Online giving to the nation's largest charities continued its steep climb in 2005, according to The Chronicle's seventh annual survey of online fund raising.

ePhilanthropy Editor note: The ePhilanthropy Foundation estimates that total online giving in the United States reached approximately $4.53 Billion (USD), driven by significant increases in online giving for both small and large organizations and the unprecedented use of the Internet by individuals for non-disaster and disaster support efforts including the Southeast Asian Tsunami, and multiple hurricane relief efforts in 2005. The United States represents slightly more than 50% of the world-wide giving online. Global giving is estimated to have surpassed $7.5 Billion (USD).

The staggering sums of money donated online to aid survivors of the Indian Ocean tsunamis and Hurricanes Katrina and Rita explain part — but not all — of the increase.

A Boon for Big Charities

But even groups that did not raise money for tsunami or hurricane relief saw big jumps in online revenue. Among the 127 organizations in the survey that did not raise money for either emergency, the median increase in online giving was 50.5 percent, meaning half of the organizations reported bigger gains and half had smaller increases or declines. The median increase for all groups was 60.4 percent.

Despite the overall growth, the importance of online fund raising as a source of donations varies greatly.

Some of the very largest charities have demonstrated that online contributions can account for 10 or 15 percent of an organization's fund raising, says Jeff Patrick, president of Common Knowledge, a consulting company in San Francisco that helps nonprofit groups use the Internet for fund raising and advocacy.

"If that revenue went away, it would be difficult or impossible to replace," he says. "Now, is it that way across the board? No."

Mr. Patrick says that mid-sized groups — those with annual revenue between $5-million and $50-million — are more likely to be exploring online fund raising, rather than be fully committed to it. "They're still trying to understand what it means for them," he says, "what the true potential is, and how it fits into their overall fund-raising strategy and planning."

Mr. Patrick's observations hold true in the survey. The three organizations that raised the most money are among the largest charities in the United States: Fidelity Charitable Gift Fund ($180-million), the American Red Cross ($157.7-million), and United Way of America ($140.9-million).

Six other organizations reported Internet gifts totaling more than $20-million, and seven raised between $10-million and $20-million.

Online giving was an important source of revenue for charities providing aid after natural disasters last year.

The December 2004 tsunamis occurred during the 2005 fiscal year of most international relief organizations, so more than $252.5-million raised online after that disaster is included in this year's survey.

Similarly, some relief charities were still in their 2005 fiscal years when Hurricane Katrina struck the Gulf Coast in late August.

The groups that raised money in the 2005 fiscal year for hurricane relief have raised $77-million online to date, a portion of which is included in the survey. The unprecedented $479-million that the American Red Cross raised over the Internet after Hurricane Katrina fell into that group's 2006 fiscal year and will be reflected in next year's survey.

But while the Internet has become an important source of donations for some charities, other nonprofit institutions don't anticipate that it will play a significant role in their fund raising any time soon. At the University of Texas M.D. Anderson Cancer Center, in Houston, only $263,100 of the $111.1-million the organization raised last year came in online.

At this point, M.D. Anderson doesn't actively solicit electronic gifts, says Susan M. Riddell, who oversees the Web site and other technology for the group's development office.

"It's a conservative world here," she says. "E-mail is a good way to annoy people."

Internet's Role

For a few charities, the Internet has become central to the way they raise money.

Fidelity Charitable Gift Fund, a nonprofit organization created by the Boston financial-services company, allows contributors to open donor-advised funds, which they can use to channel money to charities they choose. The $180-million that the fund received online in 2005 represented a little more than 20 percent of the $891-million it raised overall. That total continues a trend that saw Fidelity raise $117.1-million online in 2004 and $61.8-million in 2003.

Since the beginning of 2005, 48 percent of all new donor-advised funds at Fidelity have been opened online, and donors used the Internet to earmark 70 percent of the gifts made to specific charities.

Having the technology to coordinate national employee-giving campaigns electronically has helped the United Way of America, in Alexandria, Va., and its network of more than 1,300 local United Ways compete against for-profit companies that run giving campaigns for corporations, says Michael Schreiber, an executive vice president at the national organization.

The vast majority of the money United Way of America raises online comes from on-the-job giving campaigns that are conducted electronically.

Employee campaigns at companies that returned to the United Way after using for-profit competitors accounted for $11-million of the $140.9-million the organization raised online in 2005. Another $18-million of the total was from campaigns at companies that decided to stay with the United Way after going through a competitive bid process that year.

Customized Pitches

Charities have long recognized the Internet's potential for better tailoring their appeals to individual donors, but only recently have they been able to start putting that promise into practice.

