Spotlight: Perspectives in Giving On-Line; What Lies Ahead?

by Robert I. Evans & Avrum D. Lapin

“An efficient nonprofit organization today needs to make it as easy as possible for supporters to make a donation”- Doug Schoenberg

Doug Schonberg is the CEO of Softerware, developers of DonorPerfect, a well known and widely used donor-management software package. DonorPerfect was one of the first products to become available as a fully web-based fundraising management system almost 10 years ago and they have offered web-based giving tools since 2005. Today, more than 10,000 nonprofits across the globe use their software.

We recently talked with Doug about online giving, especially within the Jewish community. Here are some fascinating tidbits from our conversation:

EHL Consulting/eJewishphilanthropy: For the record, how many Jewish organizations use your services?

Doug Schonberg: We have a very large base of Jewish organizations that use our products, which include everything from Jewish day schools and camps to Israel-based causes. We tend to segment our clients more by general categories like education and human services, but I’d estimate there are probably about 750 Jewish organizations around the world that use our donor management software. DonorPerfect has features that allow it to adapt easily to many different types of non-profits, and that certainly contributes to why it is probably the most widely used donor and donation tracking solution for Jewish causes globally.

EHL/eJewishphilanthropy: From your perspective, where are we in the evolution of online giving capabilities for and by Jewish and other nonprofits?

Doug: We have seen continued growth in the number of organizations embracing online giving. As a result, the number of gifts made online continues to increase every year. The key to the growth of online giving, however, is to expand the ways and frequency with which constituents use the organization’s website. The more often new and current supporters visit your website, the more opportunities you have to give them a reason to give via an online donation.

EHL/eJewishphilanthropy: We estimate that about 10% of all donations made in the U.S. are executed via the internet. Out of this $30 billion pie, are these gifts mostly outright donations or payments for existing pledges?

Doug: Today, that vast majority is one-time gifts, but making and fulfilling pledges online is a major opportunity. Also, a growing number of non-profits offer donors the opportunity to make a pledge or enroll in a monthly giving plan. If the pledge includes the authorization to automatically process the donations each month to a donors credit card or bank account, the pledge fulfillment rate increases dramatically and this can have a huge impact on the life-time value of the donors. The internet is absolutely one of the best avenues for soliciting monthly donations because the donor is already oriented toward providing their credit card information.

EHL/eJewishphilanthropy: Are most online donations for small amounts?

Doug: We actually see that the average online donation is somewhat larger than the typical gift, but most large gifts would still come through “traditional” means such as face-to-face meetings and other personalized approaches. This trend will undoubtedly continue for the foreseeable future. This is due to a number of factors:

  • online giving has focused primarily on encouraging new donors and growing the base of donors who support a program;
  • online giving does not typically provide the level of cultivation that leads to major gifts.

EHL/eJewishphilanthropy: What are some risks of online giving programs that Jewish nonprofit organizations need to consider?

Doug: As with all technology, the security of donor information remains an issue both for donors and for nonprofits. There are new rigorous compliance standards protecting how credit card data is stored. And nonprofits must be careful to closely protect credit card information. When data is transmitted via the internet, it should always be encrypted, and we strongly encourage nonprofits to not store sensitive data within their computers and servers. You really don’t need to keep cardholder data if your software has the ability to store “tokens” to initiate future transactions.

EHL/eJewishphilanthropy: What trends do you see emerging among online giving providers, specifically for Jewish nonprofit organizations?

Doug: The growth of online giving will continue. Social networking will help fuel this growth because it expands the number of solicitors for every organization by expanding the sharing of information. Jewish nonprofits must continue to build up their email databases. The biggest impediment for growth of online donations is an inaccurate and incomplete email database. We see many organizations that have active email addresses for only 10% their constituents.

The challenge is that emails are very fragile and change frequently. Therefore, nonprofits need to invest in methods that encourage donors to let them know when they change their email address. Equally important is to ensure that your appeals are well-designed and encourage donors to provide and/or update their email address.

Robert I. Evans, Managing Director, and Avrum D. Lapin, Director, are principals of The EHL Consulting Group, of suburban Philadelphia, and are regular contributors to EHL Consulting works with dozens of non-profits on fundraising, strategic planning, and non-profit business practices. Become a fan of The EHL Consulting Group on Facebook.