Online Giving Trends in Higher Education | npENGAGE

Online Giving Trends in Higher Education

By on Sep 17, 2009

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The Council for Advancement and Support of Education (CASE) recently released a report called "Click Here to Donate: Results of the CASE 2009 Survey of Online Fundraising." The report was prepared by Dr. Chris Thompson, former CASE Senior Research Director, and respected nonprofit consultant Robert L. Weiner.  Thompson is now Director of Editorial Research for the Chronicle of Higher Education and The Chronicle of Philanthropy in Washington, DC.

The CASE "Click Here to Donate" report is the latest in a series of reports that give nonprofits a clearer picture of what is being done online. It references the Target Analytics 2008 donorCentrics Internet Giving Benchmarking Analysis study as well as data from The Chronicle of Philanthropy. The CASE report has a lot of good information and insights in it. I thought I would share just a few of them with readers.

Survey Background
The survey was conducted in March through April of 2009 and was sent only to CASE members. 562 CASE member institutions responded to the survey. The sample is slightly more skewed toward research/doctoral and private institutions than the Voluntary Support of Education survey’s participating institutions, but it is geographically representative of CASE’s membership, with more than 85% of survey respondents coming from the United States.

Main Findings
There are a lot of insights in the study but these are the ones that I thought stood out the most:

  • Almost two-thirds of the institutions have been raising private funds online for five years or less.
  • 72% of the online fundraising opportunities are located on institutions’ main Web pages, 59% from links inside e-mails, 58% on alumni office Web pages, and 51% from links inside e-newsletters.
  • Fewer than 2% of institutions are using new media such as blogs, Twitter and mobile giving.
  • The total value and number of online donations are the two most frequently reported measures of success used, but even these have been implemented by fewer than two-thirds of the respondents.
  • 34% of institutions report "we do not measure performance."
  • 30% of respondents think their online donors are younger, while only 1.5% think they are older and 18% think they are about the same age as other donors.
  • 45% of respondents did not know the average age of their online donors.
  • About 20% of respondents reported that online fundraising exceeded their expectations, and 22% said it met their expectations.
  • Just over 38% reported it was below their expectations, and for 17% it was "very much below" expectations.

Too Many Unknowns
My first reaction to the report was the significant amount of unknowns. This was surprising because my experience working in and with higher education institutions is that they live on a steady diet of data and information to make decisions. For a variety of reasons, the online fundraising realm remains mysterious for many of the survey respondents.

When asked about the effectiveness of online fundraising compared to other channels, the most common response was "Don't Know." The section on "Online fundraising success compared to other routes" has "Don't Know" as the most common response for half of the routes surveyed. Respondents were asked for their predictions of the next big thing in online fundraising. The most frequent responses were "I have no idea" and social networking. It was good to see the survey show a strong adoption of social media to make connections with constituents.

Missing Measurements
If you can't measure it, then you can't manage it. Period. The CASE study finds a tremendous amount of undermeasurement happening. 34% of respondents said "We do not measure performance." This was the third most common answer, behind the total value (56.5%) and number of online donations (55%) coming in through all channels. The irony here of course is that the Internet is overflowing with measureable metrics compared to traditional channels like direct mail. At least there's an admission that the right kinds of metrics and measurements aren't being used as much as they can be.

The report suggests that the reason for the lack of measurement might be because "online donations may arrive via third parties and not be linkable to donor profile records or to existing measurement systems used with other types of donations." There is a high degree of fragmentation in the systems and data being used by higher education institutions. Another theory put forth is that "data collection systems take time and resources to put in place, and investment may not yet be perceived as worthwhile given the relatively small stream of online funds." This sounds like a self-fulfilling prophecy to me. If it's not perceived as worthwhile, then it's probably not going to get the right amount of attention in the organization.

Professor, We Have a Problem
There are a few bright spots in the report, but the overall message is troubling. More institutions are fundraising online, the average gift amount is $241, and some of them have had tremendous online revenue growth in recent years. But the survey responses suggest that many institutions are doing just the basics online, make judgments about the effectiveness of online giving without meaningful metrics or measurement best practices, and use fragmented systems that prevent them from getting a more holistic view of their donors.

A few years ago this might have been acceptable, but research from across the entire nonprofit sector indicates that educational institutions are getting sub-par results. Research for 2008 online giving done by The Chronicle of Philanthropy shows that colleges and universities are underperforming compared to other nonprofit groups. The 67 colleges and universities in The Chronicle's analysis had 0.97% of total fundraising revenue coming from online giving. Compare that to other sectors like health (4.43%), religious (3.62%), and international (3.36%). Target Analytics found some organizations with online giving exceeding 10% of total fundraising revenue. Even with some outliers and statistical fluctuations — that's not good comparative performance by higher education institutions.

A Working Theory
Having recently spent a lot of time looking into online giving trends, I have one working theory as to what's going on in higher education. These institutions have traditionally relied heavily on major gift programs for the majority of their fundraising. The culture of fundraising is focus on a small number of large gifts instead of a large number of smaller gifts. The exception is at colleges and universities where a strong and well developed annual fund is in place. These organizations have been able to leverage online giving to contribute to the annual fund and a growing number of online major gifts. But this requires change within the institution to really succeed.

Compare this to nonprofits that traditionally raise the majority of their revenue from direct marketing programs. These organizations raise tremendous amounts of dollars both online and offline through smaller gifts. Their adoption of online giving required much less change in the fundraising culture of the organization. They simply added another channel and applied many of the same direct marketing principles. These nonprofits represent the largest online fundraisers and raise a much higher percentage of total revenue from online giving than educational institutions.

This is just one working theory based on countless hours looking through data, talking to nonprofits, and attempting to connect some dots. I've heard plenty of other reasons and excuses. It could also have something to do with gravitational forces, plate tectonics, or fractals. But I doubt it.

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Comments (1)

  • EJ says:

    ” The 67 colleges and universities in The Chronicle’s analysis had 0.97% of total fundraising revenue coming from online giving.” how did tou calculate the 0.97%? The link to 2008 online giving only shows the amount raised online by those institutions but not the amounts raised offline. Can you point me to the data where you calculated the 0.97%. thanks!

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