The Holidays Are a Time for Online Giving

Online giving to charitable organizations has doubled over last year, but several non-profits are turning online for their year-end push for contributions.

“Given that the Internet is a great one-to-one marketing tool for consumers, it’s not surprising that — if non-profits do their jobs well — people are happy to donate online,” Harry Gruber, CEO of Kintera, an online technology provider for non-profits, told ClickZ News.

A mix of last-minute tax planning and generous holiday spirit has long led many Americans to make donations in December, Gruber said. Over the past several years, up to 40 percent of giving has occurred during the month of December, with the final days accounting for the heaviest donations, according to a 2004 Network For Good survey of non-profit organizations.

That pattern is continuing online, according to Bill Strathmann, CEO of Network for Good. Network for Good was founded in 2001 by AOL, Cisco Systems and Yahoo, as a way to make contributing to charities online as fast, easy, safe and convenient as shopping online, Strathmann said. Network for Good does this by offering its payment transaction services to non-profits for a 3 percent fee to cover bank fees, or for a small fee for a private-label version.

“We expect to process in the last two days of the year as much as we typically process in a month,” Strathmann told ClickZ News. To illustrate, he pointed to August and September 2003 monthly totals of $460,000 and $470,000 — compared with December 30, 2003’s single-day total of $420,000 processed, and December 31’s $700,000.

In a year that saw a tsunami, several major hurricanes and earthquakes, there has been an increase in donations to disaster-relief organizations. But charities in other categories are finding it increasingly difficult to reach their goals, leading many to re-think their outreach efforts and consider online marketing.

“It really requires a savvy marketing approach, which is stereotypically something that non-profits have not done well,” Strathmann said.

Some Web-savvy companies are stepping into the void. In particular, Yahoo has launched a “Cyber Giving Week” initiative, in partnership with Network For Good, to provide donation links and resources on a microsite. Yahoo will promote the site throughout its network, giving it front-page play on December 25 and December 30.

One message that many charities are highlighting is Congress’ passage of the Katrina Emergency Tax Relief Act of 2005, which increases the amount of charitable contributions that can be deducted from personal income tax, creating more of an incentive for donors to contribute beyond what they may have already given to disaster relief efforts.

Beyond that, the messages often center on compassion, with healthy doses of viral marketing designed to spread the word. Heifer International, an organization that provides livestock to families in impoverished areas, created whimsical email cards for donors to share with friends and family, in whose honor they make a donation. One features a cow, goat, pig and duck riding together in a sleigh and singing “Jingle Bells,” with a link to Heifer’s gift catalog.

Network for Good ran its own viral campaign, created pro bono by St. Louis-based creative shop Rodgers Townsend. In it, users are encouraged to see how easy it is to donate online, by helping a Flash-based character get a piece of lettuce out of their teeth — and pulling out a whole leaf, for example.

“Philanthropy is entertainment with a purpose,” Gruber said. “For the consumer, giving online is all about emotion — they expect to feel as good or better than when they go to eBay or Amazon. That means the non-profit’s site needs to offer engaging stories, compelling artwork, and powerful viral marketing tools.”

Online donations grew by nearly 60 percent from 2003 to 2004, compared to traditional giving’s 1 to 2 percent year-to-year growth, according to a June 2005 Kintera/Luth Nonprofit Trend Report. The report found that U.S. households donated more than $3 billion online in 2004, and the same study finds that the Internet played a role in influencing more than 65 percent of donors, with the majority of those who receive a direct mail piece going online to learn more before making a donation.

Network for Good is on track to double its online donations for the year, reaching nearly $29 million so far. “We’ve already done $3.9 million from December 1 to 27, compared to $2.2 million in the same period last year,” Strathmann said.

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