November, 2010

Back in the days when everyone had a king, the transition from one king to another was often a generational event. The king would grow old and die, as people tend to do, and a new king would take his place. Even though the name changed, the monarchy lived on. People would cry “The King is dead… Long live the King!”

This seems a fairly apt metaphor for the transition we appear to face in the modern media world.

A generation ago direct response fundraising was fairly simple. Copy was written. Mail was mailed. Shows were aired. Response was tallied and tactics adjusted to favor the strongest creative approach.

In the early-1980’s the sledgehammer of cable TV struck a broadside at the big three networks, fragmenting the media marketplace into hundreds of glittering new channels. Around the same time techies at Stanford and UCLA transmitted the first message between separate computers and dubbed their creation e-mail. A cool brainiac named Tim Berners-Lee developed the platform that would soon become the Internet.

The last time access to information and knowledge changed like this, Gutenberg was cutting type. Media would never be the same, and with it direct response fundraising.

But just because everything is new doesn't mean anything is different.

How much has the new media landscape actually altered patterns of response? Campbell Rinker conducted an online poll in April 2010 that brings generational patterns of media interaction into clearer focus. Even considering the bias due to conducting the poll online, the results were somewhat of a surprise. Certainly, the poll shows strong and ongoing interest in consuming information through the Internet, e-mail, social networking, texting, tweeting, and the like. But it also underscores the similarities between generations in terms of how they prefer to respond with a gift to the channels they prefer. While a wider variety of channels exist now for communicating with donors than ever before, some of the time-tested response methods remain surprisingly intact. In short, donors’ gravitation toward giving in response to new media seems closer to a melting glacier than a spring flood.

Let’s look at the results step by step. First, let’s dispel the notion that this sample differs radically from “normal” donors in terms of their Internet usage. Even though all the poll respondents are Internet users, they do not represent the online 24/7 crowd. Furthermore, other phone polls Campbell Rinker has done show over 90% of donors nationwide have personal access to the Internet, exceeding national averages. Younger audiences are more apt to embrace a portable Internet – to them the notion of a deskbound Internet is antique, even Juriassic. Along the continuum of “new media” options, using an online poll to measure interaction with all sorts of media makes sense, because it affords an equal opportunity to gather feedback from the early adopters among the older generation as well as the laggards among the younger users.

The Campbell Rinker poll included 398 donors in three generational groups – under age 40, age 40-60, and age 60+. Now, while these groups don’t follow any typical generational segments like baby-boomers and busters, they do represent fairly distinct categories in terms of relating to new media. All have had 20 years to adapt to and embrace electronic media (or not). The youngest, born after 1970, are the digital children. They came of age along with the Internet, the cell phone, the personal computer, and a 400-channel cable universe. The middle group, age 40-60, can remember a workplace without a computer and life without cell phones. They’ve had to gradually adapt to using new media after growing up without them. The oldest group were at least teenagers when the Beatles invaded the U.S. and were old enough to remember the first dog being launched into space.

The groups certainly have contrasting giving patterns. The youngest group gives an average of $1,395 annually, while those between 40 and 60 give $2,415 on average and the 60+ respondents report giving $3,260 annually (including gifts to places of worship). The youngest generation characterizes giving as a luxury by a three to two margin (49% vs. 33% for older generations), and fewer than half as many in this group cite giving as a necessity like rent and utilities compared to older Americans (7% vs. 19%). While no comparative data exist from 20 years ago, it looks like America is facing a real shift in how its donors perceive giving.

Due to the sampling method, Campbell Rinker expected the respondents to use the Internet and e-mail frequently – among younger respondents, these media are used more frequently than television. Yet the under-40 crowd listens to radio more often than the oldest group (probably due to less drive time among retired respondents). Only 65% of the under-40 crowd uses postal mail more than once a week (how do they get away with that?), and just over a third interact with newspapers and magazines more often than once a week, at half or less the rate of preceding generations.

What do they do when they’re online? Not surprisingly, searching for information and simple browsing or exploring were the most prevalent activities among all three generations. Three quarters of the youngest generation participate in social media – four times more often than age 60+ donors who participate, and half again more than their 40-60 year old counterparts. About half of younger donors shop online, which is twice as many compared to earlier generations.

These results mean that nonprofits attempting to reach their younger audiences using only traditional media will miss nearly half their opportunities to connect. Obviously, if younger audiences are your niche, it is essential to reach them using their media of choice. In this case, it means broadcasting the same message through myriad electronic portals, where it can be accessed on a dizzying array of devices. The strategy taken by most faith-based organizations that try to reach the younger set is to engage this audience as viral accomplices who might also engage their friends.

As this media matures, it is apparent that the engagement strategies will take some work to refine. Two months ago the American Red Cross raised tens of millions of dollars for Haitian relief with a successful texting campaign. An April 20 story on National Public Radio details the experience of one nonprofit attempting to secure $50,000 from Pepsi for being voted into one of the top ten spots on a social media network. After reminding their fans to vote dozens of times daily for a month to stay in the race, Northern Virginia Family Services failed to secure the necessary votes minutes before the deadline and lost out. Thousands of fans now recognize NVFS as the charity that pestered them for no real reason.

FamilyLife, a ministry based in Little Rock, Arkansas, allows visitors to its web pages to post content from its site to any of 271 different channels, from Adifni to ZooLoo, where they can combine, share, and propagate content among their friends and contact lists.

Nonprofits have reacted to the advent of new media channels with cautious optimism, intrigued by how social media can let them take their message directly to an audience of potential advocates. At some point, nonprofits will begin to ask themselves whether the new media storm is worth enough to manage and maintain.

The answer lies in the response to two questions: “Do younger donors even want nonprofits to ask for funds on the media they consume,” and “How do donors of differing generations prefer to give?”

