Online Fundraising Predictions
In what year, if ever, will online fundraising surpass direct mail fundraising in annual dollars raised?
Send us your answer this week, with an explanatory sentence or two, and we'll publish it next week. Consider this background first.
Media Life magazine just reported a prediction from respected JupiterResearch about the leveling off of online sales in the retail marketplace.
Jupiter predicts that online consumer purchases will plateau by 2011 at 10-15% of all retail sales. At that point, the surge of new online buyers will have ceased, and existing online buyers will have shifted online whatever “share of wallet” they are prepared to commit to the online marketplace.
So from, say, the launch of Amazon.com in 1994 (!!) till 2011, online retail will reach a puny 15% of the retail wallet! That's about a percent a year.
If this prediction bears out, it's great news for bricks & mortar retailers. Does it have any relevance to fundraising? Will online fundraising ride a bigger, faster and more lasting wave? Or can direct mailers expect to throw just a few crumbs to their upstart online competitors?
About sixteen months ago, we completed extensive survey research on online giving patterns, yielding our DonorTrends white paper, Keep Your Postage Meter: The Status of Online Giving in America. Our report compared three age cohorts — Boomers (born 1946-1964), Pre-Boomers (born before 1946), and Post-Boomers (born after 1964).
Some key numbers:
- More than 85% of respondents in each group had made online retail purchases.
- By comparison, only 14% of respondents gave in past 12 months to a charity, 6% to an advocacy group, and 6% to a political campaign.
- Post-Boomers were nearly three times more likely to have given online than Pre-Boomers (Boomers were closer to their elders).
- Respondents with a college or post-graduate education were between two and three times more likely to have given online than those less educated.
- Half of online givers said they had never been contacted online to give, suggesting that these donors acted on their own initiative to give and/or responded to “pushes” in other media.
- Of the 35% of all respondents who said they've urged others to make contributions, only 19% of these did so via email (Boomers and Post-Boomers were 50% more likely to urge online than the oldest segment).
So, what does this say? Some Agitator predictions …
1. We've only scratched the surface of online fundraising. OK, that's a DUH!
But, as impressive as recent online giving growth has been, here's our prediction:
We won't see the real surge until Post-Boomers hit their giving prime, say, at least 10-15 years from now (the oldest is 42 now). Then you can think about getting rid of your postage meter!
While the numerous Boomers are already coming onstream (not necessarily online)impressively as donors, an even bigger population segment is following behind them, and it's clear that the Post-Boomers are considerably more comfortable with online giving than even their Boomer elders.
2. If your donor constituency is college-educated or better, expect more online giving. Today, even in this group, only one-in-ten has contributed online to an advocacy group or political campaign. And since education correlates strongly with giving levels (through whichever channel), we predict that more and more of the giving by the best donors will occur online. A double blessing, because it will be more cost-efficient to further involve, engage and cultivate them online as well.
3. So, will online fundraisers do better than online retailers, eventually winning more than a paltry 15% of the fundraising “market pool?” Absolutely. Will online fundraising actually surpass direct mail (and telemarketing) fundraising in dollar volume?
Tom says: “Absolutely … within ten years, and then accelerate even more. Direct mailers, in ten years you'll be in your fifties and working for some punk online whiz, who will pay little respect to your hard-earned and proven direct marketing insights.”
Roger says: “Absolutely. Positively! Online fundraising has a bright, bright future made even more brilliant with easy and inexpensive technologies — especially in the video realm — that will enable far more donor involvement and far more organizational accountability. As we've been saying, “involvement” and “accountablity” are increasingly important with today's and increasingly tomorrow's donors.”
“And, Tom, don't think for a moment that there will be any less premium on talented direct marketers. Just because some techie wizard has invented the newest technique that glows in the dark, doesn't mean it will work predictably and sustainably. It will take master of the direct marketing art to assure that.”
Now, YOUR prediction please?
Roger & Tom
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