Fundraisers in the worst economic era since the Great Depression continue to struggle according to a study out this week from the Giving USA Foundation. While an estimated $307 billion dollars was given to charitable causes in 2008; total fundraising declined an inflation adjusted of 5.7% from 2007 levels. This is the largest decline since Giving USA began publishing these statistics in 1954. The blog Tactical Philanthropy had a great post yesterday about the perspective one could bring to the news. Sean asks, should the headline here be – Charitable Giving Exceeds $300 Billion. Second Highest Level of Giving Ever! or Charitable Giving Falls Dramatically. Largest Percentage Drop on Record! Regardless of which perspective you take, while the total pie appears to be shrinking, online continues to be the lone bright spot in this fundraising landscape.
With an estimated two-thirds of charities experiencing a decrease in 2008 overall giving, I decided to take a look at how things are shaping up so far in 2009. See our full Q1 findings here. Looking at actual data from the same 400 clients we studied in our annual benchmark study, we’re seeing online revenue is up 8% in Q1 2009 vs. 2008; 5 points higher than what we were seeing in Q4 2008. So things appear to be trending, albeit modestly, in the right direction. Given these organizations have had online fundraising as a part of their mix for several years and the growth is on a significant fundraising volume, we believe this to be more reflective of the overall online fundraising environment than some of the other claims we’ve read this week.
When we look at the Convio client base as a whole fundraising is up significantly quarter-over-quarter and year-over-year. In fact, our Go! clients have experienced a more than 200 percent return on their investment in the last year, but it would be disingenuous to add that to our system performance and claim online fundraising is up 70 percent. The more salient point is that for these organizations online revenue has replaced most and in some cases all of the revenue they lost through traditional channels – and is more cost effective and efficient.
Another key point in the Giving USA Foundation online discussion with The Chronicle of Philanthropy was that building and strengthening individual relationships is critical in this environment. In this arena there is very positive news from the Q1 Benchmark. We are seeing Website traffic increased by 16 percent and email file size increased by 27 percent. These results reflect an opportunity to use the online channel to grow and cultivate relationships in a more cost effective and efficient way. According to the Giving USA report 75 percent of all giving came from individuals. Organizations are and must continue to focus efforts on cost-effective stewardship and engagement programs so that these individuals remain committed as we come out of the economic downturn. Our client’s results and feedback indicate that organizations that are engaging donors through multiple channels, with an emphasis online, are better positioned to weather the current economic storm and build lasting relationships with current and new supporters.
With only a quarter in the books, 2009 obviously has a long way to go. The results in the Giving USA Foundation annual report reflect the difficulty the economy has created, but also show that there is opportunity to efficiently engage individuals in support of the nonprofit sector. The good news thus far is that nonprofit organizations are continuing to see success online in the first quarter. Look for Convio’s Q2 updates on the state of online fundraising in early August.