"Between 2000 and 2005, online giving by individuals grew exponentially, from $250 million to nearly $5 billion..."
Read more in this great white paper by The Hewlett Foundation and McKinsey & Company, The Nonprofit Marketplace: Bridging the Information Gap inPhilanthropy
Assuming that this trend will continue, are we going to see a day when a nonprofit will not need to know a consituent's street address?
Yawn. Does that sound trivial? Think again. Right now, nonprofits spend thousands a year supporting large, bulky donor management systems like Blackbaud and Convio. In them, they store every bit of info about a constituent. Lot of it is absolutely unnecessary.
That includes the street address. If direct mail goes the way of the dodo, then why does a nonprofit need a street address? What's the point? Email campaigns and online donations have replaced direct mail and checks, right?
Nonprofits who have a Facebook group or Cause really have all the information they need (and more!) about a constituent. Sure, they may not have their street address, but they know how many friends they have and what other groups they belong to, where they vacation, if they have kids, if they are married, if they like to post pictures, if they post videos, what they subscribe to, and SO MUCH MORE. And all the information is entered voluntarily and happily by the constituent. A donor management system that is essentially managed and updated by the constituents!
Today volunteers enter data "collected" from unaware constituents into a ghastly old CRM system. The software itself is very very expensive, the service from the companies is terrible, and entire donor management system model is very antiquated.
What we need is a lightweight app of some sort that can extract info about the members of a Cause and present it in a usable, platform independent format for nonprofit managers. Donor management may be the next killer app for Facebook. I think the success of their Causes program is evidence of this. The Causes technology is disruptive enough to make the donor management systems of yesterday obsolete.
Cue the music...Video killed the radio star...
Really, I'd like to have what you are smoking, lol.
You say Causes is successful? It's a joke. They are burning so much money with no hope for profitabilty with their current business model- it's like 1999 all over again.
No address? So tell me, how is an organization able to know their donor's propensity to give? That, my friend, is 75% based on their address- their real estate holdings- so that you can then target the right amount to ask for the right donor.
Finally, online giving accounts for less than 4% of ALL giving in the US. 4%. Not 20%, not even 10%. 4%. It's nothing.
Combined with the fact that the average donor is over the age of 60, and you will see that direct mail isn't going anywhere.
If someone took your strategy to abandon street addresses, they would quickly go out of business.
You do have one thing right though- social fundraising utilizing old fashioned email and the Internet can raise more money from fewer people. You don't need Facebook. You don't need Twitter. Old fashioned email works fine and is the most effective. Why? Because no one gives on Facebook, because they have no money.
Follow the money, and you will raise more money, period. Direct mail and major gifts will always lead the way, and on-line giving will NEVER replace it.
(If you don't believe me, when was the last time you processed a $10,000+ gift on-line. Who in the right mind would want to encourage that when you can write a check and save at least 3-4% of the gift????)
-The Non Profit Disruptor
Posted by: Non Profit Disruptor | September 22, 2009 at 03:43 PM
Thanks for the impassioned post my anonymous friend. Nowhere in my post did I suggest that major donations will happen on Facebook or online. I can respect your love of ancient fundraising tactics. I'm surprised that you didn't publish this post on a mimeograph and send the tablet to me by pony express. Of course, you would need my street to do that.
All kidding aside, I stand by my assertion that there absolutely WILL come a day when development directors will not need a street address.
You claim that nonprofits use street address data to get our home values and then they use this info to hit us up for money. You're right. But let me guess, you also believe that orgs have a right to check my credit score, dig deeper to see if I have kids and when they are going to college, find out what i drive, and so on.
I'm guessing that you use these same tactics at your org. This is probably why you didn't state your name. Perhaps it was good sense and not cowardice like i originally thought. Who would give to your organization?
The Draconian practices that you espouse will come to an end. Donors won't stand for it. And while you're at it, stop killing trees for your 2% return on direct mail. Send an email. Why do you need my street address? Are you coming over for dinner?
More corrections, regarding Facebook's financials: http://www.techcrunch.com/2009/09/15/facebook-crosses-300-million-users-oh-yeah-and-their-cash-flow-just-went-positive/
Today, FB is not a viable fundraising channel, but Causes with over million members are no joke. The foundation is there. You'd have to be blind or in a state of denial, which is what i suspect in your case, not to see it.
Posted by: Syam Buradagunta | September 22, 2009 at 09:09 PM