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310 THE FUTURE OF ePHILANTHROPY the ideas of fundraising integration came into their own. For a more detailed examination of truly integrated (offline and online) fundraising, the reader should turn to Chapter 3. The United Way of New York desperately needed funds to provide service in the aftermath of the September 11 attacks. The United Way of Toronto wanted to help, and it found a way through the Tribute to Heroes Telethon. The telethon was simultaneously broadcast in Canada as it went to air in the United States. However, Canadians couldn’t call the 800 number that would appear on the U.S. broadcast. The United Way of Toronto decided to quickly implement an offline/online solution: 1. Use a Canadian 800 number for Canadians to call in to the United Way of Toronto donation center. 2. When donors called in, the in-bound telephone volunteers would have a computer screen with the United Way of Toronto Web site giving form ready to process the gift. 3. Once the credit card was processed automatically through the Web page, the telephone volunteer would ask for the donor’s e-mail address and tell the donor that they could receive an electronic tax receipt attached to their e-mail (in Canada, every donation over $10 must be officially receipted). In 48 hours, the whole system was set up, over 6,000 online gifts were processed totaling more than $500,000 (with an average gift of $81) and the majority of the callers received their tax receipt via e-mail within 24 hours. This was an incredibly elegant integration of offline and online media. But even if the creative and integrated approaches and underlying technology are changing and improving, has the demographic profile of the online donor changed as well? The only rolling study of online giving in one organization has been conducted by Greenpeace Canada: three times over a six-year period. In 1998, 2000, and again in 2002, the organization surveyed, through telephone and e-mail, online donors for those years (see Exhibit 20.4). The results of this rolling study show some broad trends: The predominant position of younger donors in 1998, for this organization, has fallen in importance. Middle-aged donors have begun to give in larger numbers. And finally, older donors, not represented at all in 1998, have become more comfortable and are giving in larger numbers. This is only one study, but an intriguing one. It points to a trend that most nonprofit organizations see in online giving—the fact that it’s no longer the domain of young people, but a medium being adopted by older individuals as well. To back up the fact that most organizations are finding more and more older online donors, here is another online giving study conducted at the start of 2003 for the relief organization, Doctors Without Borders (or Medcins Sans Frontieres). A total of 900 online donors (out of 3,000 2002 donors) responded to an online survey (see Exhibit 20.5). The reader may be a bit surprised by the fact that more than 50 percent of the Doctors Without Borders donors are over 50 years old. But the reader shouldn’t be. As 311 September 11, 2001 and Online Fundraising Greenpeace Canada Online Donor Profile 65 <35 36-45 46-54 55+ 60 Percent 43 40 36 30 29 26 21 21 20 14 8 7 0 1998 2000 2002 Year EXHIBIT 20.4 The Changing Demographics of Online Donors middle-aged people and seniors adopt online technologies they become more comfortable with them—perhaps making their first commercial purchases, then philanthropic ones, and finally telling their peers about this effective way to donate. The Greenpeace and Doctors Without Borders demographic surveys should remind the reader that as nonprofit organizations have been testing and improving their use of the Internet, there has been a parallel development in the demographic profile of the online donor. For example, as older donors come online, they demand more stable, more straightforward, less technical interfaces to conduct their business online. Nonprofit organizations, learning more and more about powerful online tools and their potential, listen to the demands from customers and ask vendors to deliver a better online giving product. If it’s true that a more representative sample of different age subsets have been giving online over the last six years, then how many organizations are they giving to? Very few studies can show us. An August 2003 study of online donors conducted by www.canadahelps.org sampled a few hundred nonprofit organizations, ranging from large to small, from health charities to environment groups to battered woman’s shelters. It was a broad and shallow survey of online donors who had given in 2003 (see Exhibit 20.6). The majority of the respondents indicated that they had given online to one or two charities in the past year. How does that compare to direct-mail donors? A 2003 survey of American and Canadian direct-mail donors conducted by Mal Warwick and Associates and The FLA Group, found that direct-mail donors gave on average to 10 or more charities.1 So it seems that the online fundraising space is much less cluttered 312 THE FUTURE OF ePHILANTHROPY Doctors Without Borders Online Donor Profile Age 2002 Percent 18-29 7.3 30-39 17.2 40-49 20.9 50-59 33.3 60-69 13.6 70-79 5.5 80 or older 2.2 EXHIBIT 20.5 Older Donors Are Becoming an Important Source of Online Gifts than the offline direct response world. Online donors generally give to between one and five charities and very few give to more than that. This may change as the medium matures, but for now, there are less charities competing online for the loyalties of online donors. It might also be true that online donors aren’t comfortable enough with the medium to give to more than just a few charities. Not only are readers wondering about the demographic composition of the online donor, they may also be wondering about their technical capabilities. Exactly what does an online donor understand of the medium—and what kind of connection to the Internet