There’s a wealth of data that indicates Americans are ready to give to charities online, if the charities are creative in how they solicit those funds.

The Census Bureau of the Department of Commerce announced that the estimate of U.S. retail e-commerce sales for the second quarter of 2004 was $15.7 billion, an increase of 23.1 percent from the second quarter of 2003. Total retail sales for the same quarter of 2004 were estimated to have increased 7.8 percent from the same period a year ago.

E-commerce sales in the second quarter of 2004 accounted for 1.7 percent of total sales, while in the second quarter of 2003 e-commerce sales were 1.5 percent of total sales. In the first quarter of 2004, e-commerce sales were 1.9 percent of total sales.

A recent ClickZ article quotes a number of sources that indicate that online commerce, especially “micropayments” (those of less than $5) is booming.

A study of 1,112 Americans aged 12 and older, conducted by Peppercoin and Ipsos-Reid, found 17 percent of survey respondents saying they'd use a non-cash form of payment (credit, debit or charge card) for purchases under $5. That percentage, according to the pollster, equates to some 37 million Americans.

Much of this is for digital content. Songs lead the way, but phone ringers, games, video, sports content and a host of other information and entertainment also flourish. According to the Peppercoin survey, 14 million Americans made digital content purchases in the past year for less than $2. That’s more than three times the 2003 number.

An August 2003 TowerGroup report predicts micropayments via the internet and mobile phones at $2 Billion in 2003 and growing at a rate of 23% annually.

The implications to nonprofits are many:

• Don’t be afraid to ask for small gifts, especially from nondonors; 
• Don’t be afraid to charge for sending e-cards; 
• Find downloadable content to sell for small dollar amounts; 
• Test PayPal and other non-cash online banking intermediaries; 
• Don’t be afraid to go after the youth market, where much of the online micropayments market currently exists.
  

October 2004