How Nonprofits Use the Internet to Get Ahead
March 22, 2004
You’ll need more than a nice-looking Web site and a
“Donate Now” button. Experts swapped tips at the 2004
Social Enterprise Conference.
May 16, 2005 Issue
The Internet can be a fantastic tool for fundraising and for
engaging your constituents, but it needs to be powered by a smart
That was the message from four experienced devotees of Internet
use for nonprofit organizations at the 2004 Social Enterprise
Conference on March 6, in the panel session titled "Internet
Strategies for Nonprofit Marketing, Campaigning, Advocacy, and
"Just putting up a Web site and a 'Donate Now' button doesn't
mean money will come flowing in," said Ted Hart, president and CEO
of ePhilanthropy Foundation, based in Washington, D.C.
"There are no shortcuts to raising money online or offline," he
added. "But with technology, there are more efficiencies and the
opportunity to reach out to more people. And that is what should be
drawing nonprofits to the use of the Internet."
By looking at both fundraising and building relationships,
panelists agreed that one doesn't work without the other. In the
arena of online fundraising, however, the numbers are impressive.
Using donor profile statistics from HJC New Media of Toronto, Hart
said that online giving ballooned from just $10 million in 1999 to
an estimated $1.9 billion in 2003. Online donations are still a
small part of overall giving, but at the present rate, by 2010
one-third of money donated will be given online, he predicted.
you have, the more bidders there
|— Jon Carson,
For donors, the Internet is a fast-growing segment of fundraising
and more donors expect to use it, said Hart. They also see the
Internet as a way to get information and communicate with charities.
Donors expect more transparency and stewardship than before. And,
contrary to the impression many have that online giving is dominated
by people in their twenties, most donors are aged thirty to
fifty-nine, according to Hart.
The basic rules of mission, fundraising, and governance still
apply even though technology and new media strategies are changing
how nonprofits and non-governmental organizations operate, said
Steve Delfin, Booz Allen and Hamilton's worldwide director of
Web-based auctions are one way to blend mission and fundraising.
Jon Carson, CEO of cMarket, a Boston-based startup, saw an
opportunity by recognizing that auctions such as eBay and Yahoo have
carved out a successful Internet model in the mainstream, yet
physical auctions for charities are usually limited by the number of
people who can fit in a room. Many nonprofits are starting to build
substantial e-mail lists. Carson said he saw online auctions for
nonprofits as a creative way to take advantage of the Internet's
power in such a data-intensive activity. His company gives clients a
Web publishing tool that allows people to go to the auction homepage
and browse an online catalog of items for bidding. There is also a
bid tracker. Using the e-mail database expands the number of
"More bidders equal more revenue. Better execution also equals
more revenue," he said. "There is no magic. It's a math problem. The
more e-mail addresses you have, the more bidders there are."
Asked how his company overcomes the complaint that online
auctions are eliminating an important feature of charitable
giving—the personal interaction between donor and charity—Carson
said many clients don't want an either/or situation and actually
prefer a mix of online and offline. Using the example of a hospital
fundraiser, he said the opening bids at the physical event were the
final bids from the hospital's online auction that had closed the
Learning from Howard Dean
The Dean political campaign was a good case study of the Internet's
potential and its limitations. Dean's online component was powered
by Convio, a nonpartisan company founded and led by Vinay Bhagat
(HBS MBA '98), one of the panelists. Though Convio helped the Dean
campaign raise $18 million online in just nine months, with an
average gift of just $68, the campaign fell flat by the time the
Democratic primaries rolled around.
"Don't blackball the Internet just because the [Dean] campaign as
a whole didn't work," Bhagat said, acknowledging a comment from the
audience that perhaps the online component lent the campaign a sense
blackball the Internet
just because the [Dean] campaign
as a whole didn't work.
|— Vinay Bhagat,
On the positive side, he said, the campaign did engage thousands
of people in the political process who hadn't taken much interest
before. In that respect the Internet was great for outreach, he
said. It mobilized 630,000 to sign up for electronic updates and
180,000 for so-called meetups, where volunteers got together to meet
like-minded people stumping for Dean.
"If you think about how the campaign operated and contrast it
with how most nonprofits operate, first and foremost, Howard Dean
and Joe Trippi on down viewed the Internet as a strategic marketing
tool," said Bhagat. "It was made a core part of strategy, not
relegated to IT or even communications. They integrated the Internet
with all of their activities. They used the Web as a way to reach
out and engage a constituency and get it motivated."
According to Bhagat, there are several enduring lessons from the
Dean campaign that can be used by other advocacy groups and
nonprofits in the future.
- See the Internet as a strategic marketing tool and use it as
such, not just as an IT tool.
- Develop a systematic approach to relationships. The Internet
is not just for accepting online donations. Many people want to
help in other ways, too.
- Execute micro campaigns. "Don't just have a sign that says,
'We're trying to raise $2 million.' Parcel out your fundraising
objectives into manageable goals," he said. Make the "ask" often.
- Ask your strongest supporters to give more. Have them engaged
in volunteer fundraising as well.
As a starting point, nonprofits should set up incentives for
people to give out their e-mail addresses, he added. This e-mail
address acquisition has to be a focus. And as happened in the Dean
campaign, people may develop blogs that will comment on your
nonprofit's work. "You can't control blogs, but it's a participatory
audience, too," he said.