do they have? A description of the average online donor and their attitudes can be best understood through a telephone survey conducted by the U.S. fundraising firm, Craver, Matthews, Smith & Company in October of 2001 (733 donors participated). The reader can compare it to a similar Canadian study conducted in 2002.2 Some of the highlights can be seen in the following list: Broadband access Online at least 4 years Online every day Online banking Canada United States % 71 71 87 70 % 36 73 80 56 The Future of New Technology Fundraising Charities 313 Percent 1 44.2 2-3 28.6 4-5 16.9 6-10 5.2 more than 10 5.2 EXHIBIT 20.6 Online Donors Still Have Few Divided Loyalties In both studies, it became clear that younger online donors—individuals in their thirties—were the biggest e-bankers, with approximately 31 percent of Internet users aged 30 to 39 using it for this activity. Therefore, online donor surveys indicate a reasonable proportion of individuals with high-speed access (this has greatly increased since the 2001 and 2002 surveys) which means these donors can see content that demands a faster Internet connection. This means that online donors will have less and less problems viewing online video appeals. THE FUTURE OF NEW TECHNOLOGY FUNDRAISING If you retrace the steps offered in Chapters 1, 2, and 13 about ePhilanthropy and fundraising strategies, an organization can gather clues about the most effective and efficient deployment of what new technologies might offer, either tomorrow or even two years from now. Will the Web and e-mail be the future of ePhilanthropy? Yes and no. Some of the elements of ePhilanthropy from the past decade—like e-mail and the Web—will be reinvented in different formats like SMS text messaging via cellular phones and other wireless devices. So let’s take a look at what forward-thinking nonprofit organizations are doing now. It might just give us a window on the future of ePhilanthropy. Wireless Devices In the commercial sector, handheld devices that allow credit cards to be swiped for a product or service is something that car rental companies and others have been using for a number of years. Now, the nonprofit sector is investigating the effectiveness of using wireless devices for donations at events and for public canvassing. 314 THE FUTURE OF ePHILANTHROPY Nonprofit organizations should seek out the financial services vendors that provide these devices and find out how they can be used to raise money. One such vendor is Moneris, which can be found at www.moneris.com or www.monerisusa.com. For Trent University, www.trentuniversity.ca, the rental of a Moneris device allowed their fundraisers to process $60,000 on one machine, in one day, at their convocation. That is one heck of a good return on a $135.00 investment. Imagine an organization has a special event that includes both silent and live auctions. There could be trained volunteers walking around the event. Staff could not only take donations but could make sure other financial transactions like auction purchases are processed immediately. Though costs vary, an organization should expect to pay approximately the following: Credit card transaction fee: Debit transaction fee: Terminal pin pad fee: One-time activation fee: 1.68% (varies slightly) $0.15 / transaction $54.00 (wireless) / month $135.00 In the right location, with the right training, and the right event, a nonprofit could make thousands and thousands of dollars with a wireless device that can process gifts immediately. If more fundraising in the future—whether the first contact is at the mall or elsewhere—will rely on electronic media for future appeals and correspondence, then organizations must see electronic media as the sharp end of the stick in communications and stewarding donors. The use of the electronic environment to build a long-lasting relationship will be vital, and Chapter 12 provides an excellent case study about why online relationships have to be properly planned, tested, and supported with both human resources and technology. E-Stewardship New technologies can help improve the efficiencies of capturing the first gift and making sure information about the donor is properly entered into the donor database. The twenty-first century will be the century in which we know more about our donors—and can manipulate that data to the benefit of both the donor and the nonprofit organization. By using that data in a structured stewardship cycle, nonprofit organizations will be truly taking advantage of new technologies to build better relationships online— and offline. In many ways, creating an online stewardship plan is a way to make communication as efficient as possible—and free up more time for fundraising staff to spend ‘face time’ with as many donors as possible. In the future, a nonprofit organization will want to provide electronic communication to donors in order to do the following: Improve renewal rates, and/or increase (see Chapter 13) their regular gift in comparison to donors who receive mail and/or phone contact Allow donors to use viral marketing (see Chapter 6) tools to tell friends and family about the organization they support Putting It All Together—What Can the Future Hold? 315 Allow donors to use online event tools (see Chapter 14) to participate in other fundraising activities like a walk or run for the organization they already support with a regular gift Allow donors to use online tools to manage their own contact information (see Chapter 11) and give the organization more accurate contact data Allow donors to use online advocacy tools (see Chapter 9) The Cellular Phone The cellular (or mobile) phone is becoming an important, and convergent, piece of technology for consumers—and subsequently—nonprofit organizations. In many parts of the world, the cellular phone is becoming an important communication vehicle for politics, leisure, friends and family, and now, fundraising. They are also becoming incredibly sophisticated machines: they can receive and take