For example, the United Way's system for running online fund-raising drives not only maintains employee campaign data, says Mr. Schreiber, but also records information about volunteering, special events, and other activities. So if someone who has expressed an interest in children's issues participates in an online employee campaign, the organization can highlight its support to groups that provide early-childhood education in its appeal, rather than programs for the elderly.

United Way of America is making a concerted effort to collect information about supporters' interests whenever it can. And the online auction, to benefit Hurricane Katrina relief, of the gift bag that one of the charity's board members, George Clooney, received for his appearance at March's Academy Awards was no exception.

"The $45,000 for the actual bag is nice," says Mr. Schreiber. "But the real value is that we had 17,000 people who would not have otherwise come to our site register, provide information, and say, 'Yes, I'm interested in being engaged, and by the way, I care about these kind of things.'"

The San Francisco Symphony is also using donors' giving histories to customize its online pitch.

When patrons visit the symphony's Web site to renew their subscriptions, they are asked if they would like to make an additional contribution.

Two years ago the symphony purchased software that allows it to suggest a donation amount based on the donor's previous giving.

For example, if a patron donated $350 the previous year, a suggested amount of $500 would automatically pop up on the subscription-renewal form.

"We all know people respond to a specific figure better than a vague solicitation," says Bob Lasher, the group's director of development.

The approach has helped the symphony push the average online gift from $33 two years ago to $357 this year. And more than 80 percent of all patrons who bought or renewed a subscription online made an additional gift. With three months left in its 2006 fiscal year, the group has already raised nearly $500,000 online, up from the $290,027 it collected in 2005.

Mixing Strategies

Nonprofit organizations continue to look for ways to make their online and offline fund- raising efforts work in tandem.

In March, Compassion International, a Colorado Springs charity, held an online discussion about its work helping children in Africa who have HIV or AIDS — two months before sending out a direct-mail appeal on the topic. Of the 2,500 supporters who received an e-mail invitation to participate, about 65 tuned in to listen and ask questions of the organization's program director.

Results from the direct-mail appeal are still coming in, but Laura C. Fisher, the group's development director, thinks the forum provided a chance for donors to learn more about the charity's work. "We can give folks information via mail," she says, "but the Web allows for interaction."

Too often competition between different parts of a charity's fund-raising department impede efforts to mix traditional mail appeals with electronic appeals. But Save the Children is trying to defuse that tension by restructuring its fund-raising goals.

This year, the Westport, Conn., charity sent postcards encouraging donors to visit the organization's Web site and e-mail messages alerting donors about forthcoming direct-mail appeals. But the group found that it was difficult and time-consuming to try to figure out which gifts should be credited to mail and which should be credited to the Internet.

So in the organization's 2007 fiscal year, 10 percent of the revenue goal for direct mail and the Internet will be assigned to joint campaigns.

"Whenever we do a coordinated program, we're going to give credit to that bucket, not to the Web team, not to the mail team, but to the combined team," says Brian Sobelman, an associate vice president at the organization.

He thinks the combined goal will force fund raisers to think more holistically: "It replaces competition with collaboration."

Solving Puzzles

Some charities are looking to the Internet to help tackle specific challenges they face in their overall fund raising.

KQED, a public-broadcasting organization in San Francisco, has always had better luck retaining donors who make their first contribution in response to a direct-mail appeal — roughly 50 percent make a second gift — than donors who make their first donation as part of an on-air pledge drive. About one in four new donors who pledge to an on-air drive makes a second gift.

But the high cost of renting direct-mail lists has led the organization to realign its fund-raising strategies, says Marianne Fu-Petroni, executive director of membership.

KQED has cut back on the resources it spends on direct-mail campaigns and is now relying more heavily on on-air campaign donors than it would like, she says.

Ms. Fu-Petroni says that adding three e-mail messages into the mix of postal letters and telephone calls that encourage donors to give again has helped the organization keep steady the percentage of contributors making a second gift despite the tilt toward pledge donors. The e-mail renewal messages are on pace to net $150,000 in 2006.

Like many charities that hold walkathons, bike rides, and other events where participants solicit contributions from friends and family members, the National Multiple Sclerosis Society, in New York, has seen an increasing portion of that money come in through the Internet.

Of the $112.6-million the organization raised through events in 2005, $14-million came in online.

The downside to these events is that they tend to be "a very transactional type of fund raising" and adding the online element only reduces the amount of contact between participants and their sponsors, says Pam Swenk, vice president for development at the charity.

