Nonprofit Fundraising: Cultivating relationships and success online
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Abstract - Outline
Kelly (1998) defined fundraising as the cultivation of relationships. Online fundraising is currently the fastest-growing area of fundraising in the United States (The Future of Philanthropy, 2011). As nonprofit organizations move more fundraising efforts online, more opportunities for building relationships arise. By paying particular attention to the aspects of relationship building specific to the Internet, nonprofits have the opportunity to find new success. This will be demonstrated by closely examining such possibilities through the following facets of the Internet: the access it provides to a potential audience of millions, the capabilities found there for interactivity, new and different possibilities online for effective digital storytelling, its allowing supporters to carry momentum through collaboration on social networking sites (SNS) and elsewhere, and a newly transparent way of conducting public relations (PR). This examination can serve as a guide to nonprofits seeking success in online fundraising.
From the Red Cross and Habitat for Humanity to tfinalhe neighborhood soup pantry, nonprofit organizations are by their nature reliant on monetary gifts. With some 1.5 million such organizations registered with the United States IRS (Wing, Roeger, & Pollak, 2010), billions of donated dollars are needed for nonprofit work each year. In 2010, 73 percent of gifts came from individuals (Falk, Mesaros, & Rooney, 2011). Without individual generosity, nonprofit organizations would cease to exist.
For the last 10 years, the Internet has revolutionized nonprofit work and donor cultivation. The face of fundraising is rapidly changing. Seventy-five percent of organizations surveyed for the Nonprofit Research Collaborative’s annual study on giving reported incorporating online fundraising. The study also found that those nonprofits showed an increase rate of 58 percent in online donations from 2009 to 2010 (2011). Some nonprofits may choose not to focus on online fundraising as this and other studies continue to show that it makes up less than 10 percent of funding for most nonprofits (Nonprofit Research Collaborative, 2011). But with such a high increase rate, one estimate said it could grow to represent 40-50% of giving in just a few years (The Future of Philanthropy, 2011). Nonprofits must not fail to realize that as the fastest-growing area of giving, the online domain cannot be ignored. There’s no longer any room to deny the face of fundraising is changing.
A remarkable 90 percent of nonprofits have taken the first step in that recognition by creating a presence online. The Chronicle of Philanthropy reported that 9 in 10 nonprofits have accounts or fan pages on the social networking site (SNS) Facebook (Fine, 2011). Network for Good’s online giving study of the top 50 nonprofits in the nation found that 92 percent of those had links to a social network on their Web site (Network for Good, 2011). A common problem reported by nonprofits is lack of knowledge regarding the next steps after establishing an online presence, but these rates clearly demonstrate a desire to stay relevant (Andrei, Bernard, & Quinn, 2011) and a sense that staying relevant means moving online. Until 2001, less than half of all nonprofits on The Chronicle of Philanthropy’s top 400 charities list (the Philanthropy 400) even had online donation capabilities on their Web sites. By the time Waters examined the online actions of the Philanthropy 400 in 2007, the number had reached 95 percent (2007). Even more are likely to have joined in the past four years. The rapid growth in online presence suggests a shift in communication norms. The atmosphere is readier than ever for a more cohesive approach to online nonprofit activity.
Because online strategies, especially those that include social media, are so young and rapidly changing, research in this area is still developing. Much of the available knowledge comes from experimentation and observation, rather than from methods tested and proved successful. But applicable research still exists. Because 90 percent or so of fundraising is still done offline (Nonprofit Research Collaborative, 2011), many approaches employed by nonprofits are the same that have been used for decades. These strategies have not lost their value. Many nonprofits now use e-mail and e-newsletters in place of or in addition to direct mail and printed newsletters. The goals and content are largely the same, but studies are beginning to show how the content can be tweaked to be more successful online (Hart, 2002). So it is valuable for nonprofits to ask themselves what works offline and how that can be transferred online. With these things in mind, a fresh strategy for fundraising online and incorporating innovative tools can be developed. An important place to start is the consideration of what research has already been completed surrounding examples such as the identification theory, intrinsic and extrinsic motivations for giving and philanthropy, as well as effective fundraising approaches, in particular transparency and empathy.
