Special Report: Exclusive NPT Study

June 1, 2005       Paul Clolery      

Nonprofits and watchdog groups spend tens of millions of dollars each year so that donors can have information at their fingertips when a direct mail appeal arrives and the decision is made whether or not to make a gift.

For the majority of donors, it’s a waste of money.

According to a new national survey of donors performed for The NonProfit Times by Opinion Research Corporation, 61 percent of donors said that they never go on the Web to get more information before making a gift in response to a direct mail solicitation. And, of those who said they do go, only 11 percent go to the Web sites of the independent watchdog groups.

According to survey results, those who turn to the Web go first to an organization’s Web site (19 percent), followed by the watchdogs. A distant third and fourth place were online discussion groups (3 percent) and blogs (2 percent).

Although there are a few spikes or troughs in specific sub-groupings, the trend of people not using the Internet to learn about nonprofits holds across the board.

The response of the donors showed that charities are still trusted in American society. “When members of the public are asked, in response to a mailed solicitation, to give a $10 or $20 gift, they don’t go to GuideStar. They don’t call the state AG’s office for a ‘charity check.’ They don’t go to BBB’s Wise Giving Alliance or any other watchdog Web sites. Mostly they don’t even go to the Web site of the charity. They simply decide based on either prior history with the charity or the appeal itself whether to give or not,” said Geoffrey W. Peters, president of Creative Direct Responsive in Crofton, Md. “One presumes they feel good about giving but also just don’t want or need more than that good feeling.”

Asked about the concept of transparency and accountability, Peters said, “What little charitable fraud there is in the sector is mostly not related to these low-dollar solicitations. It is related to failures of boards of directors to exercise their fiduciary responsibility or occasionally to outright theft and embezzlement. The former can be the source of IRS sanctions and the latter two are crimes, and all are rare. The publicly available data show these events of fraud, waste and abuse in the nonprofit sector comprise a minuscule percentage of all crimes and even less than 1 percent of all fraud.”

What is surprising in the numbers is how little they have changed during the past few years. The BBB Wise Giving Alliance in Arlington, Va., asked donors a similar question in 2001, said Bennett Weiner, the group’s chief operating officer.

“We had done, in 2001, a donor expectations survey as part of research in updating charity standards which we eventually revised in 2003. One question on our survey, ‘have you ever personally gone online to look for information about a charity to help you make a decision about giving,’ which is not too far removed from what you have. The overall response we had was 21 percent said yes,” said Weiner. “On the survey you have, in terms of looking up information on the Internet, you had a 25 percent response. What it shows is in the four years that have passed Web usage has gone up. I don’t know if 4 percent is going to be statistically significant enough to show a real trend. The fact that the numbers are pretty close, I thought it would be an even higher jump.”

Weiner said that the results “reflect something we have known for a long time, that many individuals give based on the charity’s name alone or based on what they believe is their prior understanding of what the charity does or on some similar type of factor. That can be, in part, a reflection of their faith and trust in charity, and it also may be a reflection of how much time they are willing to spend on making that decision.”

The sub-groups

Gender seems to play almost no part in distinguishing those who look up organizations from those who do not. Of those respondents who said they check an organization on the Internet, 26 percent of male respondents and 25 percent of female respondents said they refer to the Net in general. There was almost no difference among the type of site checked.

An age breakdown reflects the disparity that exists between those who grew up with computers and those who did not. In the 18-24 age group, 31 percent check the Internet, the same as with the 25-34 group. There is a jump to 34 percent in the 35-44 group, but the percentage then tails off with 27 percent of respondents in the 45-54 group, 20 percent in the 55-64 group and 8 percent in the 65 and older group. These numbers show a big preference for the organization’s Web site (28 percent in the 18-24 group, for example) over the other sites (8 percent for independent rating organizations, 5 percent for online discussion groups and 3 percent for blogs, in the same age group.) The same type of preference held up for each age group, although those 65 and older would prefer checking an independent rating organization to an organization’s site, 7 percent to 3 percent.

“You’re looking at the intersection of those who are likely to donate or are interested in donating and those unlikely to go online at all. The working-age person, someone who uses their computer every day because their job requires it, is very Internet-attuned and it’s easy for them to search online because they do it all the time,” said Harry Gruber, M.D., co-founder and chief executive officer of Kintera, in San Diego.

Geographic area shows a slight difference in overall Internet use, although the differences bounce around sharply when looking at specific Net venues. Of respondents in the Northeast, 26 percent report checking the Internet, compared to 24 percent in the North Central part of the country, 24 percent in the South and 28 percent in the West.

Looking at specific referrals, however, shows that 23 percent of those in the Northeast go to a nonprofit’s Web site, compared to 16 percent in the North Central, 18 percent in the South and 21 percent in the West. The same type of difference shows up in those who check online discussion groups and changes only slightly for blogs. For independent rating organizations, there is very little regional difference at 12 percent, 12 percent, 10 percent and 11 percent. For online discussion groups the figures are 6 percent in the Northeast, 2 percent in the North Central and South and 5 percent in the West. For blogs, the numbers are 4 percent in the Northeast and 2 percent for the others.

