Online Fundraising And The ‘Obama Effect’

by Tamar Snyder
Staff Writer

Likud leader Benjamin Netanyahu — with his copycat Web site featuring “donate now” buttons, videos and social networking plug-ins — isn’t the only one taking a page out of Barack Obama’s campaign playbook. Jewish nonprofits are beginning to see the Internet for what it is: a potential cash cow, even in these tough economic times.

Insiders attribute the increased interest in online marketing on the part of Jewish nonprofits to the president-elect’s unprecedented fundraising prowess. During the month of September, Obama raked in a whopping $150 million, 75 percent of which came from online donations. And overall, close to half of Obama’s $639 million in campaign funds came from small donors contributing less than $300.

“Obama picked up where Howard Dean left off,”

wrote Harvard Business School professor John Quelch in a blog post. Obama “leveraged his Web site, the blogosphere, and even user-generated content (remember Obama Girl) and video games to engage not just donors and volunteers, but all citizens.”

Online giving is coming of age. And the Obama campaign’s success is poised to positively impact the way in which synagogues and other Jewish nonprofits approach online fundraising, says Robert Evans, CEO of EHL Consulting.

“If you go to synagogue Web sites, it’s only very recently that we’ve seen contributions accepted online,” he says. He predicts that 2009 will be the banner year for major changes regarding how Jewish nonprofits approach online fundraising and develop new ways of giving online.

Whether that prediction materializes depends on how quick Jewish nonprofits — many of which are technologically backward — will be to embrace Internet fundraising and invest in attracting the forgotten givers, those whose donations fall in the $100 to $200 range. “A lot of Jewish organizations, even if they don’t want to admit it, are in a rut,” says Dan Brown, founder of ejewishphilanthropy.com. “Most of the Jewish world is not effectively using the Internet.”

While online fundraising is cost-effective, it doesn’t come cheap. And as budget cuts result in hiring freezes, existing nonprofit employees may not have the right technological tools to set up a successful online fundraising campaign.

Yet Jewish organizations say they are increasing their online efforts. The UJA-Federation of New York has seen an overall growth in online donations, especially in smaller gifts, with the total amount raised online up by 20 percent this year. “UJA-Federation has made concerted strides to invest in our online channels for donating by expanding our efforts beyond e-mail and working with our donors to identify their needs, with an eye to achieving cost efficiency and respecting environmental concerns,” says Leslie Lichter, executive director of direct marketing at the federation.

Organizations like the National Council of Jewish Women are stepping up their online outreach and adding a “donate now” button on every Web page. And last week, JGooders.com, a one-stop shop for donors wanting to contribute online to more than 150 Jewish causes, launched at the United Jewish Communities’ General Assembly.

“In my personal life, I hardly write checks,” says Evans. “It’s so much easier to make transactions online. Nonprofits in the Jewish community need to understand that this is what donors want. That’s the message we’re telling all of our clients: We need to embrace online fundraising.”

While online giving is not new, as Americans become more comfortable paying bills and shopping online, they’re also giving more — and more often — online. Contrary to popular belief, online donors are not always young, and many contribute large amounts online. “The Wired Wealthy” survey conducted by Convio, a provider of relationship-building software, found that 51 percent of wealthy donors preferred giving online, and 46 percent intend to make a greater percentage of their donations online in the next five years.

As the lackluster economy forces nonprofits to slash budgets and postage costs make direct mail campaigns more expensive, even the most techno-phobic nonprofits are looking to the Web. “It’s cheaper to maintain relationships with donors online than in a more traditional manner,” says Evans. “Contact is quicker, fresher, more relevant and personalized.”

In the Jewish nonprofit world, only a select few organizations stand out for their technological savvy and success in drawing online dollars. Jewish National Fund very publicly became the first Jewish nonprofit to raise $1 million online in 2003. Last year, JNF raised $2.8 million online in 2008, up from $2.3 million in 2007. The average gift increased, too, from $143 to $157.

“What Obama was able to do was to bring people together for a single cause,” says Linda Wenger, JNF’s executive director of marketing and communications. “Fundraising can spring from that.”

What’s JNF’s secret online fundraising weapon? The $18 trees, Wenger says, which people come to the Web site to donate. “How many other nonprofits have a product to sell?” she says. “The trees are both a plus and a minus. Then, it’s up to us to engage them and learn that we’re not just trees. Our Web site has been a powerful tool for that.”

In December, JNF will unveil a totally revamped site, with more robust keyword and search capabilities, and donation opportunities on each page. Designated giving is another key to JNF’s fundraising success; donors choose to direct funds to specific categories, such as “water,” “research and development” or “education.”

“We’re empowering people to decide where their money is going to go,” Wenger says. “That kind of accountability is very important.”

The American Jewish World Service is another rare Jewish organization that boasts a sophisticated online structure. Back in 2004, in the wake of the tsunami in South Asia, more than 35,000 new donors came to the AJWS Web site — and 26 percent have become repeat donors. “We realized after the tsunami what a potential gold mine this was,” says Joshua Berkman, director of media and marketing at AJWS. “A lot of people are online all day. We’re reaching them where they want to be reached.” To date, online donations are on pace and may exceed that of 2007 — no small feat given the troubling economy.

AJWS’s success can be attributed, in part, to employing strategies similar to those used by the Obama campaign. The organization currently employs three full-time staffers to manage the organization’s online presence and maintains an e-mail list of 75,000 people. Messages are carefully targeted for maximum impact. “Not everybody gets every message, and not every message is a direct appeal for money.” The key is relationship building. AJWS sends out educational materials, updates from the front lines, and volunteer opportunity notices.

The Obama campaign “will serve as a very good case study to look at” and “introduced online giving to an incredibly large group of people who are much more comfortable with online donations,” says Berkman. “For a lot of organizations, it was a revolution; for us it was a validation.”

Cheryl Cook, chief operating officer at Hazon, a Jewish environmental organization, says that Obama’s success demonstrated that “people are still willing to give to a cause they’re passionate about.”

In recent years, Hazon has employed sophisticated viral fundraising tools to raise money online. Members who sign up for bike rides and other activities can easily set up their own Web sites, import contacts and send out a personalized letter asking friends and family for support. A thermometer indicates how close they are to reaching their charitable goal. Technical tools eliminate back-end work so there’s no need to type in check amounts and donor information into a main database, and personal thank-you notes are generated automatically.

Instead of Hazon putting out its hand for donations, friends ask their friends to support the organization. “That’s exactly what the Obama campaign has done so amazingly well,” Cook says.

Not everybody, however, is convinced that Obama’s fundraising success will spark a philanthropic revolution in the Jewish world.

“It’s going to be a very long transition,” says Gary Tobin, president of the Institute for Jewish & Community Research in San Francisco. “Most Jewish organizations still rely on major gifts and solicitations from donor bases they’ve worked with over time.”

The Obama phenomenon, he says, is a result of the increasing usefulness of online fundraising. “It’s not necessarily easy to translate the excitement and fervor of a political campaign to ongoing fundraising online.”

tamar@jewishweek.org