Grosshandler: How Will Nonprofit Businesses Do This Holiday Season?
Traditionally, fundraising is at its strongest this time of year.
Many nonprofits rely on the fourth quarter for a substantial portion of their yearly income. So far, the year has been really hard. Anecdotally, as well as in statistics published by the Chronicle of Philanthropy, overall giving is down.
Hurricane Sandy will both help and hurt those numbers, as total giving will probably go up from earlier predictions, but the giving will go the Red Cross and other relief organizations, not to social service agencies and the like.
One bright spot for nonprofits is the prediction for a healthy online holiday shopping season. comScore reports that year-over-year online shopping is up approximately 15%. Forrester is forecasting 15% growth in online sales for the upcoming holidays. For those nonprofits that are taking advantage of retailers' dual desire to do good and to do well, this is good news.
iGive.com, the company I founded in 1997, is forecasting 30% or better growth this season. Our forecast is based upon four important trends we're seeing. First, if nothing changed, that 15% predicted growth rate in online sales is a nice baseline. As an entrepreneur, it's nice to feel that so long as we don't make too many mistakes, we should grow at least 15%.
(Read More: Take That Scrooge! Corporate Gift Giving on Rise)
Second, the communication sophistication of even the smallest nonprofits is increasing. Cause marketing, the notion that a purchase of something can help a charity, relies in substantial part on the nonprofit facilitating getting a message to the consumer. By actively using social media to connect with their supporters, nonprofits have a built a mechanism that is well-suited to cause marketing. In resource-shy nonprofits, easier means it may get done. More and more small and mid-sized nonprofits are now able to participate as the barriers to success have fallen. What used to take a formal marketing department now takes a 20-year old intern.
Third, as early as the beginning of September, we were seeing aggressive promotions and offers from many of the 1,100 retailers with whom we do business. The iGive consumer loves to help her cause when she shops, but she also loves a great deal.
(Read More: Gifts Ideas for Everyone on Your List)
Lastly, technology is playing an important role in the growth of the opportunity. Shopping online is becoming old-hat. And that's good for nonprofits that are viewing online shopping as an incremental funding source. But on top of that, advances in the underlying architecture of the major internet browsers (Internet Explorer, Firefox, Chrome, Safari) have made easier for companies to create apps that simplify the experience for the consumer. And a simplified experience directly translates into broader and faster adoption.
However, times are tough for charities in this country. While the monies they raise from the activities of online shoppers will help them achieve their missions, by no means will it be enough. It's complementary and additive. It doesn't relieve business leaders from continuing to support the causes they care about with time and money.
Robert Grosshandler is the Founder of iGive.com, an internet shopping mall where purchases benefit shopper's favorite causes and charities.
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