The message of the study was clear: the traditionally untapped online donor market has become an increasingly important revenue stream for charities and the demographics of online donors in general are preferable to "offline" donors (i.e., mail-in donors).
Online revenue as a percentage of total revenue for the 24 organization participants is still dwarfed by the traditional offline donation streams (roughly 10% of total revenue came from online donations in 2008), but has become increasingly important. The median online donations grew 39% from 2007 to 2008 versus a -3% growth rate for offline donors in the same period (Target Analytics).
According to the study, the average online donor is younger, more educated, makes more money and donates in higher amounts--all very attractive characteristics for potential donors. “But how you get people to routinely give online is a nut no one has yet cracked.” ~ Tobias Smith, director of online communications at CARE (NYT.com). Yes, it has proven challenging for charities to get online donors to come back and donate again, and those who do tend to migrate to offline donation avenues (i.e., mail).
There are any number of reasons why online donations are such a small portion of overall revenue, but most importantly the online market is relatively new and not well known by organizations. “We know how to ask for money using the mail, but most organizations are still trying to figure out how to do that online.” ~Lori Held, membership marketing director at Trout Unlimited (NYT.com). Paper costs and check processing is expensive, but it is a market that has evolved over decades and charities have gotten very good at it. During a time when donations are hard to come by, it is difficult to justify investing in new fundraising mediums that would require new staff and studies needed to perfect online marketing strategies.
This is where MEOG comes in. The genius of MEOG has never been contained in any one of the many services we propose to offer. In fact, many of our services are already being done in one form or another by other websites (See: networkforgood.org for online donations, idealist.org for volunteer opportunities, care2.org for social networking, oneworld.net for news in the development community, and choike.org for news and attention paid to non-Western charities). To the contrary, the beauty of MEOG lies in the effects of what happens when you bring all of these services into one easy-to-use public space online.
For example, one problem that organizations face when recruiting online donors is the need to hire expensive staff who understand how to corner the online market. But by appealing to potential donors through the establishment of a social networking website, MEOG essentially brings socially conscious people to organizations' doorsteps. By marketing ourselves we also market our organization members.
The article cites online donor retention as a major problem, and this view may prevent further investment in online fundraising campaigns. We at MEOG, believe in creating a multitude of benefits to the user that keep them coming back, ideally for a redundancy of reasons. Some join wanting to learn more about a particular social cause, others for potential volunteer opportunities, still others to find a specific organization's contact information, but each stays to keep in touch with friends they met while volunteering, to stay abreast of the latest development news, and/or to manage the newsletters of all the organizations they are fans of, etc, etc, etc. The point being that MEOG makes it a priority that everyone has a reason to come back.
What does this mean for our organization members? It means being able to target a self-selected group of potential donors, volunteers and potential employees who, through their participation on the site, have identified the issues they are interested in and basically said "I'm here, I'm interested, I want to help." The responsibility of an average organization administrator is simply to present their operation in a positive light and use the marketing features on MEOG to the best of his or her abilities. This will allow organizations who cannot afford big online ad-campaigns to tap into online donations just as easily as big, well-funded charities. Using the tools MEOG provides, charities have incentive to keep their information, accurate, enticing, and up to date, thus leading to the most comprehensive database of organizations that are engaged with their donors, volunteers, constituents and the international development community as a whole.
Let's take a particular site and analyze their model. Networkforgood.org is a very respected online donation interface. They have raised more than $250 million in online tax deductible donations to more than 45,000 U.S. charities. However, they only target charities that have a 501c3 tax designation, thus alienating any non-US organization from receiving donations. Furthermore, they charge a listing fee to be represented on their site, but not every organization can afford, even small, monthly fees. They admittedly keep donation processing fees low (4.75% per donation), but I would prefer to not alienate small charities who cannot afford the listing fee ($199 set up cost and $29.95 a month). In the end, 10% is the same to every donor but 30 bucks a month is not the same to every charity. Any organizations has to cover its administrative fees, but there are varying philosophies on how best to do that. I'd prefer to structure MEOG as to what's best for development, not what looks best at first glance to a donor.
Networkforgood.org has the tax-deductible donation market pretty much cornered in the US at this point. They also make a valid attempt at hooking up volunteers with their organizations, but that part of their site is underused and once again concentrated to organizations registered as 501c3's in the US. I've spoken with hundreds of volunteers or travelers who said they have been frustrated with current sites that claim they hook you up with programs, because there's usually hidden fees or the information is cumbersome and difficult to wield just using Google.
By bringing the donation and volunteer services that networkforgood.org offers into a social networking format and extending organization representation to an international setting, several problems are resolved. First of all, retention rates of donors and volunteers would be dramatically higher. In order to use networkforgood.org you have to first find it and then understand what it does/how to use it. It is often unlikely that a casual site visitor (or even a one-time donor/volunteer) will remember this particular site among the hundreds of sites an average internet user frequents in the course of a month. In other words, the nature of using Network for Good does not encourage return use, in that an average websurfer is minimally engaged at best. By creating user accounts and appealing to a niche market on multiple levels, MEOG can reshape the tap into the social networking craze that has been ballooning in the past 5 years and reshape the way that the international development community interacts with itself.
Once a user account has been created, donor/volunteer retention will dramatically increase. If a user is an active participant on the site, then MEOG will be able to regularly communicate with him or her via private email, keeping them up to speed to changes to their account, thus serving as a constant reminder of our many services and encouraging users to remain engaged with their personal accounts, the MEOG community and international development as a whole. An active MEOG participant is much more likely to continue to donate, comment, volunteer than someone who finds Network for Good in a Google search results page for "donate" or "volunteer".
It is worth noting that while MEOG would dramatically improve the way that online donations are transacted, that is just one on a long list of goals we have. It is widely known that a problem does not go away just by throwing money at it. This is why increased donation levels alone will not erradicate the many problems the international development community is dedicated to fighting. Increases in donation levels need to be matched with increases in human effort (volunteers) and increases in organizational efficiency, which can only be achieved by fostering new conversations and providing some checks on current inefficient behavior.
MEOG accomplishes these things by generating an online public space that facilitates interagency communication, collaboration, and exchange of ideas and resources. By making it easier for organizations to work together you make it more likely that they will benefit from each other's comparative advantage and particular expertise. In short, any social networking website encourages communication and efficient practices that are not currently possible or are not happening with enough frequency. Such a format will also lead to increased organizational transparency with the public at large, which in turn contributes to potential donors and volunteers' confidence in an organization's legitamacy. With increased confidence it is more likely that people actually donate/volunteer--and thus the cycle completes itself.
We are not claiming that MEOG single-handedly changes the world, but it is not unrealistic to suspect that by changing how the disparate parts of the international development community interacts, you can make the whole more effective. Facebook.com has already changed the way that people stay in touch and interact with their network of friends and acquaintances, yet the full extent and power of that change has yet to be fully realized. There is no reason to presume why such an approach to interconnecting the international development community wouldn't have a similarly profound impact on our ability as a species to effectively address the problems that we face.
~Justin Podbielski
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Director: Many Efforts, One Goal (MEOG)
justin@manyefforts.com
www.manyefforts.com

