Monday, March 28, 2011

The Wired Wealthy

There’s an attitude out there that Online fundraising hasn’t quite arrived yet in Canada. Almost every non-profit does it, but most just don’t devote much in the way of time or resources to it. And I have met many traditional fundraisers who belittle online. Many of these people are from the major gifts school of thinking and for them the real money is in cultivating large gifts. Online, to them, is mostly about giving donors information between asks. To them, online fundraising is not much to sneeze at.

But times are changing. A US study clearly shows that there is a shift taking place among wealthy donors – more and more of them are going online to connect with charities.

The study, The Wired Wealthy, was released in 2008 by Convio, Sea Change Strategies and Edge Research. It looked at nearly 3,500 donors who had given more than $1,000 to one of 23 major US non-profit organizations in the same 18-month period through any channel (online or offline). Most of these donors were in the 50s (Boomers) and the average gift was about $10,000.

The study segmented the wired wealthy into three groups. Relationship Seekers were the smallest group at 29%, but they were the second highest donors. This group is characterized by a strong personal connection to the non-profit and its work. They spend more time online than the others and are most likely to watch online videos. Relationship Seekers are multi-channel donors, but more than half say they expect their online giving to grow in the coming years.

The second group was called All Business. They were the highest donors and the second largest group. Their name says exactly how they view a non-profit. They predominantly visit charity web sites to donate – period. They want a smooth and simple donation process, and a tax receipt at the end of the year. “After that, they pretty much want to be left alone,” the report says.

The third group was called the Casual Connectors. At 41 percent, they were the largest group, but they gave the least. The study describes them as the “inbetween” between the Relationship Seekers and the All Business.

Web plays a role
The study found that non-profit websites play a significant role in decision-making resource for the wired wealthy. Sixty-six percent said say they visit the web site of a cause or charity before donating for the first time.

At the same time, the report found that the wired wealthy were underwhelmed by non-profit websites and emails. Only about a third said they found websites very useful. Only eight per cent said they agreed very strongly that non-profit websites were inspiring and seven percent agreed very strongly said the websites make them feel personally connected to their cause or Mission. When asked whether the charity website makes it easy to get information on how to decide to give, only 11 per cent agreed very strongly.

Wired wealthy use multiple giving channels for donating. Most have given online and by mail. A slight majority prefer online. However, 46 per cent said they will likely to be making more of their donations online using the Internet in five years.

Most wired wealthy donors are not frequent web site visitors. They mostly visit before they give and then infrequently through the year.

Wired wealthy believe they get too much email from non-profits. Seventy-three percent said they read “about half” or less of each charity email they receive. Twenty-seven percent say they read “hardly any.” However, the study found that the wired wealthy are receptive to email solicitations, especially renewal notices. Tactics most likely to please wired wealthy donors are action alerts, success stories, tax receipt at year-end, and reports back on how money was spent.

The study also asked non-profit organizations what they think. There was widespread recognition that high value donors are engaging – and giving – online. Sixty-four percent said they believe that high dollar donors are visiting their web site and subscribing to their emails.

The Bottom Line

Clearly, the wealthy donor segment is moving more and more online. The days when we could say that “our donors are old, they don’t give online” are passing before our eyes. Online fundraising is here to stay and non-profits need to start taking their online marketing more seriously.

There is also online “fatigue” – too many emails and too little at non-profit websites to keep them coming back again and again. This is likely a symptom of a lack of an effective engagement strategy. The right message will cut through all of this.

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