The Impact of (Very) Small Donors
by Daniel Septimus
The fundraising impact of small donors was one the enduring narratives of Barack Obama’s successful 2008 election campaign. The veracity of this narrative was subsequently questioned by a study released by the non-partisan Campaign Finance Institute, but however you slice it, it’s been clear since the 2004 Howard Dean campaign that the internet provides new opportunities for financially mobilizing the masses.
In general, when President Obama’s campaign spoke about small donors, it meant – at different times – people giving less than $200 or $100 or $25.
More than 200,000 people visit MyJewishLearning.com in an average month, so we’ve long been curious about the possibility of cultivating these users as small donors. If a quarter of those 200,000 were to donate $25 to MyJewishLearning just once during the year, our entire operating budget would be just about covered.
The problem, of course, is that while Obama’s small donations may be “small” by the standards of presidential campaigns, $25 is a significant charitable gift for most American Jews.
As Rabbi Jill Jacobs reminded us in a recent article:
“While there are no precise figures on Jewish giving, a 2004 report by Steven M. Cohen found that Jews with annual incomes of $50,000 to $100,000 give away an average of $577 a year to all causes and that those with annual incomes of $100,000 to $150,000 give away an average of $1,206 a year.”
To make this more relevant, consider this: According to MyJewishLearning’s 2009 user survey 75% of MyJewishLearning’s readers have income of less than $100,000. For them, a $25 gift could account for a significant percentage of their annual giving, making $25 seem a bit far-fetched, and hardly “small.”
So what is a small donation, really?
At the end of 2009, we decided to test the waters.
As part of a generous $50,000 matching grant from the Joseph and Harvey Meyerhoff Family Charitable Funds, in 2009, we needed to raise $50,000 from donations of $10,000 or less. By November, we had raised about $40,000 of this through grants ranging from $2,000 to $10,000. Could we get our readers to chip in the final $10,000?
In addition, to its 200,000 monthly visitors, there are 50,000 people who get regular newsletters from MyJewishLearning.com. Even more than our website visitors, these email recipients would be the audience for our appeal. But how much could we ask them for? Should we try to get 2,000 people to give $5? How about 10,000 people to give $1?
In the end, we decided on something close to the middle, sending out several appeal emails asking our readers to donate just $2. Our thinking: 99% of our email recipients really could donate $2, and we acknowledged this (with a bit of humor) in our appeal.
So what happened?
We did, in fact, reach our goal, raising more than $11,000 in a just a few weeks.
However, the total came from about 850 people giving – obviously – more than $2 on average. Of course, 850 is still a lot of people, and many of our readers expressed a great appreciation for having the opportunity to contribute meaningfully and within their means to a cause they appreciate.
Crunching all the data from the appeal also yielded many lessons for us, some of which should be relevant to other not-for-profits, as well.
What did we learn?
1. Though our readers gave, on average, more than $2, the micro-donation still had significant appeal. More than half of the donations received were for $5 or less and nearly 90% were for $18 or less.
Almost all online donation forms have default donation amounts. Many Jewish organizations use $18 increments with either $18 or $36 as the smallest “suggested” donation.
Since we only asked for $2 it would be hard to make broad generalizations of how much people are prepared to donate, but given our findings and Steven M. Cohen’s research mentioned above, it seems likely that even $18 may be too high of a lowest default gift. (Of course, donation forms always have an “Other” field – but it’s not hard to imagine that people may be embarrassed to put $5 into the “Other” field when $18 is the smallest recommended gift.)
2. Our donation form for this appeal had several default donation recommendations: $2, $5, $10, $18, $36, etc.
The most common donation: $5 – accounting for 35% of all donations.
Only 27% of donations were for $2.
The (possible) lesson: People want to feel generous. If you set the bar low enough, potential contributors will consider donating more than the recommended amount.
3. No matter how low your requested amount is, the overwhelming majority of people will not donate anything.
Our first email appeal was received by nearly 49,000 people. Nearly 11,000 of those opened the email. Of those, only 935 clicked through to the donation page and less than a third of those made a donation.
While the success of our campaign was invigorating, these statistics can be depressing at the same time, so realistic expectations are critical.
4. In addition to the emails that went out to our readers and the appeal notices on the MyJewishLearning.com website, I personally sent emails to friends, family, and colleagues. I didn’t ask them for any more than the $2 we asked from all our readers, but their donations tended to be more significant, accounting for 40% of the donations of $50 or more.
In fact, my personal email appeal ended up accounting for about 20% of the total funds raised.
The lesson here is significant. While we not-for-profit executives often think about soliciting funds from our acquaintances with significant giving capacity, we often ignore others. Yet, chances are every not-for-profit executive knows tens (if not hundreds) of people who – to support a good cause run by a friend or family member – would consider a donation of $18 or $54 or $100 or more.
MyJewishLearning.com will certainly run another micro-donation campaign in 2010. The chance to help us complete a $50,000 challenge grant was surely part of our 2009 appeal’s success, so we will certainly look for another challenge grant to replicate these conditions.
Will we do anything differently in 2010?
We will send distinct emails to those 850 people who donated in 2009, perhaps asking them to increase their gifts by a few dollars. And I will certainly appeal to my personal contacts a bit more aggressively and encourage the other senior staff members at MyJewishLearning to do the same. I can also imagine us experimenting with a smaller ($1) or larger ($5) requested donation.
No matter what, though, we will try to continue engaging the 850 people who felt enough of a connection to MyJewishLearning.com to make a contribution and try to increase that number significantly in 2010.
Daniel Septimus is the Editor-in-Chief and CEO of MyJewishLearning.com.