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A Chronicle survey of 252 of the largest non-profit organizations in the nation found that, in 1999,
The $7-million figure represents an eightfold increase from what the organizations raised online the year before, but accounts for less than 1 percent of all funds raised by those organizations in 1999.
The survey was sent to the non-profit groups included in the 1999 edition of The Chronicle's Philanthropy 400, which ranks the charities that raised the most money from private sources. Of the 400 in the list, 252 responded.
The vast majority of the money raised was donated directly through Web sites maintained by the charities in the survey -- from donors who either used credit cards to contribute online or who pledged money over the Internet and followed up with checks. The charities received about $150,000 from sites that offer donors the chance to give to a variety of different non-profit organizations and from so-called shopping-mall sites, which give to charity a portion of any purchase made online.
An additional one-third of the groups surveyed said they either began receiving contributions online in fiscal 2000 or plan to do so in the near future. The remaining one-third said they aren't using the Internet to raise money. In many cases, those who give money through the Internet have never given to the organization before.
Of the 91 non-profit organizations that reported some online fund raising in 1999, 33 said they had been able to figure out whether they had received contributions from those donors in the past. Twenty of the 33 reported that at least half the donations came from new contributors, and 10 of them that 90 percent or more of online donors had never previously given to them.
Officials of the charities say they use a variety of strategies to attract online donors to their Web sites.
Several non-profit organizations have persuaded Internet sites and service providers to give them free advertising, especially in response to natural disasters and other emergencies. The American Red Cross has gotten space from America Online, among others. The charity has been so successful in getting Internet sites to run its ads that it has developed a series of different Web banners to let people know whether it's seeking aid for victims of hurricanes, floods, tornadoes, or fires.
"It's not very difficult to get sites to run our banners," says Cyndee Archer, online media manager for the Red Cross. "In the middle of a disaster they come to us."
In addition to disaster-response efforts, the Red Cross's own Web site (http://www.redcross.org) gives visitors four different ways of getting to its donations page. The charity's Web address is also included in every piece of mail it sends out, as well as in all its advertisements. Though the Red Cross has raised far more money than any other non-profit organization online, its officials haven't developed a means of tracking whether those who give over the Internet are new donors.
Others are tracking their donors, and many say the vast majority are people who never gave to them before. Mercy Corps International raised about $130,000 online last year, and 97 percent of those donors had never contributed to the organization.
Like several other international relief groups, Mercy Corps has been successful in using the immediacy of the Internet to attract donors during emergencies. "The Web is really good for disaster relief, where there's this immediate need," says Jacob Colie, Webmaster at Mercy Corps International (http://www.mercycorps.org). "You can play on the real-time impact of the Web, that it's the fastest way to give; you can give right now."
The organization also offers people who visit its site the opportunity to receive regular updates on Mercy Corps programs via e-mail. Mr. Colie says he sends monthly messages to those who sign up, including information about relief emergencies where donations are needed. Mercy Corps also uses free public-service announcements on MTV and various Internet sites to draw in donors. Following the massive earthquake in Turkey last year, Yahoo gave Mercy Corps free advertising for its relief efforts.
Another international relief group, World Vision, has also been successful in attracting new donors through the Internet. In 1999, 62 percent of its online donors were new to the charity -- and many of the remaining 38 percent had first contributed the year before, when 93 percent of its Internet donors decided to support World Vision for the first time.
Amy Hunter, World Vision's director of Internet marketing, says the biggest share of online contributions -- nearly $555,000 in 1999 -- goes into the organization's child-sponsorship program. In the three years that World Vision's Web site (http://www.worldvision.org) has been operating, about 4,000 children have been sponsored by online donors.
Ms. Hunter says World Vision publicizes its Web site through newspaper advertisements, radio and television shows, and the online sites of various news organizations. During disaster-relief campaigns, for example, the organization has gotten ABC, CNN, and other major news organizations that have Internet sites to post interviews with World Vision field-staff members on the Web, along with links to the charity's Web site.
Other charities focus more on drawing people in directly through their own Web sites. The American Diabetes Association, for example, posts recipes and health tips daily on its site (http://www.diabetes.org). It also gives visitors the opportunity to participate in events and advocacy activities. Last year, the association posted a petition online that urged Congress to increase federal spending on diabetes research. More than 132,000 people signed the petition, which helped spur a majority of Congress to sign a letter to President Clinton supporting increased research spending.