But the online pledge system, she says, has the potential to be an important tool as local chapters seek to build stronger ties with top event participants: "When you have a system that tells you that somebody has raised $36,000 and you can see that in 30 seconds, it becomes real easy to pick up a phone and say, 'My gosh, Bill, you're doing such a great job. We really appreciate it. What's motivating you this year?' and make it more of a relationship."

Increasing Small Gifts

Over the past decade, the 155 Jewish federations that make up United Jewish Communities have placed greater and greater emphasis on gifts of $1,000 or more. As a result, the network has seen some erosion in the number of donors who make small gifts.

"We have definitely moved in the direction of what our head of campaigns calls 'squeezing the lemon,'" says Joli Golden, a senior director at United Jewish Communities, in New York. "So we've been getting more out of our higher-end donors, but haven't been as focused on the lower end of the campaign."

The organization is looking to the Internet to help it increase the number of small gifts — an approach the organization believes is borne out by its analysis of Internet donors. United Jewish Communities was surprised to learn that, of the more than 5,000 online donors last year for whom it had obtained a giving history, more than a quarter were new donors and more than 32 percent were people who had given in the past, but sat out the previous campaign.

In 2005, several federations — such as UJA Federation of New York, which raised $758,790 in December alone — had successful year-end e-mail campaigns. To help other federations copy that success, United Jewish Communities is developing a sample e-mail campaign that federations can use this year. The look and message of the online appeals will echo the direct-mail pieces the nonprofit organization is creating for Hanukkah.

A few charities are taking tentative steps to test newer technologies — such as text messaging and online audio broadcasts, often called "podcasts" — and their ability to attract new supporters.

This summer, World Vision, an international development organization in Federal Way, Wash., plans to conduct a fund-raising campaign that will allow cell-phone users to make contributions.

By sending a text message to a specified number, a donor can make a small gift, which will appear on their next phone bill.

World Vision also allows visitors to sign up for news updates that will be sent automatically to their RSS — or "Real Simple Syndication" — software, eliminating the need for subscribers to keep coming back to the Web site to get the newest information. Each month, the charity's RSS news feeds and audio broadcasts are viewed more than 90,000 times.

Nature Stories, a weekly podcast the Nature Conservancy, in Arlington, Va., started in February, has covered such varied topics as the private lives of wolves, edible plants growing in New York City parks, and the march of salamanders across Henry Street each spring in Amherst, Mass. So far, the broadcasts have been downloaded more than 30,000 times.

While the organization does not solicit those people, Jonathon D. Colman, the organization's senior manager for digital marketing, sees connections to fund raising.

"We constantly need to be reaching out to new audiences," he says. "The more people we can attract to our Web site, the more fund-raising activity will occur."

While the whiz-bang features of new technologies are exciting, Hilery Livengood, director of Web strategies at the University of Iowa, in Iowa City, urges charities not to neglect the basics — like making sure that their home page prominently features a link to an online-donations section, that direct-mail appeals and telephone solicitations remind donors they can give online, and that the Web site describes how gifts are used.

Small steps, when added up, can lead to a big payoff, says Ms. Livengood. "It's the drips. It's not a huge bucket of water that's being poured over anyone at any point in time."

Noelle Barton, Candie Jones, and Nicole Lewis contributed to this article.

