Five Years of
NICK ALLEN "Fundraising on the Internet is a pioneer adventure. There are few experienced guides, the trails are rough and unmarked, and the technology can be as creaky as a wooden wagon wheel." That's what we wrote in 1996 in the first edition of
Fundraising on the Internet: Recruiting and Renewing Donors Online. By 2001, there are dozens of experienced guides (and we recruited some of them to write chapters for this book). The trails are better marked, thanks to the experiences of thousands of organizations that have toiled to acquire and cultivate donors online. The ongoing improvement in Internet technology and the creation of many new online service providers have improved the technology itself and made it more widely and cheaply available.
WHAT'S CHANGED MOST DRAMATICALLY, however, is the number of donors around the world who are online-- and who increasingly depend on the Internet to communicate with loved ones and strangers, find information, do business, and deal with the nonprofit organizations that enrich their lives. Twenty to thirty million Americans were online when we edited the first edition of this book; today more than a hundred million Americans (and fifteen million Canadians) are active users of e-mail and the Web. North Americans alone exchange more than eight billion e-mail messages a day!
These numbers mean that the Internet-- the World Wide Web and e-mail-- has the potential to reach more donors than ever. Every organization that has invested in an ambitious presence on the Internet is seeing the number of visitors to its site-- and new donors-- increase month after month. Although this book focuses on fundraising and donor relationship management, the Internet serves many other purposes for organizations: branding, marketing, organizing, advocating, distributing information, selling products, collaborating, and communicating.
Many organizations expected that the Internet would reduce their staff loads by automating information delivery, donation processing, and other tasks. But it turns out that as you communicate with more people (online or off), there's more work. Web site visitors or donors who would seldom take the time to write a letter or call on the phone (even with a toll-free number) think nothing of sharing their opinions in e-mail. The good news is that although these exchanges require staff time (and resource planning), they will certainly increase donor loyalty if properly managed. A Lag in Achievement
Despite the dramatic rise in Internet use in the last five years, revenue from online fundraising is still a minor contributor even to organizations who have invested millions of dollars in expanding their Internet presence. When we wrote the first edition, the American Red Cross was not yet taking online credit card donations (although 30 percent of the donors calling its toll-free donation number said they found the number on the Web). In fiscal year 1999, the Red Cross raised $2.6 million online from almost 22,000 donors (average gift: $118). That's a lot of money and a lot of donors-- but still less than 2 percent of the $172 million the Red Cross raised for disasters (and its over $800 million in total public support). Before the Internet, these donors would have seen the news about hurricanes or Kosovo but few would have taken the trouble to find the Red Cross's toll-free number or look up its mailing address. Now they just type in www. redcross. org.
Hundreds of national organizations are each bringing in hundreds of thousands of dollars a year in online credit card donations-- many from new donors who either haven't received their direct mail or haven't given by mail. To make this happen, these organizations have generally invested in building effective Web presences, building large e-mailing lists to bring supporters (donors and prospects) back to their sites, and actively promoting their sites online and off-line; many have several staff members dedicated to the Internet.
At the same time, only a few smaller organizations have seen comparable increases in their online income. Most have not invested enough in staff or Web and e-mail development; others simply can't offer the compelling case and the urgency that would prompt individual donors-- online or in the mail-- to give. However, some small organizations whose mission is really vital to their supporters have made the Internet work. For example, Cure Autism Now, a Los Ange-les-based organization that offers in-depth information and advocacy options to people with autistic children, raised $60,000 via an end-of-year 2000 e-mail campaign that reached thousands of people.
As Internet use increased, hundreds of for-profit companies were launched-- many with the same venture capital invested in other dot-coms-- to provide fundraising services to nonprofits. As George Irish discusses in Chapter Twenty-Four, some were portals where visitors could go to research and choose a charity, then make a donation on the spot. Others were shopping sites, where you could send your donors to shop online for books or clothes or laptops; your organization would get a small commission. Some enabled you to organize an online auction; others allowed your supporters to download a computer program that would show them banner ads and send you a commission.
The largest category, known as application service providers, or ASPs, enable an organization to "rent" complex applications for such tasks as accepting online credit card contributions or managing sophisticated e-mail programs, while leaving the installation, maintenance, and upgrading to the ASP. The most ambitious ASPs offer plug-and-play platforms where organizations can manage the content of their Web sites (without HTML or programming) and use an integrated suite of services, including donation processing, event registration, e-mail messaging, and donor tracking.
Although the majority of all these new companies have closed, some-- especially the ASPs-- will survive and eventually prosper. Online Fundraising: Taking It
to the Next Level
As development and communications professionals at thousands of nonprofits added online fundraising to their portfolios, the organizations that bring nonprofits together for learning and policymaking also embraced online fundraising. The national and local conferences of the Association of Fundraising Professionals (AFP, formerly NSFRE) presented dozens of workshops on the topic (as did the Direct Marketing Association's Nonprofit Federation, the Council for Advancement and Support of Education [CASE], and the Association for Healthcare Philanthropy [AHP]).
The ePhilanthropyFoundation. Org was established in 2000 by non-profit organizations and for-profit companies to promote ethical online philanthropy and help nonprofits build trust with online donors (see Lisa Aramony, Chapter Two, on ethics and Ted Hart and Michael Johnston, Chapter One, on building trust). At the same time, the U. S. states' attorneys general began to discuss a common standard for regulating online philanthropy (see Michael Johnston, Chapter Six, on regulation) and the Internal Revenue Service, in its request for comment (Announcement 2000Ð 84, IRS Bulletin 2000Ð 42), began a review of how current laws and regulations should be interpreted in relationship to Internet fundraising.
With the crash of many dot-coms in 2001 and the realization that raising money online involves the same rules and relationships as it does off-line, many organizations went back to basics. They learned that raising money online requires building and maintaining a Web site or sites that provide donors and other supporters with information, action, and involvement. Raising money online also demands obtaining the e-mail addresses of everyone-- current mail donors, Web site visitors, and others-- and regularly communicating with them to keep them informed about the organization's work and drive them to its Web site to learn more, take action, or make contributions. After all, acquiring donors is more about building a relationship with someone who cares about a charitable mission and a nonprofit's good work than about sending someone to shop at Amazon. com or buy Britney's sneakers on eBay!
In the five years since the first edition of this book, ePhilanthropy has come a long way. We hope this book and the accompanying Web site will help you take online fundraising to the next level for your organization-- and so provide us with your success stories for the next edition of this book.