pictures and video, access e-mail and the Web, and run multiple software programs. It’s not just for fundraising but a holistic connection of communications, marketing, and fundraising. Political parties are starting to use text messaging on cellular phones to do a number of things: Ask individuals who see a TV ad to enter a series of numbers to agree or disagree with a position Ask individuals to enter a number code to donate to the party After building a list of cell phone numbers—sending text messages immediately after a TV debate—ask them to vote on the winner or one particular issue from the debate with instant results Polling could be done from one phone—even done by the political leader—and the results instantly sent back and shown to the press For nonprofit organizations that have advocacy as part of their mission, the instantaneous, broad polling available through cellular phones is an important future possibility. PUTTING IT ALL TOGETHER—WHAT CAN THE FUTURE HOLD? First, it’s most likely going to involve new ways to acquire donors. As the phone and the mail become less important to the next generation of donors, new acquisition techniques—like mall fundraising—will appear. In the mall, fundraisers may be presenting riveting video material on giant screens—or on handheld computers—engaging interested citizens. When someone is interesting in giving, the fundraiser will take down the information instantly on a small computer—and process a credit card or EFT gift—with confirmation within seconds. Then, they’ll be asked if they’d like to keep in touch during urgent times by sharing their cellular phone number. That way, the next time a crisis appeal goes out, it arrives on someone’s cellular phone—a piece of video and a function allowing for instant donations. Current technology allows wireless cell-phone video reception and may soon add wireless disc players with this capability. Think what an organization can do with 316 THE FUTURE OF ePHILANTHROPY linking live transmissions to individuals or groups via both the Internet, telephone, and other hand-held devices. How about colleges broadcasting athletic events, lectures, public ceremonies? Or arts organizations’ time-delay interviews with current performers? Or hospitals sharing new medical applications and promoting advanced healthcare directives? Even small nonprofits can produce CDs (normal size and the smaller shape) on a variety of topics, program and service-oriented, as well as uses for marketing, communications, and fundraising purposes. Of course, this will all require the proper human resources to manage a twentyfirst century campaign, and Chapter 4 does a good job to prepare you for what online and new technology fundraising will require. PUTTING THE FUTURE OF ePHILANTHROPY IN PERSPECTIVE Over the last 10 years, the pace of technological innovation in fundraising—and especially online fundraising—has been ferocious. It’s going to be difficult to stay on top of the pace of change. The author hopes that the final part of this chapter will give some human perspective on ePhilanthropy. During the early 1970s, running water was installed in the houses of Ibieca, a small village in northeast Spain. With pipes running directly to their homes, Ibiecans no longer had to fetch water from the village fountain. Families gradually purchased washing machines and women stopped gathering to scrub laundry by hand at the village washbasin. Arduous tasks were rendered technologically superfluous, but village social life unexpectedly changed. The public fountain and washbasin, once scenes of vigorous social interaction, became nearly deserted. Men began losing their sense of familiarity with the children and the donkeys that had once helped them to haul water. Women stopped congregating at the washbasin to intermix their scrubbing with politically empowering gossip about village life. In hindsight, the installation of running water helped break down the Ibiecans’ strong bonds—with one another, with their animals, and with the land—that had knit them together as a community.3 Is this a parable for fundraising in the twenty-first century nonprofit sector? Like Ibiecans, we seem to acquiesce quietly to seemingly innocuous technological changes. We adopt more advanced databases, more powerful computers and their networks, e-mail, and Internet solutions—mostly without question. Have we thought clearly about the implications of these technologies for our sector and on the constituencies we serve? If we think that technology can have a profound impact on our sector, then the pace of technological change should make us pay even more attention. It took more than 20 years for radio to reach 50 million households in North America—50 million being a benchmark indicating mass communication maturity. It took just 12 years for television to reach the same saturation level and only 4 years for the World Wide Web to do it. Taking a Harder Look 317 If technological advances are reaching more people, faster, then we need to study these new technologies more thoroughly in order to decide how to adapt them to the nonprofit sector. Are technologies improving the ability of the nonprofit sector to fundraise more effectively—to better manage donor information and relationships? I would say a cautious yes, but we need to proceed carefully as we invest in new technologies (like an Internet presence and the further computerization of fundraising). We need to be aware of something called the Productivity Paradox—a concept that has emerged out of studies proving that worker productivity since the introduction of computers has either flatlined or declined. It’s also been called the Solow Effect. With all of the incredible investment in computers we’re still about as productive as before their introduction. There is one area where we’re much more productive—the manufacturing of computers themselves. I know many readers will say that the Productivity Paradox cannot be true when you consider how computers have allowed your