Relationships first, funding follows 
Kelly (1998) examined fundraising through communication and public relations strategies, by looking at real world examples. She shifted the definition of fundraising from one that was focused on the collection of money, to one that was at its center relationship building. Fundraising, she wrote, is “the management of relationships between a charitable organization and its donor publics” (as cited in Waters, 2007, p. 61). Beyond a definition, scholars have studied the motivations of those who give to fundraising efforts. Schervish and Havens (1997) developed a theory of giving they called the identification theory that ties in well with Kelly’s concepts. It asserts that people give out of “self-love” or as a sort of side effect to focusing on themselves, rather than out of disregard for the self as had previously been believed. As they put it, “Charitable giving derives from identification, identification derives from encounter, encounter derives from relationship, and relationship derives from participation.” (Schervish & Havens, 1997, p. 240) Kelly’s relationships can be built through Schervish and Havens participation. The Internet has the ability to develop each of these.
Deci and Ryan (1985) developed another applicable model: the self-determination theory. They found motivations worth considering when examining philanthropy are those that are intrinsic and those that are extrinsic (1985). More recent studies suggest intrinsic motivators—those that come from within a person like a personal goal or an inherent interest or enjoyment factor—are far more powerful than extrinsic—motivators outside of the self, like another person or society’s expectations (Ranganathan, Loebl, & Radosevich, 2011). While the majority of these studies were conducted outside of or before the Internet, much of what is successful offline can be seen online as well. Hart (2002) made the link between nonprofit success and relationship building online:
Success will come not from an emphasis on the technology, but on cultivating and enhancing relationships. The Internet provides countless highly efficient opportunities to enhance relationships, improve donor satisfaction and, therefore, to raise more money. (pp. 353-4)
These research-based ideas support long held practices of nonprofits based on a belief that the best and most consistent donors are those who are made to feel they have a personal connection to a cause. Strategies for nurturing this kind of relationship are likely to be successful both on and offline (Schervish, 2008). For example, using Facebook, nonprofits set up “fan pages” that function similarly to a Facebook profile. Through it, other users have the ability to show support for the causes of their choosing by “liking” or “fanning” a nonprofit’s fan page. Nonprofits can interact with their fans by doing anything from sharing stories or photos to talking about their mission. Currently, many actions taken online are replications of offline social interactions like conversing or sending and receiving mail.
Taking all of this into consideration, when fundraising is viewed as relationship building, nonprofits can apply what they already know about fostering relationships with potential donors to online realities. Though research suggests that monetary results are not yet substantial enough to leave behind other techniques—and may never be—it is clear from the capabilities users are seeing of connecting through online networking, that this is an area well worth any time and energy nonprofits are willing to expend (Hart, 2002).
Innovations online, a unique reality
Beyond the mirrored facets of online and offline realities, there are aspects of relationship building strategies that are unique to an online reality. The rest of this paper will develop those strategies by discussing them in the context of the following Internet-related themes:
1. Audience – The Internet provides an instant potential audience of millions, maybe billions of people that are more accessible than ever before.
2. Interactivity – By generating content, guiding conversations, and supporting users through Web platforms, nonprofits can cultivate relationships in a fresh, more transparent way.
3. Digital storytelling – On the Internet, nonprofits can foster relationships through a medium they know well: storytelling. Now storytelling holds new capabilities because of its potential to be shared, but also its potential to incorporate advancing media technologies like videos, photos, slideshows and more.
4. Collaboration – The newly enhanced audience is using online platforms to communicate and collaborate, working together to strengthen ties and spread a message.
5. Public relations – If nonprofit organizations promote themselves online using best practice public relations techniques, they have the potential to reach far more people while spending far less energy and resources.
The way nonprofits can build relationships online and grow their ability to raise funds becomes apparent when viewed through these specific facets of the Internet: audience potential, interactivity, digital storytelling, collaboration, and online PR. Each will be discussed in more detail.
