April 20, 2024

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Rise in Online Donations

online donations

Donors are choosing to make online donations over other types of giving. So says two studies just published by The Chronicle of Philanthropy.

Two other key findings:

  • Donations are up over the previous year. A study of 115,000 nonprofits said they generated $2.1 billion in donations. That’s an increase of 14% over 2014 donations.
  • Donations to the largest charities grew by the same 14% increase, reaching a total of $785 million. That’s based on The Chronicle’s study on the 149 largest nonprofits.

These figures sharply contrast with giving estimates published by “Giving USA” only last week, in which contributions from individuals, corporations, and foundations increased only 1.5% over the previous year, taking inflation into account.

Nonprofits are finding two techniques successful in generating online donations:

  • Using data analysis to identify and target past donors who are active in online forums supporting causes.
  • Using email appeals to persuade donors to sign on for monthly donations.

While online donations are in a state of constant upward growth, they still represent only a tiny fraction of total donations received: just 2.1% for the larger nonprofits. But this isn’t an across the board phenomenon. Some nonprofits can count online donations as a much larger percentage of their total budgets. For instance, The American Lung Association says that a total of 30% of funds it receives are contributed online.

Of the nonprofits surveyed, three-quarters of them said they hope that online donations will eventually represent 10% of total funds raised over the next three years, while one in five nonprofits expect to double that percentage for online donations in this amount of time.

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International Relief

There was, however, one type of nonprofit that failed to generate increases in online donations and that would be international relief. The authors of these studies believe this is due to the fact that large natural disasters already generated a boom in online donations in recent years thanks to Japan’s earthquake and because of the tsunami. As a result, online donations were already at a high so that increases would not be expected to occur.

In fact, relief organizations experienced a drop in online donations, such as the American Red Cross, which saw a 70% decrease in online gifts during 2015. Groups experiencing 50% decreases or more in online giving included AmeriCares (58%), Direct Relief International (53%), and Save the Children (53%).
For some nonprofits, raising funds online has a different connotation.

The Elie Hirschfeld Foundation of a real estate mogul has an active online profile, more active perhaps than other nonprofits.  He gives to many causes – kids, education and art – and it makes a difference in peoples lives from his own money. Admirable.