Giving Up 4.9%, With Online Shrinking as a Percentage

February 4, 2014       Patrick Sullivan      

Americans gave 4.9 percent more to charity during 2013 compared to 2012 but, surprisingly, online giving was a smaller percentage of the whole pie. Online giving was 6.4 percent compared to 7 percent in the previous year, although online did gain as a standalone category.

Last week the White House released projections estimating the 2013 gross domestic product at 2.7 percent, so giving beat it by 2.2 percent.

Hurricane Sandy, which hit the East Coast in late October 2012 affected online giving in a big way, and there was no comparable event in 2013. Those are some of the results of Charleston, S.C. tech company Blackbaud’s 2013 Giving Report.

“We’ve looked at the percentage of total fundraising from online for many years now,” said Steve MacLaughlin, director of Blackbaud’s Idea Lab. “The general trend is, because it’s still less than 10 percent, it’s still susceptible to spikes. If you look at organizations that had really positive increases in overall fundraising, like faith-based organizations and educational institutions, those are organizations that have always traditionally raised a smaller percentage online.”

Though online giving as a percentage of total giving was down, overall it increased 13.5 percent year-over-year. The inclusion of faith-based organizations in the online giving numbers for the first time had an appreciable effect on online fundraising as a percentage of the total, said MacLaughlin.

“We know in the U.S., faith-based organizations and educational organizations represent the two largest sectors where giving goes,” he said. “If faith-based organizations only raise 4.2 percent online, that weighs things down. We saw an increase in giving to educational and faith-based organizations. Those organizations have smaller percentages of giving online. Therefore, the number goes down.”

The overall giving numbers are based on a sample of 4,129 nonprofits with compiled giving of $12.5 billion. The online giving sample is 3,359 organizations with overall online giving of $1.7 billion. Large organizations made the biggest jump in overall giving in 2013, up 5.7 percent compared to 2012. Medium and small organization gains tracked closely together, at 3.8 percent and 3.6 percent.

Small organizations had big gains in online giving last year, with an 18.4 percent increase. Large organizations saw a 12.7 percent increase in online giving. The increase was 11.3 percent for medium organizations. MacLaughlin said, “Small organizations don’t have giant direct mail programs. Online is their driver.” Small organizations raised 7.8 percent of total dollars online, while large organizations raised 6.8 percent and medium organizations raised 5.4 percent.

MacLaughlin believes that online giving will be susceptible to fluctuations until it reaches 12 to 15 percent of overall giving, which he said is still a few years away. The gains in online giving last year are heartening, said MacLaughlin, because the upward trend shows “more organic growth as opposed to episodic giving.” The report cited the Boston Marathon bombings of April, a May tornado in Oklahoma and November’s Typhoon Haiyan in the Philippines as drivers of online donation. But, there was no single event in 2013 that had the impact of Sandy.

International affairs organizations had the largest overall fundraising jump in 2013 at 13.2 percent. Animal welfare and environment organizations, and educational institutions also performed well, with gains of 8.6 percent and 6.5 percent. The smallest gain was 1.4 percent seen by medical research organizations, a new category that had previously been a part of the healthcare category.

Faith-based organizations had the biggest bump in online fundraising, at 18.1 percent. These organizations raise the lowest percentage of overall giving online, at 4.2 percent. This year is the first that faith-based organizations have been included in the online giving sample. “We felt like we had enough revenue and enough organizations for it to be statistically significant,” said MacLaughlin.

December remains a big month for giving to nonprofits, though it was down slightly from 2012. Organizations overall raised 17.5 percent of their yearly totals in December 2013, as opposed to 18 percent in 2012. The drop, said MacLaughlin, is most likely due to effects of giving to Hurricane Sandy relief efforts in December 2012.

The second annual #GivingTuesday event fell on December 3 in 2013, and Blackbaud processed more than $19 million in donations, up 90 percent or $9 million from #GivingTuesday in 2012 (about half, or $4.5 million, was raised by the United Methodist Church General Board of Global Ministries).

“The important thing about #GivingTuesday is it drives online giving and other giving earlier in the holiday season rather than at the end,” said MacLaughlin. “There’s a real storm brewing when it comes to last-minute end-of-year fundraising. I won’t even give data out on the last two days of the year because it encourages strategies around procrastination. Organizations are much better off doing it earlier.”