Living in a metropolitan area as opposed to a rural area made a difference, although it was a slight one. Some 26 percent of respondents in metro areas reported checking the Net, compared to 22 percent in non-metro areas. Regarding the sites they check, 20 percent of metro respondents and 17 percent of non-metro respondents check an organization’s Web site, 11 and 10 percent, respectively, check independent rating organizations, 3 and 4 percent check online discussion groups and 2 and 3 percent check blogs.

A racial breakdown shows slight disparity in overall Internet use with sharper disparities coming in particular reference sites. In the group identified as White Only (non-Hispanic), 26 percent reported checking the Net. In the Black Only (non-Hispanic) group, that figure was 28 percent. In the group identified as Hispanic (any race) the number was 23 percent. The Black respondents clearly favored checking an organization’s Web site, at a rate of 26 percent, compared to 19 percent for the White group and 18 percent for the Hispanic group. Whites showed a preference for independent rating organizations, at 13 percent, compared to 5 percent for Blacks and 7 percent for Hispanics. The numbers for online discussion groups were White, 3 percent; Black, 5 percent; Hispanic 7 percent. For blogs, it was White, 2 percent; Black, 5 percent; Hispanic, 4 percent.

Household income is one area that showed differences in Internet usage proportional to income level. Of those households reporting income of $25,000 or less, total Net use was 14 percent. For income of $25,000 to $35,000 it was 21 percent, for $35,000 to $50,000 it was 29 percent, for $50,000 to $75,000 it was 36 percent and for $75,000 or over it was 37 percent. In households reporting themselves as dual income it was 29 percent. In terms of checking an organization’s site, the percentages, respectively, were 12 percent, 12 percent, 20 percent, 28 percent and 29 percent. For dual-income households it was 23 percent.

Household size seemed to make a difference. Of households of one person, 19 percent reported using the Net. For households of two people, it was 23 percent. For those of three or more, it was 29 percent. Similarly, 24 percent of families with no children reported using the Internet, compared to 28 percent of families with children. The numbers were virtually the same if the children were under 12 years old or between 12 and 17 — 28 and 27 percent, respectively.

Education level showed big differences. Of those who did not complete high school, 9 percent reported overall Internet use, compared to 20 percent of those who are high school graduates, 23 percent of those who have some college education and 35 percent of college graduates. In this breakdown, the highest percentage, 27 percent of college graduates, reported checking an organization’s Web site, compared to 14 percent who check independent rating organizations, 4 percent who check online discussion groups and 3 percent who check blogs.

Donations to charity over the Internet represented only 2 percent of all giving in 2003, according to a NonProfit Times-Kintera study last year, the majority of that money is donated during the work day. “It’s like a toothbrush. Everyone is on the Internet if you’re below a certain age. We see most giving occurring during working hours, 90-plus percentage. That’s true for Amazon and AOL. Most of their activity occurs during the workday,” said Gruber.

He said he was surprised by how many people went to the Web. “Obviously financial transparency is key to the donor. However, I think there’s a huge focus (by the industry) on dollars spent for programs. I don’t think the donor ever really relates to that. The donor really looks at emotional reward versus dollar spent,” said Gruber. “Yes, they might want to know the charity is registered with the IRS, but the financial numbers are really opaque no matter how they are presented to the donor because they don’t speak to them.”

The numbers do show that there’s an opportunity for charities, said Gruber. “If 25 percent of random people will go to your Web site after getting a direct mail piece, even if you can’t up your donating rate, you have a chance to influence them so that future mailing or even the Web could convert” them if they don’t give initially, said Gruber.

Weiner disagreed that size of gift plays a major role in whether a potential donor checks the watchdog groups. “Many of the individuals who contact our offices are not high-end donors. They may be getting a request for $25 gifts or $30 gifts and still want to know about an organization before they send in a contribution,” he said. During 2004, there were 2.3 million look-ups on the give.org site. Weiner said the actual number of individual donors was not available, in that someone could check many reports, with each counting toward that 2.3 million number.

“I think the size of the gift certainly has an impact on many, but the smaller the gift, the less risk they see for themselves in making the donation,” said Weiner.

Another opportunity the numbers show is for major gifts. “Obviously, the wealthier people are more likely to go to the Web. You start to recognize the Web is a really powerful tool for major gifts, not only small gifts,” he said.

Growth of the Web is not going to be from more people going online. According to Gruber, “Growth is going to come from more people feeling more comfortable online. I think the instant gratification of a receipt, a Web-based form, as well as an email are both important, much more important than people give them credit. Direct mail doesn’t really give that instantaneous response. On the Internet, donors expect that.”

More to do

With the quick information available, watchdog groups need to do more to let donors know information is available, Weiner said.

“We recognize there is a need to extend our public outreach and we do that each time there is a major interest in giving, whether it be after a disaster or a relief organization are active, during the holiday season and other points where there might be a high point of thinking of making a contribution quickly,” he said.