INTERNET GIVING: HOW MUCH CHARITIES HAVE RAISED IN THE PAST FIVE YEARS
	2001	2002	2003	2004	2005	Percentage change from 2001-05
National Multiple Sclerosis Society (New York)	$233,400	$2,500,000	$10,000,000	$16,500,000	$26,200,000	11,125.4%
Pennsylvania State University (University Park)	92,182	142,010	222,642	6,799,945	7,253,373	7,768.5
University of Cincinnati	1,575	7,771	33,318	48,732	65,632	4,067.1
American National Red Cross (Washington) 1	3,860,000	65,940,736	1,889,058	3,319,668	157,700,000	3,985.5
University of Texas at Austin	6,554	25,146	43,652	164,973	222,630	3,296.9
International Rescue Committee (New York)	62,640	239,957	239,247	300,000	1,958,000	3,025.8
Catholic Relief Services (Baltimore) 1 , 2	593,356	635,609	762,534	879,466	15,261,321	2,472.0
Easter Seals (Chicago)	19,000	28,997	183,780	334,320	461,947	2,331.3
University of Iowa (Iowa City)	63,124	178,601	337,413	549,918	1,401,072	2,119.6
World Vision (Federal Way, Wash.)	1,758,000	2,879,327	5,700,000	8,500,000	37,100,000	2,010.4
Childrens Hunger Fund (Mission Hills, Calif.) 3.	18,008	11,080	71,425	181,303	358,043	1,888.2
United Jewish Appeal-Federation of Jewish Philanthropies of New York	65,646	207,902	241,824	410,335	1,090,510	1,561.2
Ohio State University (Columbus)	25,485	105,701	141,307	245,201	375,466	1,373.3
CARE (Atlanta)1	955,182	603,350	750,000	841,000	13,491,000	1,312.4
American Heart Association (Dallas)	1,100,000	1,060,863	5,807,700	9,850,133	14,552,245	1,222.9
University of California at Berkeley	144,777	264,498	443,517	643,609	1,706,795	1,078.9
University of Georgia (Athens)	16,632	219,973	169,219	114,044	168,602	913.7
Alzheimers Association (Chicago)	168,322	396,031	759,898	1,097,015	1,666,212	889.9
Emory University (Atlanta)	26,725	41,148	43,731	122,390	259,409	870.7
Cystic Fibrosis Foundation (Bethesda, Md.)	193,000	190,000	306,000	736,704	1,760,888	812.4
University of Wisconsin at Madison 4.	47,635	85,091	154,016	276,571	384,749	707.7
Vanderbilt University (Nashville)	40,209	90,704	180,709	240,824	314,568	682.3
Combined Jewish Philanthropies of Greater Boston	37,008	21,451	56,727	106,480	269,291	627.7
University of Pittsburgh	19,885	18,995	73,624	53,070	141,545	611.8
Childrens Hospital Foundation and Guild Association (Seattle)	8,000	16,500	26,047	39,188	49,587	519.8
Trinity Christian Center of Santa Ana (Trinity Broadcasting Network) (Calif.) 5.	625,000	1,174,534	1,948,638	2,208,346	3,203,946	412.6
Memorial Sloan-Kettering Cancer Center (New York)	107,680	180,867	382,418	404,998	549,404	410.2
Massachusetts Institute of Technology (Cambridge)	173,641	339,967	499,694	800,387	851,607	390.4
Trust for Public Land (San Francisco) 6.	37,341	75,463	123,496	187,119	182,066	387.6
Christian Children's Fund (Richmond, Va.) 7.	817,711	980,149	1,085,850	1,627,967	3,794,739	364.1
Boys & Girls Clubs of America (Atlanta)5, 8.	30,207	39,110	50,299	78,625	116,633	286.1
Washington University in St. Louis	46,797	1,304,780	87,743	103,624	176,662	277.5
Marine Toys for Tots Foundation (Quantico, Va.)	251,400	313,538	392,431	423,924	706,736	181.1
American Lung Association (New York)	256,000	345,000	437,500	548,943	701,241	173.9
University of Colorado (Boulder)	60,513	54,932	26,888	80,812	150,650	149.0
Metropolitan Museum of Art (New York)	376,190	593,379	679,076	759,258	903,056	140.1
Campus Crusade for Christ International (Orlando, Fla.) 1.	3,500,000	2,500,000	4,500,000	6,700,000	8,100,000	131.4
Jewish Federation/Jewish United Fund of Metropolitan Chicago	501,223	605,598	882,418	1,040,830	1,145,523	128.5
Prison Fellowship (Lansdowne, Va.)	608,530	602,836	771,363	921,302	1,170,994	92.4
United Way of Metropolitan Atlanta	6,807,782	10,000,000	11,017,712	4,533,422	6,492,689	- 4.9
1. Figures for 2005 include donations earmarked to provide relief after the tsunamis in South Asia. 2. Figures include some money raised by Catholic Charities USA in 2005. 3. Figures include donations earmarked to provide relief after the 2004 tsunamis in South Asia and donations earmarked for relief after Hurricane Katrina. 4. Figures are for the University of Wisconsin Foundation only, whose fiscal year ends December 31. 5. Figures for 2004 include donations earmarked to provide relief after the tsunamis in South Asia. 6. Figures are for the fiscal years ending March 31, 2002, 2003, 2004, 2005, and 2006. 7. Figures do not include monthly payments from donors who agreed to sponsor a needy child in previous fiscal years. 8. Figures are for the national office only.

