Fund-Raising With A Net - The Internet
by Tony Poderis of http://www.raise-funds.com/

The excitement surrounding Internet fund-raising and its hoped-for windfall of support for non-profits reminds me of when direct mail and telefunding were new to the fund-raising scene. However, Internet fund-raising is causing an even greater stir in the non-profit world for a couple of reasons.
A listing on a host fund-raising website costs a tiny fraction of the expense to mail appeals or telephone prospective donors.

The Internet’s all-encompassing penetration is an almost irresistible lure. What non-profit wouldn't like to enlarge its base of potential donors to national or even global proportions?
The promise of new and increased fund-raising opportunities through the Internet is being made by many organizations and touted by numerous individuals. These early adopters see a cyberspace frontier that non-profits must explore. I agree, but it is an exploration best undertaken with a healthy degree of caution.

Not every breakthrough, to which those first to adopt new technology rush, proves to be a winner. And even if the underlying concept is sound, its first implementation might not be the way to go. Remember Betamax and eight-track? When it comes to fund-raising, the Internet has yet to prove that it can deliver substantial rewards to the many types and sizes of non-profit organizations that makeup the philanthropic world. While online fund-raising may work for some, it just might not be the ticket for all.

A crisis-driven Internet appeal can net significant amounts of money following a hurricane, flood, earthquake, or other disaster. The response in the wake of the terrorist attacks of September 11 is proof of that. However, an enormous number of non-profit organizations and agencies throughout the world have no such crisis factor working for them. Nor are they wrapped in an emotional appeal that will cause strangers to give them money.

Deciding Which Forms Of Solicitation To Use

The Internet offers new ways to communicate with donors and solicit gifts. However, while adding to a fund-raiser’s list of techniques, it does not replace any of them. Through experience we have learned that some forms of appeal work better than others. We know that one-on-one solicitations made to individuals in their home or office by peers at scheduled appointments work best.

Such solicitations yield the highest percentage of commitment and the largest gifts. Other proven methods of solicitation include direct mail, telefunding, and door-to-door. Now, we have Internet solicitation to add to the mix. The question is how will that addition be made?

The number of websites offering to solicit, receive, and process contributions for non-profit organizations seems to be in constant change. Some of the first to appear have already closed shop, while others will have come online between the time I write this and you read it. In addition, many website developers are urging non-profits to build their own websites for the primary purpose of raising money.

Websites and fund-raising are a hot topic on the Internet and much information can be found there. A recent query for the word fund-raising using the search engine Google yielded more than 1.25 million hits. When I narrowed the search to sites also featuring the words non-profit and website, I still had more than 25,000 returns. It is no surprise that a wide variety of companies offer services to aid non-profits in using the Internet for fund-raising. The usual services offered are either to list an organization for potential donors to find, or to develop a non-profit’s own fund-raising website.

Websites That List Or Display Non-Profit Organizations

The idea behind these websites is that a “philanthropic portal” will attract visitors who will select charities to which to contribute. The gifts are sometimes even processed through these portal sites which make money by charging a fee and/or selling space to advertisers.

Non-profits affiliate with philanthropic portals to raise money and create awareness. Because the cost is low, they see such opportunities as a way to achieve a global potential at little expense. However, a non-profit organization listed on a philanthropic portal website should recognize that:
It will be competing with many other organizations for prospective donors.

Success will be based on the portal site’s ability to attract visitors willing and able to make gifts of meaningful size. The number of donors who surf the Internet looking for places to give money is at best unknown, and to my thinking questionable.

Most likely, an initial Internet gift will be far harder to renew than one obtained in a more traditional way.

Meaningfully increasing an Internet gift presents a formidable challenge. It is very hard to build the type of relationship needed to turn a casual donor into a true stakeholder without a program of communication and involvement.

Relying on the Internet could tempt the organization to neglect tried and true fund-raising methods and practices.

Philanthropic portals are often unclear in explaining how their system works. Fee structures and contract clauses can be confusing. You may not know in total what your affiliation is costing until you get the bill.

