Giving back, one click at a time

Online donations are growing at double-digit rates, despite the recession.

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American Red Cross volunteer Susan Waananen in front of the Donor Wall, which features the names of people who gave funds for the building.

Photo: Joey Mcleister, Special to the Star Tribune

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For years Susan Waananen wrote checks to her favorite charities, sticking a stamp on the envelopes and driving them to a mailbox. The routine seems likes ancient history to the Maple Grove donor, who now does all of her charity giving from the comfort of her home computer.

"It's very efficient,'' said Waananen, a longtime community volunteer. "I know it [the donation] is going to arrive right away. It's easier to keep records. And it doesn't take much time.''

Thanks to donors such as Waananen, online giving has exploded into a $22 billion industry nationally. That's up from barely $7 billion in 2006, according to the Blackbaud Index of Online Giving, one of the nation's top sources of such data.

Donations have climbed steadily since 2006, when nonprofits began experimenting with the then-novel idea of transforming their web sites into donation tools.

"Online giving continues to grow at a double digit rate, in spite of the recession,'' said Steve MacLaughlin, coordinator of the 2011 Blackbaud Index of Online Giving, an annual report from the South Carolina-based Blackbaud, a leading global provider of services to nonprofits.

"Online donors tend to be younger than traditional donors,'' he said. "They tend to be wealthier.''

It was the earthquake in Haiti that gave online giving a significant surge. Giving grew 43 percent between 2009 and 2010, said MacLaughlin. It jumped another 13 percent in 2011, and is on track for growth this year, he said.

That said, online giving remains less than 10 percent of all charitable giving in the United States, he said. But its meteoric growth points to its popularity among donors and charities.

Boom in Minnesota

Minnesota nonprofits, which historically planned their fundraising around direct mail appeals and phone solicitations, say online donations have been both a reward and challenge.

Lori Bents, development officer for the American Red Cross, Northern Minnesota Region, said online transactions have freed up staff to create more personal relations with major donors. And it's a relatively hassle-free, inexpensive way to raise money.

"It doesn't cost postage, doesn't cost paper, doesn't cost envelopes,'' Bent said.

More than $12 million was sent to the local Red Cross through its website last year, the first year the charity collected the data. The average donation was $500 to $1,000, Bent said.

Catholic Charities of St. Paul-Minneapolis also is a major convert. Web-based donations allow supporters to contribute to their charities any time, and often anywhere, instead of when a mail solicitation happens to arrive at their home, said Tina Palmer, the charities' senior development director.

"It gives people an opportunity to respond to something that touches them,'' said Palmer. "It could be a story they see in the media, or driving by one of our homeless shelters, and seeing people lined up to come inside.''

Online donations at Catholic Charities jumped from $159,000 from 380 donors in fiscal year 2009 to $459,000 from 1,477 donors in fiscal 2011. They ranged from $25 to $25,000.

And thanks to the surge, Catholic Charities had significantly cut its budget for phone solicitations as well as printed materials such as newsletters and annual reports, said Palmer.

There are a few modest downsides, she said. The charity must pay a small fee to the credit card company processing the donation. It also needs to pump cash into its online giving portal to keep it fast and user friendly.

Keeping its website fresh and donor-friendly has been a top priority for the American Cancer Society Midwest Divisions, said David Benson, vice president for marketing at the society.

"I think competition around online is very high right now,'' said Benson. "People's online experience is shaped by the other sites they go to. They want the navigation to be fantastic. They want the visuals. ... The challenge for charities is to keep up.''

Online giving at the cancer society's many events, such as its Relays for Life, grew at from $4.7 million in 2010 to $5.3 million in 2012, said Benson. During that same period, off-line fundraising was flat, he said.

"The people who support us do a lot online: they shop online, bank online,'' said Benson. "We want them to be able to fight cancer online.''

Here to stay

Until roughly the past five years, online donations were not even tracked by major research organizations. The most recent study, the 2011 Blackbaud Index of Online Giving, showed several trends:

Large nonprofits with annual budgets of more than $10 million saw online fundraising jump nearly nine percent from 2010 to 2011. Medium-sized and smaller nonprofits enjoyed a 13 percent hike.

Education groups saw the biggest leaps. Education donations increased 26 percent over the previous year. Higher education donations climbed 21 percent. Arts and cultural organizations, 13 percent.

Large online donations helped drive the cash flow. In 2011, nearly 90 percent of nonprofits received a donation of $1,000 or more.

In Minnesota, at least, another factor has spurred the boom in online fundraising. That was the 2009 launch of GiveMN, an online giving portal hosting hundreds of Minnesota charities. In 2011, $18 million was raised through the site. During its annual Give to the Max Day last year, 47,534 donors logged into GiveMN.org and donated $13.4 million.

"Online giving clearly isn't just a flashy trend; it's here to stay,'' said Dana Nelson, executive director of GiveMN. "Whereas in the past, nonprofits were more testing it -- dipping into the waters -- today it's integrated into nonprofits' development plans.''

For donors such as Wannanen, that makes sense -- not just for her personal style of giving, but for her children and the next generation of charity supporters.

"People are online all the time,'' said Wannanen. "I don't think my daughters even own a stamp. They don't write out checks. That's the future.''

Jean Hopfensperger • 612-673-4511

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