Potential reach: 7 billion
The first thing to recognize when considering the impact of fundraising in the context of the Internet is that a nonprofit’s message has the potential to reach across the world and back—with an audience of billions. This ability influences all aspects of online activity in regard to building relationships. A press release published online has the capacity to reach a larger quantity of people than one that is sent by mail to the press, for example. But very few of the 7 billion humans will ever actually come across it.
Actual audience: smaller, but accessible in a new way
The number of Internet users amounts to far fewer than 7 billion. According to the numbers reported on their respective Web sites (as of Oct. 23, 2011): video-sharing site YouTube has hundreds of millions of users[1]; status-updating platform Twitter reports more than 100 million accounts created[2]; Facebook has 800 million registered users[3]; and Causes, the most popular application for nonprofits on Facebook, has 140 million users[4]. One tweet or video posted will reach only a fraction of those. The number of users of online tools is much higher than most nonprofits will ever reach.
Shirky (2008) explains the changed audience through his theory of online organization. The Internet eases organizing capabilities by lowering coordination-related expenses. So, in addition to content on social media, digital communication like e-mail and e-newsletters will still reach a bigger audience as a result of the lowered cost of production and ease of accessibility online. For example, it is easier for people to give an organization their e-mail address than to submit a physical address, so nonprofits have a better chance of growing a list of contacts. Social networks can also bring together people from around the world with niche interests. An organization can do a keyword search on most any SNS, like Twitter, and yield the accounts of thousands of potential supporters without needing to make a phone call or pay for solicitation lists from other nonprofits (Miller, 2010).
Though quantity is good, localized growth is often more effective, especially for a regional or hyperlocal nonprofit. As Shirky (2008) described, electronic networks are serving to supplement activities in real life rather than to enhance the separation of the two realities. He points to MeetUp as an example of a site that makes use of simplified gathering through online networks by finding neighbors with similar niche interests and joining them in the real world. Therefore, if a nonprofit and all the communications that come out of it are exposed to a larger number of people, Internet users who share the interests of the nonprofits have a greater chance of finding the cause.
The Internet opens the message of a nonprofit up to a much broader audience, but the significance of this lies in the ability to hand-select, or target, individuals who already exhibit intrinsic motivation to care about a cause. Relationship building is easier and more successful if people already have an invested interest. This is related to the identification theory of giving. If people can identify with the action that will result from an organization’s work, they care more (Schervish, 2008). Nonprofits can achieve this targeted relationship building through SNSs in a way they cannot offline. With the audience in place, the focus can be put on implementing the right strategies for attracting their attention and getting the most out of the larger network.
Making good use of newly interactive capabilities
Some of the strategies just mentioned fall into the realm of interactivity. Increased access to information leads to greater transparency. This can be a good thing for nonprofits since transparency is important to today’s donors (Sargeant, et al, 2007). Some common practices in interactive media have been established already, but many underutilized strategies can be implemented. Better use of interactive tools can increase transparency for nonprofits and consequently strengthen relationships with donors.
The Web allows for user engagement to take place in new ways. Perhaps most visibly this comes in regard to public conversation and communication capabilities. On the Internet, conversations are possible across all boundaries. Simply in regard to media, people can engage in a new way that they can’t offline through the convergence of video, text, graphics, design and the agency available in navigating those. Suddenly the experience of digesting information is transformed. Farrow & Yuan (2011) demonstrated that the more users interacted with a nonprofit, the stronger their emotional and network ties to it became. They also attributed both of those things to higher likelihood to donate (2011). These findings suggest that interactivity allows nonprofits to strengthen ties, build relationships with supporters, and positively influence fundraising.
One way many nonprofits can make or have already successfully made use of this is by generating conversations on SNSs or through their Web site. On Facebook for example, charity: water posts an update to its fan page offering a chance to win a T-shirt. Users who follow the page will see the post and can choose to respond with a comment or a “like” which attaches the post to their own feed, allowing their network to see it. Now friends of that user may see the action on their respective Facebook feeds and add to the “conversation.” One interaction quickly reaches to the networks of each fan that participates, growing the impact. Flickr and YouTube allow nonprofits to upload photos and videos for users to comment on. Additionally, nonprofits often start similar conversations on their own Web sites through blogs with commenting capabilities. In these ways, content becomes more interactive than ever before. Through this interactivity, relationships between nonprofits and supporters are strengthened.
