May 14, 2009

Size of Average Online Gift Dropped in 2008, from $86 to $71

The total amount of money that charities raised online rose in 2008, as charities attracted more donors to their Web sites, according to a new study.

Together the organizations in the study—26 large national charities, such as Children’s Defense Fund and CARE USA, and six state organizations, such as the Colorado Environmental Coalition—raised 26 percent more money through the Internet in 2008 than the previous year, as the total number of online gifts climbed 43 percent.

But the average size of those contributions decreased by 17 percent, from $86 in 2007 to $71 in 2008.

Average gift size held relatively steady until the last three months of 2008, according to the study.

“Online fund raising isn’t seeing the same kinds of declines that other channels are,” says Marc Ruben, a vice president at M+R Strategic Services, a consulting company in Washington, and one of the report’s three co-authors. “However, in the fourth quarter of 2008 things looked a lot worse than they did in the rest of the year, so that may portend more dark days to come.”

Contributions of less than $50 accounted for 61 percent of the gifts made to the organizations in 2008, up from 51 percent in 2007. But while donations of $250 or more represented just 3 percent of all gifts, those gifts accounted for 41 percent of online revenue.

To encourage people to make larger gifts online, nonprofit groups must keep track of how much donors have given before and tailor their e-mail appeals accordingly, say the authors of the report.

“Don’t ever ask someone for half of what they’ve given before,” says Mr. Ruben.

Charities’ e-mail lists continued to grow in 2008, but somewhat more slowly than in past years. The rate of growth in 2008 was 17 percent, compared with 19 percent in 2007 and 21 percent in 2006. The rate at which e-mail addresses were out of date held steady at 19 percent.

The study’s findings suggest that online activity by charities that operate in a single state is catching up to that of their national counterparts.

In 2007, the statewide groups sent an average of 2.1 messages to the people on their e-mail lists each month, compared with an average of 3.5 messages for all of the groups in the study. In 2008, the state average rose to 3.5 messages per month, which equaled the average for all groups in the study.

The number of online gifts made to state groups rose 85 percent in 2008, and the amount of money they received through the Internet rose 27 percent. The average size of the online gifts they received dropped sharply, $61 in 2008 compared to $132 in 2007.

The proliferation of less expensive online fund-raising systems in recent years has been critical in helping local groups better seek Internet gifts, says Holly Ross, executive director of the Nonprofit Technology Network, in Portland, Ore., and a co-author of the report.

Says Ms. Ross: “You don’t have to have the most expensive database in the world to be doing a solid e-mail program.”