By TODD COHEN, Philanthropy Journal

Editor’s note: This is the first of a four-part series about non-profits and technology from the

RALEIGH, N.C. – Internet giving still represents a small share of charitable giving overall, but it is growing.

And it holds vast potential as a tool for engaging people who can become future donors.

"It’s a critical communications tool, not just a fundraising tool," says Adrian Sargeant, a fundraising professor at Indiana University. "It’s about giving people multiple ways to engage with the organization.

Internet giving came of age after 9/11 and posted big increases after Hurricane Katrina, the tsunamis in Asia and the recent earthquake in Haiti.

According to an by Ted Hart, CEO of consulting firm TedHart.com, online giving in the U.S. grew to $15.48 billion in 2009, up from $10 million in 1999, a figure estimated by Harvard University’s Initiative on Social Enterprise.

Still, online giving represents only about 5 percent of overall giving," Sargeant says.

Making sense of data

With limited resources in the down economy, Sargeant says, nonprofits should make it a priority to better understand their existing data on donors, and they can use affordable statistical-software packages to analyze that data.

"The starting point is to invest in some fundraising analytics, using software to analyze the database," he says, "to do a little profiling and to get a better picture of behavior of individuals on the database."

The goal is to "understand what it is that seems to drive donor value, who’s most likely to stop supporting the organization, which donors are likely to make a planned gift to the organization, who’s mostly likely to consider making a regular donation to the organization," he says. "And all those things can be used to inform the fundraising strategy."

Focus on web traffic

Other priority uses of technology that cost little but can show big fundraising returns, he says, include what is known as "search-engine optimization," or including key words or "tags" on a website to attract visitors who use search engines to find websites with content related to the search terms they use.

Nonprofits, for example, can use a free online service known as Google Analytics to track where visitors to their websites come from, when they visit, how long they stay, which key-word searches bring them to the site, and the specific actions they take on the site, such as reading an article, signing up for a newsletter or making a donation.

Google also offers small grants to nonprofits that let them advertise key words through Google’s search engine to try to attract visitors to their websites.

While they "still have got a long way to go to fully exploit the medium," Sargeant says, nonprofits face the increasing expectation that they will use the Internet and other digital and social media to tell their story and give people a way to reach and find out about their organizations.

"I don’t think you can avoid using the Internet now," he says. "It’s not a choice."

Still, the Internet is "performing better now as a relationship-building medium for most organizations than it does as a purely fundraising medium," Sargeant says. "It’s about giving people multiple ways to engage with the organization."

More than money

Nonprofits should look not only at the money they raise through websites, email and social media, Sargeant says.

"If you can get people to interact with you in three different media, they tend to be more loyal," he says. "It would be a mistake to just look at the short-term returns you generate. It underestimates the impact you’re having on supporter relationships."

So text-messaging, while increasingly popular, represents "just another element of the fundraising mix," but does not by itself create relationships, Sargeant says.

"You can’t do anything with those folks afterward because there’s no mechanism to build a relationship," he says.

Social-networking sites like Facebook also are important because they "just give you multiple ways of engaging with donors," he says. "They’re good in the sense of building relationships and loyalty with your supporter base."

In fact, he says, donor "identity" will be the "next big thing" in fundraising.

"We often express an identity through our support of an organization," he says. "When you’re using social networks, you’re allowing people to express part of who they are through support of your organization."

Part Two: Established strategies for new technologies

(c) Philanthropy Journal

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