There are three major trends impacting nonprofits today: The channels used to fundraise are changing, the people who donate are changing, and the giving experience is changing. We’ll discuss why integrated and multi-channel fundraising, engaging Generation X and Millennial donors, and moving beyond the donation page are critical.

1. The Changing Nature of Online Fundraising
Steve MacLaughlin, Director – Internet Solutions
Read my blog:
www.blackbaud.com/connections

2. About Me
 Director – Internet Solutions @ Blackbaud
 12+ years experience building successful online initiatives with Fortune 500
firms, government and educational institutions, and nonprofit organizations
across the world.
 Frequent speaker at nonprofit conferences such as AFP, AHP, CASE, NTEN,
IoF, NAIS, DMFA, CAISAP, etc.
 Serves on the Board of Directors of the Nonprofit Technology Network (NTEN)
 Contributing author in People to People Fundraising: Social Networking and Web
2.0 for Charities and working on a new book.
 Read my blog at: www.blackbaud.com/connections
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3. "The old systems get broken long
before new ones become stable."
– Clay Shirky
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8. The Market is Noisy
Major Trends Impacting Nonprofits
1. The Fundraising Channels are Changing
2. The Donors are Changing
3. The Giving Experience is Changing
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9. Trend #1
The Fundraising Channels are Changing
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10. 2008 Total Fundraising (US)
$292.23 Billion Offline
$15.42 Billion Online
Source: Giving USA / Blackbaud
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11. US Fundraising Trends
$300,000,000,000
$250,000,000,000
$200,000,000,000
$150,000,000,000
$100,000,000,000
$50,000,000,000
$0
2001 2002 2003 2004 2005 2006 2007 2008
$246B $245B $243B $245B $283B $295B $314B $307B
Source: Giving USA
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12. US Online Fundraising Trends
16,000,000,000
14,000,000,000
12,000,000,000
10,000,000,000
8,000,000,000
6,000,000,000
4,000,000,000
2,000,000,000
0
2001 2002 2003 2004 2005 2006 2007 2008
$550M $1.1B $1.9B $2.62B $4.5B $6.87B $10.7B $15.01B
120% 100% 73% 38% 72% 53% 56% 44%
Growth Growth Growth Growth Growth Growth Growth Growth
Source: ePhilanthropy Foundation, Blackbaud
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13. 2008 donorCentrics Internet Giving Collaborative Benchmarking Analysis
 24 Large direct marketing organizations.
• Amnesty International
• CARE
• Defenders of Wildlife
• Doctors Without Borders
• Earthjustice
• Environmental Defense Fund
• Mercy Corps
• National Multiple Sclerosis Society
• Save the Children
• Sierra Club
• Special Olympics
 Self-selected group of participants with interest in online giving.
 Aggregate of 9.5 million donors, $750 million in revenue.
 Direct marketing giving which is consists primarily of direct mail, with
online, telemarketing, and other direct marketing sources included.
 With few exceptions, no large scale event giving.
 Gifts above $5,000 are excluded.
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14. Fig. 4: 2008 Median Donors by Age
as Percentage of Total File
Group 1 Organizations
Donors Who Gave At Least One Online Gift in 2008
Donors Who Gave Via Other Channels in 2008
25% 24% 25%
23% 22% 23%
17%
13%
11% 10%
3% 4%
1% 0%
18-24 25-34 35-44 45-54 55-64 65-74 75+
Note: percentages for non-online and online donors w ill not necessarily add
up to 100%, as each is a median of the percentages of the 12 participating
organizations.
Online donors are much younger than
traditional, primarily direct mail donors.
Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis
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15. Fig. 5: 2008 Median Donors by Income
as Percentage of Total File
Group 1 Organizations
Donors Who Gave At Least One Online Gift in 2008
Donors Who Gave Via Other Channels in 2008
28%
21% 22% 22% 22%
17% 17%
15%
12%
10%
6% 7%
Less than $25,001- $50,001- $75,001- $100,001- $145,001+
$25,000 $50,000 $75,000 $100,000 $145,000
Note: percentages for non-online and online donors w ill not necessarily add
up to 100%, as each is a median of the percentages of the 12 participating
organizations.
Online donors have higher incomes than
traditional, primarily direct mail donors.
Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis
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16. Fig. 7: Trends in the Percent Fig. 8: Trends in the Percent
of New Donors of New Revenue
That Are Online Donors Coming in Online
Group 1 Organizations Group 1 Organizations
27%
16% 16%
22%
20%
10% 14%
7%
6%
3%
2004 2005 2006 2007 2008 2004 2005 2006 2007 2008
Over the past several years, the internet has become an
increasingly significant source of new donor acquisition.
Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis
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17. Fig. 17: Channel Migration of Donors Acquired in 2007
Who Renewed in 2008
Gro up 1Organizatio ns
100% 100%
91%
64% % Giving Online
% Giving by Mail
33%
4% 0% 3%
2007 Giving 2008 Giving 2007 Giving 2008 Giving
Acquired Online in 2007 Acquired via Mail in 2007
Since donors may give both online and via mail in a single year, or may give to neither of
these tw o sources in a single year, percentages may add to more or less than 100%.
Large numbers of online donors migrate away from online or
email giving and to other sources, primarily direct mail. Direct
mail donors rarely switch channels to become online donors.
Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis
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18. Fig. 6: 2008 Median Donors by Giving Loyalty
as Percentage of Total File
Group 1 Organizations
52%
Donors Who Gave At Least One Online Gift in 2008
Donors Who Gave Via Other Channels in 2008
26%
19% 21%
18% 16%
14% 14% 13%
9%
New Reactivated 2 Consecutive 3-4 Consecutive 5+ Consecutive
Years Years Years
Reactivated donors gave sometime prior to 2007, did not give in 2007, and gave in 2008.
Consecutive Years refers to the number of years in a row that the donor has given
through 2008.
Percentages for non-online and online donors w ill not necessarily add up to 100%, as
each is a median of the percentages of the 12 participating organizations.
Online is a good acquisition source but
has poor long-term donor retention
Source: 2008 donorCentrics™ Internet Giving Collaborative Benchmarking Analysis
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19. Fundraising Pyramid 1.0
Major
Gifts
Membership
& Annual Giving
Donors
Prospects
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20. Fundraising Pyramid 2.0
Major
Gifts
Membership
& Annual Giving
Donors
Prospects
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21. The Channel Gap
The Market is Noisy
What to do about it?
 Start setting meaningful online fundraising goals
 Continue mixing direct mail and online communication
 Stop working in fundraising silos…now
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22. Trend #2
The Donors are Changing
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23. The Market is Noisy
The Donors are Changing
 We are getting older
 We are living longer
 We are getting wealthier
 We are getting more complex
 We are getting more wired
 We are creatures of choice
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24. Projected Population of the United States
40.0
36.9%
35.0
31.2%
30.0
25.0 2000
21.7% 22.1% 22.2%
2010
20.0 19.3%
2020
15.7% 2030
15.0 2040
10.9% 2050
10.0
6.8% 6.7%
5.0%
5.0
1.5%
0.0
0-4 5-19 20-44 45-64 65-84 85+
Source: U.S. Census Bureau, 2004
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25. We are getting more complex
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26. We are getting more complex
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27. Different Generations. Different Behaviors.
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28. Total Income by Generation (Trillions)
$3.44
Baby Boomers $3.29
$2.96
$3.67
Generation X $3.91 2007
$4.20 2012
2015
$1.89
Generation Y $2.37
$3.48
$0.00 $1.00 $2.00 $3.00 $4.00 $5.00
Source: Javelin Strategy & Research, November 2007
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29. The Generation Gaps
Born Age
 Baby Boomers 1945 – 1960 49 – 64
 Generation X 1960 – 1980 29 – 49
 Generation Y 1980 – 1995 14 – 29
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30. The Market is Noisy
Baby Boomers (1945 – 1960) (78 million)
 Downsizing their Lives
 Sense of Community
 Security Conscious
 Defer to Experts
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31. The Market is Noisy
Generation X (1960 – 1980) (51 million)
 Split Generation
 On a Personal Journey
 Mobile and Nomadic
 Defer to Heroes
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32. The Market is Noisy
Generation Y (1980 – 1995) (75 million)
 Live in Two Worlds
 Multi-channeling is the norm
 Have High Expectations
 Defer to Networks
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33. Who’s Using the Internet?
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34. Source: Pew Internet & American Life Project, Generations Online 2009
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36. The Generation Gap
The Market is Noisy
What to do about it?
 Start segmenting your constituents by Generation
 Continue to monitor and report across Generations
 Stop ignoring Generation Y and don’t be a stranger
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37. Trend #3
The Giving Experience is Changing
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38. In general, nonprofits have two
cornerstone development strategies:
Acquisition Cultivation
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39. Online efforts support those cornerstone strategies in these ways:
Acquisition Cultivation
Awareness Participation
Email Community
Friends Asking Friends Recurring & Renewing
Advocacy Social Media & Networking
First Gift or Membership Stewardship
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40. Online Fundraising 1.0
Step 1: Collect email addresses
Step 2: Create or borrow an online donation form
Step 3: Send emails to people pointing them to donation form
Step 4: Collect donations
Step 5: Repeat as necessary
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41. The Market is Noisy
Online Fundraising 2.0
 It is multichannel
 It is distributed
 It is not about you
 It is still about the relationship
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42. Donor Focus Organization Focus
External Websites
Donation
Mission
AmEx Widgets
Fish
GivingExpress
Facebook
Causes
Network Nonprofit
for Good Central
Internal Websites
Donor Campaign
Friends Portal Donation
Asking Forms Micro Sites
Friends
Gift Employee Membership
Catalogs Giving Event Forms
Portal Registrations
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55. What about Web 2.0?
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56. What about Social Networking?
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60. Social Media Funnel
Social
Media
Social
Networks
Email RSS
Website
Online Action | Offline Action
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61. Social Networking Tactics
 Engage
Go where they are.
Give them content that they want / can’t get themselves Engage
 Interact
Drive them to take an action.
Start small. Promote sharing.
 Activate Interact
Present opportunities to take the next step
Use focused variety.
Activate
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62. The Momentum
of Permission
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63. The Market is Noisy
How do you get started?
 Experiment first. Plan later.
 Listen to the networks.
 Enlist savvy people.
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64. The Experience Gap
The Market is Noisy
What to do about it?
 Start experimenting and begin listening to the networks
 Continue to expand both acquisition and retention efforts
 Stop waiting for things to be perfect before you change
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65. The Market is Noisy
Want to learn more? Be sure to check out….
 My Blog
www.blackbaud.com/connections
 Blackbaud Internet Resources
www.blackbaud.com/internetresources
 The Baudcast
www.blackbaud.com/baudcast
 NTEN
www.nten.org
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66. Questions? Answers?
steve.maclaughlin@blackbaud.com
www.blackbaud.com/connections