But there are many ways nonprofits can be more interactive that organizations aren’t yet implementing. One reason interactivity is important to building relationships is because it allows people who care about a certain cause to feel more involved with it. Importantly, research about a fundraising effort following the earthquake in Haiti uncovered two underutilized SNS strategies for nonprofits interacting with supporters (Ranganathan et al., 2011). The study found that for young adults recognition for any effort or contribution made on behalf of a nonprofit acted as intrinsic motivators for them and positively correlated to intent of charitable involvement, either through donation or volunteerism (2011). These two strategies are easy to implement through SNSs.
Interactivity doesn’t have to be limited to SNSs or social media. Bennet and Barkensjo found in 2005 that nonprofit Web sites with higher and better levels of interactivity perform better (as cited in Sargeant, West & Jay, 2007). A study on impulsive online donations found that “strong feelings of personal involvement” with an organization correlated positively with donors’ likelihood to give (Bennet, 2009, p. 120). Additionally, if a person believes a close friend or family member would approve of a donation he or she was more likely to make it. When people know that someone in his or her circle has donated, he or she is more likely to as well (Bennett, 2009). These examples demonstrate how influential interactivity can be on intrinsic motivation. Intrinsic motivation as it relates to interactivity is important to keep in mind no matter the medium. Interactivity can be used to strengthen ties with donors by keeping recent research in mind.
Even with the best setup of interactivity, success would be difficult to obtain without also incorporating good storytelling.
Making more connections through stories
Storytelling has long been essential to any good public relations (PR) whether it be for Disney World or the corner market down the street. The potential for storytelling online is huge. In fact, perhaps because it’s an extension of pre-Internet PR techniques, it’s an area nonprofits have already done fairly well with on social media (Miller, 2011). But even more can be done. Capabilities are no longer limited to static text and photos, but now include video, photo albums, Web pages, audio, and innovative hybrids of all of those.
In order to target more directly and engage more effectively, these tools must be used with consideration. Aaker and Smith (2010) develop principles of storytelling with social media. They emphasize the importance of empathizing, being authentic, and matching the media of the audience (2010). Stories are a place where nonprofits can determine who they want to target and tell a story they would want to hear. Stories can offer greater transparency to nonprofits. And stories must be told in ways that the audience will most readily access it (Aaker & Smith, 2010). In other words, stories are essential but are most effective when the audience is given serious consideration.
Transparency is shown to be one of the strongest factors in determining trust between supporters and organizations (Sargeant, et al, 2007). Partly this is because it demonstrates when an organization is successful. For example, if donors know how their money will be used they are more likely to donate (Ranganathan et al., 2011). Similarly, the apparent efficiency of a nonprofit is linked to an individual’s likelihood to donate (Ranganathan et al., 2011). The more a nonprofit can display its work, the better its chance at securing donors. The greater transparency a supporter can see, the greater trust he or she will have in that organization.
Online storytelling can be promoted more quickly and to a larger audience than through offline means. This can be done through e-mails, e-newsletters, YouTube, Facebook posts, Twitter updates, Website postings, blogs, submissions to online publications, and more. Miller (2010) determined specific strategies researchers and nonprofits have already found helpful like using social media storytelling for informing about opportunity for involvement, updating supporters on the work, and using communications to drive viewers back to the organization’s Web site (2010).
In the nonprofit world, one of the most public ways this is demonstrated is when a national tragedy happens. People hear stories and want to help. Nonprofits who have been doing the same work unnoticed every day are suddenly thrown into the spotlight because the field they are in has become relevant in a new way.
