As Donor Behavior Shifts Online, Salvation Army Struggles to Raise Funds

The last few years have seen tremendous growth in philanthropic fundraising, as the economy slowly but surely emerges from the recession. Recent figures indicate that nonprofits raised $335.17 billion in 2013, a 4.4 percent increase from the previous year. This amounted to a 22 percent increase in charitable giving since 2009 (the year many analysts consider the official end of the recession).

With falling oil prices and 2014’s widely publicized online giving campaigns, this year should follow the growth trend. On #GivingTuesday alone, donors contributed a sizable $45.7 million, heralding the start of a new, lucrative tradition, and perhaps showing early signs of improving consumer confidence as energy costs begin stabilizing at low levels.

Not all nonprofits are feeling the love, however.

The Salvation Army’s red kettle fundraisers – stationed outside of retail outlets around the country – are a cultural staple of the giving season. The jingling bells and friendly volunteers remind gift-hunting consumers that there is more to the holidays than materialism. But this fundraising strategy is proving less effective than ever before, as Salvation Army chapters across the United States struggle to meet their fundraising goals.

Programs from Upstate New York to Kansas, Missouri to Wisconsin, and Iowa to North Dakota are falling far behind their goals. Some Salvation Army efforts have raised as little as 50 percent of their targets as they enter the final days of the holiday season.

So why are the red kettles empty? Specialists point to the shift in donor behavior toward internet-based donations. The online giving trend emerged in early 2012, when analysts noted a 14 percent leap in online fundraising from the previous year.

Web-based fundraising has a number of benefits. Development professionals and data analysts can comb social media and advocacy forums to find particularly vocal or committed prospective donors. Web-based monthly donations are also an easy sell, offering streamlined and paper-free subscription services that simplify the giving process.

Indeed, scores of the most impactful fundraising initiatives these days are only actionable on the internet, as evidenced by the wild success of the ALS bucket challenge. Friends and family members challenged each other using social media, exercising an effective, digital brand of peer pressure to solicit over $100 million in donations.

Another huge component to the digital transformation of U.S. giving behavior? Millennials.

Young adults are more likely to consider themselves philanthropists, with 26 percent of them self-designating as such as opposed to only 18 percent of baby boomers. The growing generosity of millennials goes hand-in-hand with recent fundraising developments on social media, where younger demographics are disproportionately represented compared to other age groups.

Salvation Army volunteers may be getting the snub because donor behavior is shifting solidly in the direction of online charity, as younger generations of donors become increasingly habituated to digital fundraising and other prospective donors have already been tapped by social media campaigns and other online nonprofit initiatives.

Consumer spending also appears to play an important role in Salvation Army’s troubles. Retailers had a slow start this year, with lackluster figures for Black Friday and a growing number of consumers shopping online. With fewer people walking in and out of stores, there are fewer prospective donors. The biggest shopping day of the year, however, is just around the corner, and perhaps a late surge in shopper confidence will help fill the empty red kettles.

But the needy are already feeling the effects of Salvation Army’s poor performance. In Elgin, Illinois, families lined up outside the area-Salvation Army headquarters to receive food stuffs for the holidays. Many were turned away empty-handed. One of the staff commented that it “was sad to see the need but even sadder to watch all the food dwindle away as the line of those seeking help grew shorter, then turning those in need away due to the lack of our food donations.”

No nonprofit wants its operations to shrink, especially one providing basic needs. If traditional means of fundraising are no longer sufficient to meet the same demand for its services, Salvation Army should look to expand its methods and strategies for 2015, exploring the possibilities of online fundraising and integrating with new charitable institutions such as #GivingTuesday.

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