Goodwill Industries has netted $315,000 in the past nine months by running auctions online (http://shopgoodwill.com). The charity developed the idea after its officials realized that many Goodwill stores had items for sale that might appeal to people who didn't live near the stores.
"Some of the Goodwills had been selling items on eBay," says Christine Nyirjesy Bragale, the charity's media-relations manager, referring to a for-profit online auction site. "Why pay a middleman when we can do it ourselves?"
The breakthrough came when Goodwill Industries of Orange County, in Anaheim, Calif., created its own Internet service provider and set up an online auction site in August 1999. The site now handles sales for 40 Goodwill stores around the country, with 25 more soon to be added. The volume of sales is increasing, Ms. Bragale says. Goodwill placed an ad in eBay's online magazine in May, and in the first half of the month sales rocketed to $60,000.
A few charities have managed to attract substantial donations with almost no effort. The Salvation Army first started taking contributions online in October, and raised $150,000 in four months despite doing little more than adding a button to its Web page (http://www.salvationarmyusa.org) that allows people who click on it to give money.
"I've just been amazed at the response from our donors with a very low-key appeal at this point," says Lieut. Col. Don McDougald, the charity's national treasurer. That response included one $10,000 credit-card donation, Colonel McDougald notes.
He adds that, as a result of the unexpected response, Salvation Army officials are meeting this month to discuss taking a more active approach. One idea is to link its Web site to its annual Christmas kettle fund-raising kickoff, which begins Thanksgiving Day with a publicity campaign during the nationally televised Dallas Cowboys football game.
Some non-profit organizations have turned to online fund raising because they expect not only to attract new donors but also to provide a service to people who already contribute. That is particularly the case for universities, which receive the vast bulk of their donations from alumni.
Princeton University says that many of its alumni, especially those who graduated in the past decade, expect to obtain information about the university online and use it to make donations.
"We're seeing that it's a substitute for writing out checks and sending them in," says Stephen L. Swain, manager of gift records at Princeton University (http://www.princeton.edu).
Aside from providing service to its donors, the biggest benefit of online fund raising for Princeton is its potential to cut costs. The university plans to reduce fund-raising expenses by automating its credit-card processing system in the next year and relying more heavily on e-mail solicitations -- thus eliminating the expenses of printing envelopes and letters, buying postage, and spending the extra staff time it takes to send out direct-mail appeals.
Obtaining the technology to make those changes, however, can require a substantial initial investment. Mr. Colie says Mercy Corps has budgeted $10,000 to develop or buy software that will let it process its own credit-card contributions -- which now are handled by a company that charges a fee of up to 10 percent of each donation. But he adds that bringing the processing in-house will also give Mercy Corps an effective way to collect donors' e-mail addresses. As a result, it will be able to do more of its solicitations through e-mail, saving substantially on the cost of paper mailings.
That efficiency can be attractive to donors, notes Joanne Del Giorno, national director of direct-response marketing for the American Diabetes Association. "People are very happy we're saving money from fund-raising costs that can now go to services and research."
| Internet fund raising | Total private support | |
| American Red Cross (Falls Church, Va.) | $2,760,421 | $817,000,000 |
| Catholic Relief Services (Baltimore) | $590,307 | $118,914,000 |
| World Vision (Federal Way, Wash.) | $554,589 | $400,487,000 |
| American Diabetes Association (Alexandria, Va.) | $510,000 | $101,239,000 |
| Campus Crusade for Christ International (Orlando, Fla.) | $350,000 | $351,000,000 |
| Princeton University (N.J.) | $167,784 | $159,080,193 |
| Muscular Dystrophy Association (Tucson) | $165,423 | $121,479,781 |
| United States Olympic Committee (Colorado Springs) | $150,000 | $59,405,000 |
| Ducks Unlimited (Memphis) | $150,000 | $68,000,000 |
| Mercy Corps International (Portland, Ore.) | $130,412 | $35,666,227 |
| Jewish National Fund (New York) | $100,000 | $28,000,000 |
| Note: Based on data from 252 groups included in the 1999 edition of the Philanthropy 400, The Chronicle's ranking of the charities that raised the most from private sources. | ||
Copyright (c) 2000 by The Chronicle of Philanthropy. Posted with permission on the Online Fundraising Resources Center. This article may not be published, reposted, or redistributed without express permission from The Chronicle. To obtain such permission, please send a message to editor@philanthropy.com. For subscription information, send a message to subscriptions@philanthropy.com.