The practice has legal implications in many states where philanthropic portals may possibly be designated as “professional fund-raisers.”
Non-Profit Organizations Operating Their Own Fund-Raising Websites

Many non-profits with websites primarily devoted to marketing and networking are seeking to increase the fund-raising potential of these sites. Still others are considering the development of websites devoted principally to fund-raising. Either way, a non-profit organization can use its own website to:
Enhance or augment traditional fund-raising programs.

Assure it maintains complete control of its Internet fund-raising.

Communicate with more people, faster, at a minimal cost.

Promote a sense of the organization as progressive.

Create communication that is more cost efficient once a working relationship has been established with donors and prospects.

Post information and alerts immediately.
However, a non-profit organization should be aware that if the principal reason for developing a website is fund-raising, chances are new money raised that can be attributed directly to the site will not justify the considerable time, money, and expertise expended to create the website. Not to mention, the ongoing expense of maintaining the site and keeping it loaded with fresh information. Nothing is staler than a website that isn’t updated on a frequent and regular basis, and a stale website is not an effective fund-raising tool. In fact, it is likely to have a negative effect on fund-raising.

A website which just sits out there with “brochure-ware” for visitors to read is impersonal. A great website that lets donors and prospects interact with staff can do much good, but that interaction is limited. And it can discourage donors from developing independent relationships with peer board members and other volunteers --- the very people best positioned, professionally and socially, to ask for substantial gifts.

The danger here is that staff will become the primary contacts and by default the primary solicitors. If that happens, the challenge to obtaining initial major gifts and substantially increasing renewed gifts will become even more formidable. Another danger is that staff will hide behind technology. The last thing you need is for staff to be glued to a keyboard and screen, rather than interacting with volunteer leadership, donors, and other stakeholders.

Beware “The Sirens’ Song”

I believe that most of the philanthropic-portal providers and website developers who enthuse over fund-raising opportunities on the Internet are honorable and well intentioned. However, like true-believers everywhere, they have a tendency to overstate their case, and some of those statements have given me an uneasy moment or two. Remember, they are selling something in which they really believe. So, we shouldn’t be surprised by the puffery they sometimes employ in their pitches. However, as they sing their sirens’ song of easy money, the majority of them, having little or no experience in the non-profit world, fail to realize just how desperate many organizations are for cash. As a result, non-profits could be led skipping down a path they should venture upon with great care or not at all.

One philanthropic-portal provider says he is working to make the electronic giving process on his site “familiar and comfortable.” But does he acknowledge a most important aspect of fund-raising?

Prospective donors don’t give money until they are “familiar and comfortable” with the organization and its cause. This provider might succeed in making the transaction process easy, but he should also counsel that attracting distant benefactors who have little or no relationship with an organization is in itself no easy thing.

The credentials of some philanthropic-portal providers and website developers suggest they have little or no fund-raising experience. Thus, their claim that they advise non-profits not to abandon traditional methods raises the question, How then can they make recommendations about fund-raising techniques? In any other circumstance, would we accept fund-raising advice from individuals or organizations with little or no development experience?

Some philanthropic-portal providers and website developers encourage non-profits to experiment and dare them to be entrepreneurial. That’s acceptable with one’s own money or with funds from a venture capitalist. But a non-profit is obligated to spend donor contributions wisely and to use them first and foremost to carry out its core mission. As stewards of other people’s contributions, those who manage non-profits must resist the temptation to experiment at the expense of mission. They must not allow the influence of these experts of the new technology to unduly drive an organization’s development plans. The negative risk is twofold:
The money spent on experimentation may not bring back a return that justifies it.

The effort and resources expended on achieving that low yield will have been taken away from proven fund-raising processes.
Before you take the time, make the effort, and spend the money to go “global” for support, you should maximize your fund-raising potential in your own service community. It’s where your organization delivers its programs and services. It’s where your organization is best known. It’s where the greatest number of people likely to care about your organization can be found. It’s where you will raise the vast majority of your money. It’s where you should concentrate your fund-raising efforts.

