For me the Barn Find of 2010 happened while analyzing Network for Good's data. I was looking into the timing of giving. I knew online giving would be concentrated in the month of December, but didn't know how much. I also didn't know how concentrated giving was on December 31.
Further, the December 31st spike translates into online revenue that 24 times more than the average day of the year.
(Learn other important findings by downloading the Network for Good study. It's free!)
So what makes this finding more valuable than the vintage Duesenberg? If you're like many organizations, your website is a conflicted place. The organization tries to balance a list of goals for its website. This list includes things like PR, branding, education, advocacy, and so on. Fundraising often gets short shrift.
The December 31st spike means that even if the homepage can't be a fundraising engine year round, it should be on December 31st. Once you reap the rewards from focusing the homepage on giving for this day, you can then set your sights to the last week of December, or even the entire month.
Jon, Happy New Year!
ReplyDeleteThe data you presented here are in line with my findings. Typical donors would more likely give prior to the “last minute” to spread their holiday goodwill. But tax incentive might play a stronger role for the December 31st donors,
However, I think tax benefits are an oversold concept among average donors. Based on my data, individual online donors typically give between $50 and $100 on December 31. To be able to take advantage of the tax benefits, donors must have taxable income AND their itemized deductions must exceed the standard deduction amount. Even if their incomes and expenses meet these two conditions, a donation of $50 to $100 would only end up with a smaller amount in the form of tax exemption. Suppose an online donor only give to one organization on December 31, would you wait until New Year’s Eve (a holiday normally for family celebration) to take out your credit card and go online and make a one-time donation only to get about $10 - $20 as sort of a “matching gift” from the government? I know I would not.
To me, there may exist two possibilities. The first possibility is that December 31st donors give to more than one charity on that day so that their total donation may well exceed their average gift level of $50 - $100. If that is the case, these donors are worth much more than what they give to your organization.
The second possibility is that they may have given small sums to one charity but later found their tax benefits to be minimal when preparing for tax return in the following months. Their disappointment at this finding would seriously hurt their motivation to give again in the next year because their initial giving was heavily based on tax consideration (influenced by media),
In my daily work, I also found that online acquired donors are at least 50% less likely to continue as compared to DM acquired donors. I think both possibilities above could contribute to this phenomenon
What is the strategy? I think we should honor a significantly higher online ask array in December, especially on December 31. And do not forget to make a note next to the high-end ask amounts (to truly take advantage of any tax benefits).
With this move, donors in situation 1 may feel more compelled to concentrate their giving worth to your organization. For donors in situation 2, they would be more willing to resume giving once they have found their donations are meaningfully tax deductible.
George
Yes, Happy New Year everyone!
ReplyDeleteGood thoughts and insights as usual, George.
I totally agree with using higher asks on December 31, as well as through the entire month. I, too, have done research into this and have recommended this to Organizations.
The tax points you make are valid, but don't tell anyone! The concept of Positive Time Preference is at play here. It goes like this: 1) I'm going to give a donation; 2) I believe I get tax benefit (many don't, but that's beside the point); 3) I will give now on December 31 to get the tax benefit a year earlier than if I wait until January 1.
It would be interesting to survey year-end givers to see what their beliefs are about tax advantage and whether they itemize. It could be there's more of what someone once called a "national habit" at play here.