Why do people give money online? It’s an important question for any organization that relies on donations in any way, including higher education organizations.
We carried out a study to find out why people give, what holds them back, and how organizations can remove friction from the giving process and encourage more donations.
Before we look at the key findings, let’s take a quick look at how and why people give money online.
How online donations work
The giving process usually follows three main steps:
- Interest — when someone finds out about the opportunity to give from an interruptor like an email or ad
- The involvement or engagement point — the critical moment (on the donation page itself) when the visitor decides whether to give or not
- Donation — when they make the final decision to give money
Going from engagement to donation requires an emotional connection. There is going to be friction at this stage — anxieties around parting with money, providing personal information, taking time out of their day, and more.
If that friction outweighs the emotional connection, your potential donor may abandon the process even right at the end.
The big question for higher education organizations is how to develop a strong emotional connection and minimize friction.
In this study, we looked at the value propositions used by organizations, the incentives they used, and the friction users of their sites encountered when trying to donate.
1. There is room for improvement
For the vast majority of higher education organizations, the online giving process has a lot of room to be improved.
The average organization in our study scored 18% lower than other nonprofits. On top of that, 8 out of 10 higher education organizations in our study scored less than 50% — compared to only 3 out of 10 other nonprofits who scored this low.
Why are higher education organizations struggling to optimize their online giving processes? In the rest of these points, we’ll aim to show you why.
2. Online giving experiences for higher education organizations have too much friction
The online giving experience for higher education organizations has significantly more friction than other nonprofits.
Friction can be defined as anything that slows a donor down or causes them to abandon the process, and in this case we can split it into a handful of main types:
- Field Number Friction — if you use too many form fields and try to collect too much information, it’s more likely that someone will abandon the process. For example, making cell phone number a required field to donate resulted in a 42.6% decrease in conversion rate, and ultimately a 50.6% reduction in revenue.
- Field Layout Friction — the way fields are laid out can impact conversion rate. We found that websites increased conversion by 39.4% just by using more horizontal space and grouped forms.
- Confusion Friction — overwhelming users with navigation elements like multiple CTAs and insider language can drive them away. In one example, a donation page was able to increase conversion rates by 44.8% by making some simple fixes like eliminating links that lead away from the donation page, designing a page purely for donation, and removing navigation links from the header.
- Decision Friction — asking donors to make too many decisions and choose between lots of options can drive them away.
- Steps Friction — having too many steps in a process (full page loads) increases the chance of abandonment. In one example, an organization increased donations by 176% just by removing the verification page.
- Device Friction — if the giving experience is not optimized for a mobile device or tablet, donations suffer. 96% of higher education organizations actually had a mobile responsive giving experience — but we found that other friction factors tend to have an enhanced effect on mobile devices, making it even more important to address them.
3. Most higher education organizations aren’t providing a strong enough reason to give
While reducing friction is key to improving online giving (and easy to address), the most important factor is the message or value proposition.
The donor needs to answer the question, “Why should I give to you today instead of another organization or not at all?”
To answer that question, we look at four different factors:
- Appeal — do you want it? How much?
- Exclusivity — can you get in anywhere else?
- Clarity — do you understand it? How quickly and easily?
- Credibility — do you believe it?
Using this model, we found that only 22% of higher education organizations had a strong reason to give on their donation page. For large universities, the figure was only 11%. The nonprofit average is 33%, but community colleges scored above the benchmark at an impressive 50%.
Why did large universities fail so dismally? The main reason is that they didn’t even try. 54% of higher education organizations used less than one sentence of copy on their donation page.
In one experiment, adding just 4 or 5 short paragraphs led to a 150% increase in donations. There are serious gains to be made here for relatively little effort.
4. There’s not enough focus on recurring giving
Recurring gifts are an excellent way not just to increase your revenue, but to reduce the pressure to constantly attract and convert new donors. Done right, recurring gifts allow you to compound your donors month after month, growing your donation income instead of just maintaining it.
However, we found that 1 out of 10 higher education organizations did not accept recurring gifts at all and 9 out of 10 didn’t give a specific reason why someone should make a recurring gift.
In one experiment, we found that simply adding a short paragraph about monthly giving led to a 48.4% increase in recurring donors from new visitors, with no impact on one-time donation rates.
Recurring donors are almost 4 times more valuable than one-time donors for large organizations and 10-11 times more valuable for small and medium-sized organizations. It’s imperative to prioritize them.
5. Higher education organizations are not using their thank you page strategically
The end of the donation process is not the end of your relationship with that donor. In fact, it’s just the beginning of the engagement process.
At this stage you can lay the foundations for a long-term relationship and plant the seeds for future gifts.
However, most higher education organizations are missing this valuable opportunity, with half of them failing to thank donors in a meaningful way and 44% failing to offer any additional action to take.
Of those that did offer a next step, the most common was to ask for a social media share or connect (26%), followed by asking if an employer would match the gift (14%), asking for feedback (8%), and asking for more information about the gift (2%).
Hardly any higher education organizations asked for a second gift (neither did most other nonprofits). Only 8% did this — but this is a missed opportunity.
In one experiment, we saw that just over 5% of people immediately upgraded to a recurring gift and nearly 29% immediately made an additional one-time gift when asked to do so. Simply asking for another gift — something almost nobody is doing — can yield significant conversion rates.
Quick fixes can lead to big gains
If there’s one takeaway message from this research, it’s that most of the areas for improvement for higher education fundraising are remarkably easy to address.
With just a few tweaks here and there, higher education organizations should be able to seriously improve their donations process and make significantly more money.
To find out more about what we learned by analyzing the giving experience of 109 higher education organizations, you can get the free research study here.