The answer to the first question is “Yes.” The under-40 set is more likely to prefer receiving charity asks by e-mail, on a website, and through social media compared to older donors. They also prefer to be asked during an event more than older donors. However, the share of under-40 donors who like to hear about a charity on its social network page is relatively low compared to other media (17% vs. 43% for e-mail and 53% for mail, for instance).

Interestingly, donors age 40-60 preferred to hear a charity ask for donations on broadcast media at twice the rate cited by older and younger donors (20% for age 40-60 vs. 12% for older and younger ages combined).

Another interesting fact is that 40-60 year old donors and donors under 40 have preferences similar to each other, and clearly different from the oldest generation. All donors under 60 are simply more open to hearing nonprofits ask for support through e-mail, on charity websites, on non-exclusive charity sites, and on social network pages. In contrast, older donors are less inclined to prefer these channels and are more open to getting requests by mail, in-person, and by phone.

But preferences are one thing, behavior is another. Do different generations actually respond through the media by which they hear a charity ask? According to Target Analytics, Internet giving doubled from 4% of all individual giving in 2005 to 9% in 2009. In the Campbell Rinker poll, the overall rate of website giving was 12%, slightly higher than the Target figures. (This likely reflects the fact that the faith-based organizations participating in the Target panel are larger national faith-based organizations that rely mostly on direct mail).

Distinct differences in giving channel usage show up among different generations: Younger donors reported giving 18% of their gifts through a charity website, compared to 10% of all gifts given by donors age 40-60 and seven percent of gifts given by donors age 60+.

Putting this preference into perspective, even younger donors (who have the the highest perferences for using new media to give) are more likely to give in person or by mail than they are to give on a charity’s website. They are 13 times more likely to give by mail than they are by texting, and 28 times more likely to give by mail than they are by social networking pages. The ratios are most lopsided among donors age 60+: 289:1 for gifts by mail over gifts by social networking pages and 115:1 for gifts by mail over gifts by texting.

Among every generational group, giving by mail and in-person (presumably giving in a place of worship) still eclipses giving through a website. Despite the fact that texting to give and giving on charity social network pages happens at least twice as often among the younger generation than it does among older donors, these channels are by far the least-used methods of giving among any group, regardless of age. To put this in context, if we combine the giving activity reported in this survey by 100 donors from each age category, 15 out of the 3,220 gifts given by the 300 donors in a year would come through a charity’s social network site and 25 would be given by texting. About 365 would come through charity websites, and nearly 1,200 would be given by mail. But even this comparison significantly overstates the income attributable to new media giving, because younger donors give just half as much as older donors, they do so less frequently, and there are fewer of them who give at all.

Donors give using methods they see as providing benefits. Back when nonprofits first added toll-free phone numbers to their radio and television programs in the 1970’s, donors embraced it as a direct, efficient, and immediate conduit for satisfying their desire to respond. So, there must be benefits to giving with new media, right? In its poll, Campbell Rinker asked respondents what benefits they saw from a charity offering electronic giving.

By far, the most compelling benefit cited by each generation is “reduced mailing costs.” More than 8 in 10 younger donors, three in four donors age 40-60 and two in three donors age 60+ see electronic media as cutting out mailing costs. Younger and middle-age donors agree for the most part that nonprofits can reach more people and donations arrive faster using these methods. The oldest generation is most likely to say that alternative media offer no benefits at all (19%), a viewpoint held by one in 50 younger donors. It remains to be seen whether the benefit of reduced mailing costs is sufficient to drive the desire to use these new media for giving. Nonprofits might consider testing a print gift ask that assures the donor that more of their funds will reach their intended goal if they give their gift online.

All these responses beg the question: Why don’t donors like these – people who are online more often than they watch TV and members of an online research panel – actually give online more frequently? We separated out the donors who had never given online and asked them about this. Interestingly, the highest proportion of these donors say they have no objections to the process, they just haven’t done so yet. This is especially true for younger donors, suggesting that there are other, more subtle barriers to online giving.

What could these barriers be? More than a third of each age group says that using credit or debit cards for giving is a barrier for them and they’d rather not give online for that reason. More than 20% of donors in all three generation groups say they have not yet given online out of general concerns about online security and privacy, and one in ten have concerns about the safety and security of charity websites, specifically. A small group says they just don’t want to deal with the hassle of giving online.

What does the future hold? Based on the proportion of donors who say they want to continue giving as they do now through new media (39% overall), not give using new media (34%) and give more often this way (25%), it looks like the current 12% share of giving that is now conducted online will probably rise. The rate of that rise is subject to intense speculation. Barring significant changes in technology or access, and based on these data for current rates of experimentation and abandonment, we expect the share of new media gifts to increase by 1-2% per-year during the next decade to as much as 20-25% of all individual giving.

Over time, younger donors will age and take the place of the older donors in the universe, and these donors will be more open to giving online, using social networks to give, and adding their gifts to their phone bill through texting. Younger donors will also be more willing to try new channels for giving that haven’t been invented yet.

What lessons must nonprofits take away from this study?

Survey Methodology

A total of 398 known donors were surveyed online from April 21-26, 2010. A sample of of approximately 2,000 known donors were invited, delivering a cooperation rate of about 20%. Quotas were established for at least 100 respondents under the age of 40, between the ages of 40 and 50, and age 60+. The overall sample delivers a margin of error of ±4.9%. The research was sponsored and conducted by Campbell Rinker.

About the Author

Dirk Rinker leads Campbell Rinker, a marketing research firm that specializes in donor, member, and alumni research services for the nonprofit world. Located in Valencia, CA, the firm has served nonprofits large and small since 1991. Visit them at www.CampbellRinker.com.

 

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