Charities Expect Donations to Increase in 2011

Charitable giving is expected to increase in 2011 as the economy strengthens and more nonprofits harness the fundraising power of the social media.

Historically, charitable giving increases one-third as fast at the stock market, reports the market research website Sparxoo.com. Blogger Ethan Lyon said, “If we look at the correlation between the stock market and charitable contributions, we should expect 2011 to be a greater year of giving.”

Methods will change, as well, as social media transforms the way people make their charitable contributions, Lyon said, predicting that Facebook alone will be the conduit for up to $55.4 trillion in charitable donations by 2052.

The Haiti earthquake marked the turning point in mobile fundraising. Phone texting accounted for one-firth of the over $22 million donated to the American Red Cross for the earthquake victims.

“Mobile proved to be a dominant player in Haiti relief and set a precedent for how charities receive donations in the future,” Lyon said. “We expect mobile charitable donations and engagements to increase exponentially as iPhone’s, Blackberry’s and Android’s and non-smartphones play a more intimate role in our daily lives.”

Mobile phone donations also played a significant role in fundraising for victims of the March 11 tsunami and earthquake in Japan. Text-message contributions accounted for more than $4 million of the $169.5 million raised by the American Red Cross in the month since the disaster, said The Chronicle of Philanthropy on its website, philanthropy.com. The Salvation Army had received almost $5.6 million in Japan relief by April 7. Of that, $3.9 million was donated online and $167,000 by text message.

The relationship between social media and philanthropy is still in an early stage, said Philanthropy Journal on its website philanthropyjournal.org. Contributor Steve MacLaughlin said, “This communication channel is going to take the next big leap in 2011. This means that the use of mobile for messaging, content delivery and putting tools in the hands of supporters will continue to accelerate.”

Mobile donations can be the first contact an individual has with a charity. Nonprofits can use this contact to enlist and engage supporters, allowing social media to complement more traditional fundraising efforts, Jenifer Snyder, executive director of The mGive Foundation told smartblogs.com. Snyder said, “In a recent study that we did, results indicated that 41 percent of text donors learned about, or were motivated to give, via text through a social networking call to action. This is a key marketing channel that cannot be ignored.”

Of the 3 million donors who texted contributions for Haiti relief to the American Red Cross, for example, 20,000 opted to receive ongoing communications from the nonprofit, said Lyon, of Sparxoo.com. Nearly all were first-time donors to the Red Cross.

Perhaps the most innovative use of technology for fundraising this year came from a bank. A new “Donate to Charity” button on Wells Fargo ATM machines has prompted customers to contribute $1.5 million to the American Red Cross since March 14. According to Michael Brown, vice president of corporate and foundation partnerships for the American Red Cross, the ATM drive “really shows what happens when you use technology to meet customers and donors where they’re at.”

The bulk of charitable giving in the United States comes from individual donors, according to the market research website Sparxoo.com. About 65 percent of American households give to charity for a mean average of $870 each.

Affluent households are much more likely to give, reports Spectrem Group, a market research firm specialize in the attitudes and behaviors of wealth investors. Spectrem defines wealth in terms of net worth excluding primary residence.

More than 90 percent of the wealthiest – those with a net worth of $25 million or more – give to charity. Twenty percent give between $10,000 and $100,000 each year, while 4 percent give more than $1 million.

Mass Affluent households – those with a net worth of $100,000 to $1 million – give an average of $1,741 a year. Investors with a net worth of $1 million to $5 million give an average of $5,080 a year, and those with $5 million to $25 million give $13,207 a year.