and here are a few of his thoughts about online giving.

Are you seeing online donations grow at a larger proportion to what they have been in the past?

We have certainly seen on-line donations continue to grow, and expect that trend to continue. However, it still only accounts for a very small fraction of overall giving- currently hovering at only 3%! Organizations with younger constituents will likely see this percentage grow rapidly over time. Others will see a slower growth rate. Finally, certain transactions, such as major gifts or bequests, will never be enabled on-line because the cost to do so is prohibitive. It’s one thing to accept an online donation for $100 (and pay for the ~$2-$4 in processing costs), it’s quite another to pay hundreds or even thousands of dollars in transaction fees when a check or wire transfer is very inexpensive compared to a multi-thousand dollar gift.

Do you see online giving as an important strategic area of growth for nonprofits during these economic times?

Online giving is another tool that non-profits can use to maximize their giving. It is unlikely to replace traditional fundraising techniques (e.g. direct mail, planned giving, etc.) for many years and in some areas (such as bequests and major gifts) it is unlikely to ever happen. But like the frog that’s caught in a pot of hot water and won’t jump out before it’s too late when the water boils, nonprofits can’t ignore on-line fundraising either.

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