We break down the jargon around digital fundraising. Learn key terms and get started on your fundraising journey
The appeal of digital fundraising is that it is easy to set up, accessible to everyone and can have a wide reach.
Recent events have placed greater emphasis on virtual events and digital fundraising. It can be a scary time for those who don’t know the lingo.
In this guide, we decode some the most widely used digital fundraising terms. Breaking down the jargon can help charities to understand what is required for a successful digital fundraising campaign.
“Digital fundraising is simply fundraising using digital technology, which usually means fundraising online,”
- Definition provided by the NCVO
Digital fundraising can take place over a variety of different sources, such as mobile phones apps, text, and social media.
Other methods of digital fundraising include crowdfunding, match funding, charity auctions, and online donation sites. Social media is increasingly being used to solicit funds from supporters. Instagram, Facebook, and Twitch all have buttons on their platforms to accept donations.
The Status of UK Fundraising 2020 Report shows that approximately 60% of charities are trying virtual fundraising. Of those charities, 75% are doing it for the first time.
This year, one of the most innovative digital fundraising campaigns has come from Comic Relief. The charity’s digital fundraiser was held on Tiltify.
Comic Relief had celebrities livestream the videogame Dungeons & Dragons. Comedians Nish Kumar and Sue Perkins took part. Both used Twitter to galvanise the fundraising efforts. Over the course of the event, Comic Relief raised over £25,000 on the Tiltify platform.
Here is our guide to the essential digital fundraising terms.
A charity appeal (sometimes known as an ‘ask’) is a request for donations. Requests could be for a specific cause or event. COVID-19 reiterated how important appeals are. Emergency appeals came from many charities, highlighting the urgency of their plight. Communicating to audiences why charities need funding is essential to a successful appeal.
The donation conversion rate is the percentage of people who donate once they have visited your donation platform. If you have 100 people visiting the site, and 18 donated, the conversation rate is 18%. Clearly, charities want to increase that conversation rate. Donorbox suggests making it easy by reducing the number of pages before payment. Extra pages collecting information tends to reduce the conversion rate.
UK Crowdfunding defines crowdfunding as “a way of raising finance by asking a large number of people each for a small amount of money.” Crowdfunding platforms help charities meet the challenge of raising a large amount of funding. The best charity crowdfunding platforms include JustGiving, Virgin Money Giving, and The Good Exchange.
These platforms work by allowing fundraisers to set up their own webpage to accept donations. The web pages can be shared across email, social media, and other online formats. The effect can be powerful. Fundraisers don’t have to solely rely on their own networks for funds. Instead, fundraisers use the internet’s reach to amplify the fundraising cause across large audiences.
A constituent relationship management (CRM) system is commonly known in corporate organisations as a customer relationship management system. A CRM system helps pull together the power of data for fundraising. The system is the central database for information on supporters, donors, volunteers, and donations. The digital system helps charities stay organised. The other major benefit of a CRM system is that it helps managers identify trends in the data.
Digital engagement refers to the touchpoints of a digital fundraising campaign. When measured across social media, digital engagement can mean how many shares, likes, or views posts have received. Digital engagement refers more widely to any measure of the attention that digital campaigns receive.
For charities on Twitter, we’ve outlined 12 hacks that can increase engagement. Tips include making the best out of your profile and engaging with audiences. Charities can also increase engagement by publishing meaningful content and creating interactive media. Leaders should also encourage the success of charity digital engagement leaders.
Donor segmentation is the process of grouping your audience to identify shared characteristics such as like geography, income, and age. These common identifiers can help charity marketers to help define target audiences. Once teams have identified common groups, marketing teams can target donors using personalisation. A CRM system can help charity teams group audiences together.
Grants and donor funding are two different types of income that charities receive. Grant funding is normally donated by foundations. These donors have specific requirements. They may want to only fund specific programmes and collect information on impact. Donor funding is termed ‘unrestricted’ funding because these funds go to the charity in general. Donor funding can go to charity operations and other investments, whereas grant funding goes towards a specific purpose.
Peer-to-peer (P2P) fundraising is a type of crowdfunding. P2P fundraising leverages individual networks for donation. The fundamental difference between the two is that P2P asks others to join in the fundraising. With P2P, each fundraiser promotes and advertises the charity cause.
Charity leaders will always want to know what the return on investment is. The term, ROI, refers to what is gained in return for spending funds. For digital fundraising, this could be how much is spent on marketing and communications versus the actual amount raised. Other campaigns might measure ROI by quantitative statistics against investment budget.
Charities pay transactions fees when they accept donations on digital fundraising platforms. Fees are normally a percentage of the donation amount. For example, Virgin Money Giving charges two types of fees. There is first a platform fee of 2% of total donations. The transaction fee is charged for accepting donations. The crowd funder charges 2.5% of the donation amount accepted. Transaction fees cover the cost of payments processing.
Virtual events are those that take place over the internet. These types of events allow charities to build a virtual connection with supporters and potential donors.
This year, charities have really shown their creative sides when hosting virtual events. In our review of the Top Ten virtual fundraising ideas, we’ve seen charities host virtual gaming tournaments, digital races, and quiz nights. Funds can be raised through digital ticketing, online donations and sales.