Fundraising Essentials: Mobile Giving

Earlier this month, Paypal announced its 2014 charitable giving statistics. If there is one thing that the numbers tell us, it’s that donors are moving toward mobile devices as their preferred means of digital giving.

Paypal – an online payment service – saw a 50 percent overall increase in year-end giving, totaling $212 million in donations. #GivingTuesday had its best year since its founding in 2012. Donors gave 66 percent more than they did through Paypal the previous #GivingTuesday, and mobile giving leaped an astonishing 101 percent.

The trend in mobile spending is not unique to nonprofits. On Black Friday this year, retailers witnessed a 62 percent increase in Paypal purchases made through mobile devices.

The biggest reason for this development is that mobile giving is extraordinarily easy. Revolutionizing during the tragic earthquake in Haiti, nonprofits adapted text-based donations into their campaigns with great success. By simply responding to or sending text messages, donors could send gifts in response to ongoing events completely hassle-free.

Political campaigns took the strategy one step further during the 2012 presidential election. Campaigns stored their donors’ credit card information, soliciting funds via emails that allowed repeat donors to merely click a giving level to immediately send a gift.

Mobile fundraising simultaneously taps into the immediate psychological gratification that derives from charitable giving, while also satisfying consumers’ ever-growing preference for convenient, streamlined, and user-friendly digital designs that simplify financial transactions.

Take tipping at restaurants and cafes, where a similar trend has emerged. Tipping has increased due largely to the intuitive design of iPad checkouts, through which a click of a button enables the consumer to tip without experiencing any interruption to flow of the transaction

Advancements in computer technology have driven the size of consumer electronics down, while greatly increasing their capability and utility. In thirty years, we’ve seen seen the arc of technological progress span between the release of the household desktop to this year’s highly anticipated iWatch.

Consumer behavior – part catalyst for this rapid change, but itself molded and affected by technological progress – now evolves at a quicker rate than ever before. Keeping track of this evolution is essential market-watching for fundraising professionals.

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.

#GivingTuesday’s Big Impact on Philanthropy

The optimistic projections were correct—#GivingTuesday was a roaring success, as non-profits across the globe successfully raised millions of dollars.

The Lilly Family School of Philanthropy at Indiana University plans to release a comprehensive report in the coming months. The Case Foundation has given an initial fundraising estimate at $45.7 million, indicating a 63 percent increase in overall revenue from 2013.

Jean Case—CEO of the Case Foundation—commented on the numbers: “Just as Cyber Monday and Black Friday are key indicators of consumer sentiment and economic health, this data on #GivingTuesday can serve as an indicator of the health of our giving economy.”

Where #GivingTuesday has grown, the consumer-oriented days surrounding it have suffered. On Black Friday, sales were down 11.3 percent from last year, and Cyber Monday sales were up a paltry 8 percent.

Non-profits who made out on #GivingTuesday can—in part—credit the ALS bucket challenge for their success. For the first time, a social media campaign attracted a broad array of demographics to get behind a unifying message, thereby raising millions of dollars. Having happened within the last year, this likely prepared social media users for #GivingTuesday. The ALS challenge habitualized the online community to charitable giving. Inculcating this habit has evidently paid off, creating a receptive class of online donors.

This year, #GivingTuesday also attracted more participating organizations than ever before. Over 20,000 non-profit organizations partnered up, a significant increase from the original 2,500 that participated in 2012.

That kind of momentum is big. As more organizations participate, the more institutionalized and recognized #GivingTuesday will become. Indeed, the social media-oriented event may well become the single most lucrative day for non-profits annually.

Philanthropists and organizations participated in numerous ways. In what may become a reoccurring fundraising strategy, Seton Hall University synthesized a traditional fundraising model with #GivingTuesday-style online crowd-sourcing. An anonymous donor pledged $100,000 if small donors matched the amount. The school exceeded the donor’s goal, raising $415,000 by the end of the #GivingTuesday challenge.

#GivingTuesday is also attracting prominent spokespersons. Ed Norton is no stranger to fundraising. The famous actor began a for-profit fundraising platform called CrowdRise in 2009. He integrated #GivingTuesday into his website, and offered his thoughts on what the day means and how his company chose to participate: “People like to see and feel that they’ve been a part of something big, and so we wanted to create a campaign that shows the collective impact of giving on Giving Tuesday.”

The campaign he refers to is the CrowdRise Giving Tower, an app that allows users to “see the world’s charitable efforts grow in the form of a tower made in augmented and virtual reality.” The app works by creating a visual representation of global charitable fundraising, stacking bricks higher as more money is raised in an interactive digital art piece. As groups develop new virtual assets around #GivingTuesday, they place greater stock and investment in the day itself, endowing it with greater financial significance.

The international character of #GivingTuesday was in full view this year. Over 68 countries participated. From Argentina to Singapore, Spain to Israel, people across the world engaged online, donating to their favorite charities and spreading the message of giving. There were over 32.7 million Twitter impressions, and 698,600 hashtag mentions.

This grand scope heralds an even bigger, more successful year to come in 2015.

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