Non-profits are being told that more and more people with means are purchasing commercial products of ever-increasing value through the Internet. Some philanthropic-portal providers and website developers are coupling such commercial purchasing practices with the making of charitable contributions. They say that people will be just as likely to make donations over the Internet, as they are to purchase a computer or any other product. What they fail to recognize is that while we are inclined to buy from the place that gives us the most for our dollar, we make donations to the place that addresses the things we care most about.

A non-profit organization needs to understand that few, if any, prospective donors will give it money if they live outside its service area. While it is possible for a distant benefactor who knows little or nothing about an organization to give support, don’t count on it. Such an occurrence is truly the exception to the rule, and a rare one at that.

The Best Way To Ask For The Money

Most fund-raising programs for non-profit organizations should be based on the Optimum Gift Principle (the most money from the fewest donors in the shortest time). That’s hard to do through Internet fund-raising, direct mail, or telefunding efforts. I write fund-raising articles and give fund-raising counsel based on what works. Over the years, I have learned that fund-raising in person is by far the best way to ask for money. It really is the only way to consistently obtain large gifts.

Non-profit organizations whose support constituencies are geographically distant might have no choice but to rely on long distance fund-raising, even when it comes to asking for major gifts. But except for organizations that are truly national or international in scope, operations are far more likely to be concentrated in a local community. And that’s where they should look for the lion’s share of their support.

These organizations, especially when they are seeking major gifts, should adhere to the traditional fund-raising principle of looking someone in the eye when asking for money. There is no substitute for it. Every other form of fund-raising pales in comparison.

Some non-profit organizations have begun to let slide opportunities for personal contact with key supporters as they have become enamored with the Internet and what they hope is its ability to cultivate and solicit major donors. This results in fewer face-to-face opportunities for contact and communication and a diminished awareness and sensitivity on the part of staff and volunteer leadership to donor needs.

This loss of personal contact has the potential -- I would even say the probability -- for disaster. Experience has taught me that you can’t get someone to part with many thousands or tens of thousands of their dollars without personal contact. Large gifts still come down to one human being asking another.

Experience and judgment are our most valuable “sales tools” when it comes to winning support for our worthy organizations, and these tools are at their best when we have the ability to “read” the person we are soliciting. That can’t be done when you are asking for gifts on a website. There is no way to see through the opacity created by the Internet. You can’t “read” a person who is sitting in front of his or her computer. You aren’t there to see the body language. When there is no dialogue, there are no inflections of voice to give subtle hints. The computer masks all the small personal ways in which we communicate and express our intent, our fears, our dislikes, our confidence, and our interest.

And bear in mind that it is considerably easier to click a website closed than it is to say “no” in a meeting, shut the door on a neighborhood solicitor, or even cut short a telephone solicitation. Those all require that you turn away from a person, not a machine.

Putting Clients’ Needs First

Philanthropic-website hosts, site developers, and online fund-raising counsel must work with their client organizations to determine when Internet fund-raising efforts work and when they do not. They must be ready to tell an organization that online fund-raising is not for everyone. The question is whether or not Internet fund-raising efforts are:
Maximizing an organization’s funding potential.

Cost effective.

Distracting an organization’s leadership from other more reliable and proven fund-raising methods.
Internet fund-raising should be rated and evaluated by the providers of its services in partnership with their non-profit clients in the same way that other fund-raising methods should be assessed and prioritized. The good judgment and the integrity of fund-raising site developers should be used to value and position Internet fund-raising for each individual client according to that client’s overall fund-raising plans and needs.

If they do these things, their clients will have the best shot at success, and that in turn will make them successful. Reputable fund-raising advisors always put clients’ needs first, especially long-term needs.

Those are my views on the subject. What are yours? I welcome your comments and suggestions.
Tony@raise-funds.com

by Tony Poderis of http://www.raise-funds.com/ Tony@raise-funds.com

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