Ultimately, storytelling has great potential to grow relationships and spark donations. In the wake of tragedies like the earthquake in Haiti, United States residents proved this by donating through their cell phones, Facebook, Twitter, and Web sites after simply watching the news or an advertisement. Events like this regularly confirm what studies have been finding for years: that philanthropy, though motivated by a broad variety of things, is often triggered by empathy. This is another part of the identification model of philanthropy (Sargeant et al. 2008). Storytelling is an effective way to generate empathy. Since people will be more willing to donate if they empathize, storytelling—in particular strategic storytelling online—becomes an essential action for nonprofits.
Along with the empathetic identification that comes from tragedy, it is storytelling’s susceptibility to sharing that makes it especially connected to other effective relationship-building techniques. Many strategies for engaging users of SNSs and other online forums have already been covered. These have all revolved around actions nonprofits can take.
Perhaps the most uncharted but potentially resource-saving area the Internet could revolutionize in online fundraising appears when nonprofits can step back from the action and let their supporters do the work.
Allowing donors and friends to do the work
The concept behind building relationships instead of attracting donors connects to how strongly we influence those in our circles. Passy and Giugni demonstrated in 2001 that people are much more likely to be involved in a cause when they are recruited by close friends as well as other activists. Being part of a network of family and friends who are already involved in a cause is also a predictor of personal involvement (Passy & Giugni, 2001). The more intimate and emotionally coherent the giving experience, the stronger the relationship between donor and nonprofit appears to be (Network for Good, 2010). Thus, the involvement of causes’ activists and supporters as well as their friends and families—whether or not they donate—is crucial to fundraising success.
How word spreads, then and now
This isn’t an easy thing to intentionally achieve, but it might happen in any number of ways. A YouTube video “going viral” is one widely understood example of this ability for something to take on a life of its own at the hands of thousands of faceless users. But first consider the way this effect played out before the Internet. When Millard Fuller, founder of Habitat for Humanity International (HFHI), heard a rumor that former president Jimmy Carter had praised his affordable housing startup, he made a list of ways President Carter and his wife could help (Youngs, 2007). He persuaded them to meet with him and by the end of the conversation had convinced him to do everything on the list (Youngs, 2007). President Carter followed through and with his celebrity came greater interest than the Fullers had imagined for HFHI (Youngs, 2007). Today, it seems most Americans can name Jimmy Carter in regard to HFHI faster than they can name Millard Fuller. A simple act put in the right hands can give a movement an enormous audience. In the case of the Internet, the audience has the potential to be in the billions.
A few of these events aligned for the Environmental Defense Fund when an oil spill hit the Gulf of Mexico in 2010. Their work was thrust to the forefront of American thought through tragic events. So when they put together a video montage of the damage the spill was causing to the song “Somewhere Over the Rainbow,” and put it on YouTube it went viral. In essence community members found it and reproduced it over and over on Facebook and Twitter. Within a short time the video had acquired hundreds of thousands of views and exposure of the same magnitude[5].
This demonstrates the effect users have on a nonprofit’s online presence. Users made that happen. The Environmental Defense Fund made dozens of films before that each received 200 views at most. It took the involvement of hundreds of thousands of online collaborators to bring the recognition of their work to a grand scale.
How word spreads: a closer look
Collaboration is in the forefront of the point of progression the Internet is at currently. Wikipedia and its users showed the world that in working together, anyone who had the means and desire to do so could help redistribute information faster, more effectively, and farther than ever before (Shirky, 2008). Since then, motivated Internet users have collaborated on many projects. With the Internet, they have the ability to produce their own information for redistribution. All a nonprofit needs to do is provide a platform and users can take off on their own, spreading stories relating to their and the organization’s passion, with no cost to the nonprofit.
Many nonprofits make use of this without recognizing it for what it is—free PR. Nonprofits often guide discussions and content promotion with a simple sentence or two on Facebook or an organizational blog. Existing in the right virtual space is occasionally all it takes. For example, October is Breast Cancer Awareness month and often of their own accord, people who have been touched by the disease will change their status and ask friends to remember the cause. Other collaborators may respond or change their statuses as well. Sometimes users ask others to change their status to show support for a cause. A well-known nonprofit like the Susan G. Komen foundation might even get included there. An easy way for nonprofits to get the ball rolling on this sort of collaborative action is through Twitter. One interesting tweet can spread far and will usually contain a link to the originator’s Twitter feed. This is called “mentioning” and has become a normal practice on SNSs—one that can aid collaborative PR for nonprofits. Additionally collaboration can simply be a user uploading a video to YouTube from a home-building project or photos to Flickr from a trip abroad. These items all have links that can easily be spread and shared online.