HURRICANE KATRINA DONATIONS: HOW MUCH WAS RAISED ONLINE
	Amount raised for Katrina relief	Amount raised online	Percentage raised online
Humane Society of the United States (Washington)	$34,000,000	$18,289,000	53.8%
Mercy Corps (Portland, Ore.)	10,155,728	4,619,865	45.5
Oxfam America (Boston)*	3,074,000	900,000	29.3
World Vision (Federal Way, Wash.)*	11,900,000	3,400,000	28.6
AmeriCares Foundation (Stamford, Conn.)	13,000,000	3,335,440	25.7
American Friends Service Committee (Philadelphia)	2,374,623	592,997	25.0
American National Red Cross (Washington)	2,145,000,000	479,000,000	22.3
Habitat for Humanity International (Americus, Ga.)*	91,058,408	19,617,382	21.5
United States Fund for Unicef (New York)	3,900,000	820,000	21.0
United Way of America (Alexandria, Va.)*	26,000,000	4,478,609	17.2
America's Second Harvest (Chicago)	28,921,071	4,758,590	16.5
Jewish Federation/Jewish United Fund of Metropolitan Chicago	2,106,809	330,426	15.7
Planned Parenthood Federation of America (New York)	1,622,000	228,000	14.1
Brother's Brother Foundation (Pittsburgh)	824,431	103,632	12.6
Campus Crusade for Christ International (Orlando, Fla.)	3,500,000	400,000	11.4
Salvation Army (Alexandria, Va.)	363,000,000	40,000,000	11.0
Direct Relief International (Santa Barbara, Calif.)	4,761,365	510,584	10.7
Save the Children (Westport, Conn.)	7,676,308	678,276	8.8
Catholic Charities USA (Alexandria, Va.)	145,528,453	10,159,382	7.0
Christian and Missionary Alliance (Colorado Springs)	2,015,063	138,039	6.9
Evangelical Lutheran Church in America (St. Peter, Minn.)	27,400,000	1,800,000	6.6
United Methodist Committee on Relief (New York)*	64,000,000	3,000,000	4.7
International Rescue Committee (New York)	2,324,604	100,842	4.3
Baton Rouge Area Foundation (La.)*	41,500,000	1,200,000	2.9
Note: This table includes groups that raised $100,000 or more online for Katrina relief. Figures show cash raised to date. * Figures include money raised for the relief efforts after Hurricane Katrina and Hurricane Rita.

DONATIONS FOR TSUNAMI RELIEF: HOW MUCH WAS RAISED ONLINE
	Amount raised for tsunami relief	Amount raised online	Percentage raised online
Compassion International (Colorado Springs)	$1,875,484	$1,192,676	63.6%
Catholic Charities USA (Alexandria, Va.)	401,470	193,548	48.2
Oxfam America (Boston)	29,300,000	13,000,000	44.4
Mercy Corps (Portland, Ore.)	31,951,975	11,535,694	36.1
Humane Society of the United States (Washington)	980,000	316,000	32.2
American Friends Service Committee (Philadelphia)	5,500,000	1,607,142	29.2
World Vision (Federal Way, Wash.)	63,300,000	18,200,000	28.8
AmeriCares Foundation (Stanford, Conn.)	45,000,000	12,910,000	28.7
United States Fund for Unicef (New York)	133,000,000	35,000,000	26.3
American National Red Cross (Washington)	574,000,000	140,000,000	24.4
Salvation Army (Alexandria, Va.)	24,783,825	5,500,000	22.2
Campus Crusade for Christ International (Orlando, Fla.)	3,800,000	800,000	21.1
Direct Relief International (Santa Barbara, Calif.)	14,379,452	2,600,534	18.1
Jewish Federation/Jewish United Fund of Metropolitan Chicago	663,061	116,599	17.6
CARE (Atlanta)	61,000,000	10,000,000	16.4
Save the Children (Westport, Conn.)	92,797,871	11,945,517	12.9
Catholic Relief Services (Baltimore)*	165,800,000	13,397,609	8.1
Christian and Missionary Alliance (Colorado Springs)	1,711,025	121,797	7.1
Habitat for Humanity International (Americus, Ga.)	54,512,896	3,532,908	6.5
United Way of America (Alexandria, Va.)	7,500,000	401,000	5.3
Evangelical Lutheran Church in America (St. Peter, Minn.)	11,400,000	600,000	5.3
International Rescue Committee (New York)	15,939,675	819,147	5.1
United Methodist Committee on Relief (New York)	42,300,000	2,000,000	4.7
Brother's Brother Foundation (Pittsburgh)	1,866,834	81,615	4.4
Rotary Foundation of Rotary International (Evanston, Ill.)	5,116,948	58,500	1.1
Note: This table includes groups that raised $50,000 or more online for tsunami relief. Figures show cash raised to date. * Total tsunami donations includes money raised by Catholic Charities USA.

Copyright © 2006 The Chronicle of Philanthropy