As we begin 2005, it is natural to reflect and look at the year that is past and gather information that will help us overcome the inevitable fundraising challenges that the New Year will bring.

I have attended numerous trade shows, seminars and presentations this year and have listened to many questions regarding online donations that are often raised at these events, one of which is: Do online donations have a “higher dollar value” than traditional gifts? This is one question that I decided to investigate.

As a credit card processor to nonprofit organizations throughout the US, Canada, Europe and Asia Pacific we are privileged to process transactions for thousands of nonprofits.  We are also in a somewhat unique position as we see and process donations from multiple sources: online donations, recurring (monthly gifts), one time gifts and events. This gives us the ability to track where donations are coming from and how much these gifts are for, valuable information and extremely interesting when analyzing the success of a fundraising campaign.

So we ran some numbers and took 1000 nonprofits in the US and Canada and analyzed the transactions processed in 2004 through the IATS system. We defined an offline transaction as one that was processed through one time gifts, recurring gifts etc while online transactions included those coming from a “donate now” function, online events and registrations.

We found that in the United States a typical offline transaction averaged at US$89.25 while and online transaction averaged at US$116.65. In Canada the difference was less dramatic with offline transactions averaging out at CDN$58.56 and online transactions at CDN$64.34 although the Canadian donation portal Charity.ca had an average gift size of CDN$114.

The reason for the smaller offline gift sizes in Canada may be attributed to the success of recurring gift programs (where a donor commits to an open ended pledge to be taken out of their bank or credit card). These gifts tend to be smaller (the average size of a recurring gift in Canada is CDN$24 and in the UK12 Pounds Sterling) but the transaction volumes are significantly higher.

Further analysis of clients processing online and offline transactions through the IATS system showed that in almost every case, the average gift size for an online donation was higher than an offline one. In one specific case, a Ministry had an average offline gift size of US$56.67 while there online donations averaged at US$354.97!

So what does this tell us?

For one thing, it confirms to me the value of online donations and ePhilanthropy. We know that the cost of raising a dollar online is significantly lower than through more traditional methods such as direct mail. With these figures and with confirmation that online donations are indeed larger than offline ones, we  can see that online fundraising is not only an extremely effective and efficient way of raising money but also a more lucrative one.