From crowdfunding to peer-to-peer campaigns, real-time analytics to personalised donor interactions, the impact of online fundraising on charities has been game-changing.

While the traditional fundraising methods of shopping centre collections, direct mail and phone calls aren’t going anywhere, the digital revolution has eliminated geographical boundaries, allowing charities to tap into a global network of potential supporters with a click of a button.

Big support for charities

“One in 12 donations in New Zealand and one in six in Australia were made via online methods in the past year,” says fundraising expert Fi McPhee, managing director of Revolutionise, an organisation that assists businesses, social enterprises and charities with their fundraising strategies.

Those figures have helped place Australia in fourth position on the World Giving Index 2022, with 64% of the population making a donation last year. New Zealanders ranked fifth, with 61% of the population donating to a charity in the past year.

“Online platforms have definitely broadened the reach for charities to ask for donations, and it’s made it easier for the public to give,” she says.

McPhee also runs the Benchmarking Project, an annual program that measures fundraising performance for Australian and New Zealand charities. She says both countries are generous donors, with individual giving income (including regular giving, child sponsorships, gifts in wills and other sources) to charities that participate in the project exceeding A$1.4 billion in the last year.

“In New Zealand, we’ve had about 200% growth in digital giving in the last five years for the charities that we have data for,” McPhee says.

Building trust in online donations

“Overcoming donor concerns about online donations related to cybersecurity, legitimacy and transparency is crucial,” says Russell Postle FCA, consultant at BDO and chair CA ANZ, Queensland Committee Charities and NFPs (not-for-profit). “People are less likely to give, if they think their information will be shared or is not protected,” he says.

While there is no doubt the funds are easier to track electronically, funds that have been transferred electronically to a charity can be intercepted and diverted if there are not stringent security measures in place.

“The risk is more than just about dollars,” he adds. “There is also a reputational risk that could damage the whole giving infrastructure.”

Postle argues that investing in technology is often not prioritised by charities, which may be reluctant to divert funds from research or supporting people.

“Charities definitely need to invest more in technology: not only in cybersecurity, but in the operations. It improves efficiency, which in turn will benefit the cause,” Postle explains. “That can include integrating more seamlessly with accounting software, improving database management and monitoring how and when donors want to be contacted.”

“Charities definitely need to invest more in technology: not only in cybersecurity, but in the operations. It improves efficiency, which in turn will benefit the cause.”

Postle also points to the risks of compliance that come with online fundraising, particularly in Australia where each state has different requirements, something he argues should be harmonised.

“There is a real need for the registration requirements to be remedied. At the moment, you must be registered in the state where the registered office is but if your fundraising activities go across borders, which they can in an online environment, then you need to comply with the requirements of each state,” he says.

Fundraising competition

In the past decade, online fundraising has become increasingly popular, resulting in a saturated digital landscape where donors are bombarded with multiple fundraising appeals. Standing out and avoiding donor fatigue can be a significant challenge.

“Giving is an emotional business and we know roughly 80% of people only give because they are asked to, so there really has to be a motivator to get cut-through on your cause online,” says McPhee.

Pictured: Fi McPhee, Revolutionise

“We know roughly 80% of people only give because they are asked to, so there really has to be a motivator to get cut-through on your cause online.”

“You’re competing with everyone else in the digital space, including peer-to-peer campaigns on platforms such as GoFundMe, so it’s not just charities asking for donations anymore.”

“For this reason, building long-term relationships with donors is vital for sustainable fundraising. However, the digital nature of online fundraising can make it challenging to foster personal connections and maintain ongoing engagement with donors,” says McPhee.

“Online fundraising campaigns may struggle to evoke the same emotional response or create the personal connection that a conversation on the phone or in person does. That’s where the bulk of donations come from, because you can connect more deeply with people – so online engagement should be just one of the ways a charity raises its funds,” she says.