Has Digital Disruption Skipped Fundraising?

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The intent of today’s blog is to start a dialog. So, I hope you choose to offer your 2 cents.

Over the past 20-years, the digital economy has disrupted just about each industry. Particularly in the business to consumer arenas.

How we check out things we are interested in buying and how we purchase them has fundamentally changed. From buying clothes and plane tickets to watching our favorite movies – the internet is now the primary way we do these things.

Yet, there are two notable exceptions:

  1. Grocery shopping
  2. Donating money

While there are digital components to each of these exceptions, they remain minor components.

I have some hypotheses. But I’d really like to know what you all think.

Why haven’t these two industries been disrupted? And are there any similarities about grocery shopping and donation money that might help us understand this all better.

I’m all ears.

3 Comments

  1. avatar

    Thanks Bill. Yes, spot on! The lack of genuine digital disruption in giving, fundraising and philanthropy surprises and confuses me. And I’ve been covering digital fundraising developments via my site since 1994.

    Yes, crowdfunding, online payment platforms, microfinance (like Kiva) and more initiatives have changed giving in some ways, and boosted income in impressive ways. But in a evolutionary way, over 25 years.

    But average household donations to charities in the UK haven’t changed much in the last 10 years.

    Genuine disruption would surely have seen the demise of one or two major incumbent fundraising nonprofits which didn’t see change coming. But can anyone cite cases where a new digital-first nonprofit took the rug out completely from under the feet of slower-moving more established organisations?

    Maybe disruption will come soon, perhaps through the application of machine learning and AI.

    I wonder if the lack of disruption or transformation is due to the fact that giving can take so many forms. It’s not like the relatively simple process of researching and finding a product (including groceries) and then paying online and receiving the product(s) through the post or delivered to your doors.

    I wonder too if the lack of disruption is down to a sector that doesn’t always look outside its confines for inspiration or models to adapt. Our professional conferences, for example, have long been packed with how-to presentations of successful fundraising. (I recognise I am doing a disservice to many who are thinking and acting outside of these confines).

    So, thanks once again for raising this significant issue and question. I’m certainly looking forward to reading your hypotheses.

    Reply
  2. avatar

    Bill, great topic. I had to immediately go to the Internet to respond appropriately. According to Charity Navigator;

    M+R Benchmark Study
    The M+R 2018 Benchmark Study provides data regarding online fundraising, advocacy, and list building. This year, the M+R Benchmark Study analyzed the data of 154 nonprofits, producing a wide-ranging assortment of online nonprofit metrics.
    Highlights include:

    Online giving increased 23% in 2017, after 15% growth in 2016.
    Website traffic for nonprofit websites declined 1.4% from the year prior.
    40% of website traffic for nonprofits came from mobile users.
    Monthly online giving grew 40% from the previous year.
    One time online giving grew 19% from the previous year.

    I then remembered my baby boomer wife sitting in bed next to me last evening. She had just come in from the mail box with her Pottery Barn catalog under her arm. Sat down in front of the big screen TV and began thumbing through it. After referencing some of the items from the catalog on her IPAD, she grabbed her smart phone, looked up the nearest location and called the store to see if they were in stock. I realize this is a commercial example, however count how many medias she used and how she was connected to the brand.

    Nonprofits have to be vibrant in the digital space, it’s all about lifestyle. The actual transactions (gifts) will continue to increase because multichannel impressions lead to multichannel giving. If organizations have not built the right digital foundation, awareness and accountability, it’s time to start.

    Reply
  3. avatar

    Thanks Bill for a good question. Just getting to know your blog and already enjoying your posts.

    I have thought and have experimented a lot in this area with a couple of conclusions:

    1) There is a fundamental difference between nonprofit fundraising and for profit consumer industries:

    Typically, in industries like your grocery store example, there is an upper limit to the price of an item you purchase. This doesn’t happen in fundraising, gifts can be as large as the donor’s capacity/passion/trust in your org.

    2) Consequently, your fundraising revenue tends to be skewed toward larger gifts. Major gifts are typically not made online, but through a donor-advised fund, IRA distribution, by check, through stock liquidation or transfer, or in a will (planned gift), etc.

    In most organizations, this also means that you are going to dedicate more resources to these types of gifts since they are seen as more cost-effective.

    ***

    Therefore, even if online fundraising is cost-effective and grows year after year, the true glass ceiling will break if/when we’re able to raise major/principal gifts online through digital media.

    Online giving will also continue to be an important (or maybe even the best) source of stable, unrestricted fundraising revenue in organizations that do not have a strong population of major gift donors: new nonprofits, nonprofits that are starting/rebuilding their fundraising program, or nonprofits that are going through financial turbulence.

    Does this ring in any way true to you?

    Reply

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