New means of communication bring a new kind of relationship
Collaboration can happen anywhere, but on the Web it has the ability to spread quickly and more efficiently (Shirky, 2008). The Web also breaks down the cost of organizing intentional collaboration by allowing users from anywhere to electronically share and build from each others’ ideas without having to find a time, means, place, etc. to meet (Shirky, 2008). Additionally, when someone is responsible for producing content they will be more engaged and more invested in it (Passy & Giugni, 2001; Shirky, 2008). For nonprofits this means delivering a message through a new alleyway, but also fostering a new kind of relationship.
Those who participate in collaboration are likely to feel more connected to a cause. Involvement and connectedness are key aspects of relationship building and fundraising. In a study of a new trend in philanthropy called Giving Circles, those in charge of the circles were found to donate the most (Eikenberry, 2008). By encouraging and allowing user-generated content and participating in collaborative efforts to produce information, nonprofits are fostering relationships with new and old users.
While they collaborate with supporters online, nonprofits are developing exposure for themselves as a brand, and essentially contributing to a renovation of an old concept: public relations. Nonprofits surveyed by the Nonprofit Research Collaborative most often responded that any fundraising success they found could best be attributed to effective communications (2011).
An integrated approach to PR
Public relations online happens through every entity on the Internet. Unless something is password-protected, it exists in cyberspace somewhere for anyone to see and digest. But nonprofits have some agency in directing users to certain areas of their Web presence and maybe even distracting from others. Still, there is also a certain lack of control. This is often cited by nonprofits as a reason for limited engagement with social media (Aaker & Smith, 2010; Fine & Kanter, 2010). They cannot control what others will say online about them. One risk a nonprofit might see is that negative comments will appear or heated, unproductive debates might take place on their Web space. That information once posted could always be connected back to the name of the nonprofit no matter if it was deleted or not.
But it is this very forced transparency that gives Internet PR an advantage. Fine and Kanter (2010) wrote that:
Transparent organizations are anchored, they are clear about what they do, and they know what they are trying to accomplish. However, they still let people in and out easily, and are enriched in the process. This can only happen when organizations trust that people on the outside have good intentions, a key ingredient for relationship building. (p. 78)
With the growing popularity of sites like CharityNavigator, nonprofits are learning that to be most effective, they must put as much information on those directories as possible. Donors are learning that they appreciate transparency in an organization and are more likely to donate to the ones they know the most about (Bennet, 2009).
Greater PR means greater relationships
To be most effective, using the Internet as a tool for relating to the public should not just be a side effect of social media; it should be an intentional supplement to a nonprofit’s transparent public reputation. When users ask to contribute—or even, if they do so symbolically by sharing a story or reposting a status—they are helping build the brand of that organization. More importantly, they are strengthening connections between their friends, others who care about the cause and between themselves and the organization (Farrow & Yuan, 2011).
The Internet has afforded the nonprofit world a sort of leveled playing field for innovative strategies. Ten years after its inception, an estimated 95 percent are experimenting with Facebook, and nearly all recognize the importance of having some sort of presence online. It’s no longer a valid argument to say no one knows what works, because enough success has been seen that nonprofits have a foundation from which to make a plan for finding their own success online. Taking research from the beginning of philanthropy into account, a clear link between building relationships and successful fundraising strategies for nonprofits is evident. The Internet provides tools for building relationships by offering access to a larger, more specific audience, by contributing to interactivity, through new ways to tell stories, by allowing for greater collaboration among supporters, and through a renovated idea of public relations. If nonprofits take into account the possibilities provided by the Internet in relationship building just described, they will find hundreds of options for fundraising success online.