The Multichannel Giving Paradox: Online Donors vs. Offline Donors
Online acquired donors are significantly younger, more affluent, and more generous than their offline counterparts.
However, they also take more work to retain. While the number one reason for giving, both online and off, is for emotional reasons, the online donor is more likely to respond only once to fulfill that emotional need, whereas the offline donor is more likely to give repeatedly.
The paradox is that online givers, in aggregate, have much higher cumulative value over the long term than traditional mail-acquired donors.
That is, of course, only true if the nonprofit is successful in converting the online donor to an offline giving habit, usually direct mail giving (did you know that eTapestry – Online fundraising software can help you with this problem).
Online to offline conversion must take place almost immediately, as online donors tend to move to offline giving within a year of the first online gift or not at all according to our 2011 Multichannel Giving Report.
Donor Movement Across Channels
While direct mail acquisition is responsible for three quarters of all new donors and more than three-quarters of total gifts to a typical organization, online donor acquisition is steadily growing.
Watching this growth in online giving, combined with the steady performance in offline giving, can cause nonprofits to mistakenly believe that donors are seamlessly flowing between channels.
But that simply isn’t true.
As shown in the report, multichannel giving is not ubiquitous. The majority of multichannel donors are those who are acquired online and then subsequently start giving direct mail gifts. This is the only situation in which there are significant numbers of cross-channel donors across all organizations.
In other words, over time — year after year — large percentages of online-acquired donors switch from online giving to offline sources, primarily to direct mail. The reverse is not true, however: only a tiny percentage of mail-acquired donors give online in later years.
Growing Your Donor Base
What all this means is that online donor acquisition is exciting because it enables nonprofits to appeal to younger donors, therefore both growing the donor base and ensuring continuity in giving when older traditional givers eventually become unable to continue contributing.
But it’s also clear that nonprofits must move their non-traditional online donors into traditional renewal programs in order to retain the new donors.
The other lesson in this information is that online campaigns should be designed to acquire new donors, but not to replace offline channels.
Follow-ups to initial online giving should be designed to move online donors to offline giving. Follow-ups to offline donors, meanwhile, should still be designed to retain giving in that channel.
2011 Internet and Multichannel Giving
Download the complete Internet and Multichannel Fundraising Report to learn more about how the industry is changing, the turn to online fundraising and the need for a multichannel approach.