nonprofit organizations to keep better track of donors, authorize donations, organize files, and communicate between staff, volunteer, and donors. While all that may be true, computers and their accompanying technologies can be incredibly difficult to manage and have unintended consequences. Now more than ever, we are being challenged by management issues arising from Internet use in the office. How do we craft an effective privacy policy? How can we create an e-mail usage policy that respects every worker by keeping management informed but allowing for everyone to fully utilize the Internet? How do we create effective job descriptions and management structures to deal with the introduction of greater Internet fundraising responsibilities? What does the Productivity Paradox mean to ePhilanthropy? It reminds us that computers are an incredibly powerful technology that needs precise and careful management to allow us to do our work more effectively and efficiently. THE HUMAN MOMENT Beyond the Productivity Paradox, the author believes there are other reasons for the nonprofit sector to be cautious about ePhilanthropy and the potent mix of associated new technologies (which will take forms like wireless, plasma screen, cellular phone, and mall fundraisers). Studies are beginning to show that the Internet could have detrimental effects on community and the social well-being of citizens. A Carnegie-Mellon study indicated that people who spend time online exhibited increased levels of depression and loneliness even when only connected a few hours a week. What this study tells us is that our sector needs to know more about the impact of these coalescing technologies on our nonprofit organizations and our relationships with online donors. TAKING A HARDER LOOK Although governments, private sector interests, and nonprofits are pouring more money into new technologies for the sector, there is very little study being done on the impact of these technologies on online giving. 318 THE FUTURE OF ePHILANTHROPY Technology philosopher Ursula Franklin, in a recent lecture, mentioned this possibility: The Internet will make it easier to give to an earthquake victim half-way around the world, but it makes it easier to forget about the homeless person on our own street. Will the Internet dislocate time and space when it comes to our caring for others in our own community?4 It would be a wise decision by foundations and government bodies to fund studies of online donors to determine the positive or negative social impact of this new philanthropic endeavor. No data currently exist, and studies would help citizens, nonprofits, and governments to begin to understand the social impact of online giving now and in the future. Similarly, we should be studying the impact that the online environment is having on other parts of the nonprofit organization. Are new technologies creating more stress within nonprofit organizations? Are they creating dislocation between nonprofits and the people they serve? We need answers to these questions as we move forward with these new fundraising technologies. The nonprofit sector is being told to adopt these technologies by government and business without fully understanding the implications of doing so. This is also a time of incredible pressure for nonprofit organizations. They are being asked to do more in an increasingly competitive environment. In this chapter, there was a reference to the town of Ibieca and its adoption of running water. The reader should wonder if that story could be the parable for the nonprofit sector’s use of online fundraising at the start of the twenty-first century. ABOUT THE AUTHOR Michael Johnston, president of HJC, is an expert in fundraising and the use of the Internet by nonprofit agencies. Mike has worked with more than 100 nonprofit organizations ranging from third-world development organizations, to hospitals, to peace and disarmament groups, in Canada, the United States, and the United Kingdom. He gained considerable experience as a senior consultant and director with Stephen Thomas Associates, one of the first fundraising firms in Canada to work exclusively with NGOs. He has been a past member of the ethics committee of the Canadian Society of Fund-Raising Executives (CSFRE) and was a volunteer fundraising leader with the United Way in its Management Assistance Program. Mike is also a past board member and current member of the Association of Fundraising Professionals (AFP) and sits on the AFP’s Volunteer Online Council in Alexandria, Virginia. He has recently joined the board of directors of the U.S.-based ePhilanthropy Foundation. Mike sits on the executive committee and is the chairman of the product development and education committee. Endnotes 319 Mike is a skilled communicator, and his skills are known throughout the nonprofit community. He is the author of The Fund Raiser’s Guide to the Internet and The Nonprofit Guide to the Internet and is the editor of Direct Response Fund Raising, all published by John Wiley & Sons. He has worked with a range of educational institutions, lecturing on the Internet and the nonprofit sector and has spoken at five AFP International Conferences, teaching both full-day seminars and short workshops. From his seminars to television appearances to his published articles, Mike has been able to analyze the implications of the Internet for thousands of people in the nonprofit sector. Michael Johnston is committed to the nonprofit sector and dedicated to helping organizations reach their charitable goals. You can e-mail Mike at mjohnston@hjcnew media.com ENDNOTES 1. The complete survey results can be found at www.theflagroupinc.com. 2. An online survey of 2002 online donors to Amnesty International Canada. 3. Richard E. Sclove, Democracy and Technology (New York: The Guildford Press, 1995), p. 3. 4. Ursula Franklin, lecture, The Real World of Technology Revisited, Ursula Franklin High School, May 10, 1999.
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