Web-based fundraising is coming of age. That’s the conclusion of the 2011 Convio Online Marketing Nonprofit Benchmark™ Study, which evaluated the results of nearly 600 nonprofit organizations that use Convio’s software.

The study, released in early March, found that online is the fastest growing fundraising channel for nonprofits. In 2010, Convio’s clients raised more than $1.3 billion online, up 40 percent from 2009. The median growth rate in online giving was 20 percent, compared to a median growth rate of 14 percent in 2009. Still, while the majority saw growth, a significant minority saw decreases — some as high as 21 percent.

The study also showed that online giving is growing fastest for small organizations. Organizations with fewer than 10,000 email addresses saw a 26 percent increase in online giving.

Email lists are increasing in size, too. The report found that the median total email file grew by 22 percent to 48,700 constituents.

Certainly, this is good news for those who have embraced online fundraising. But many Canadian charities have very basic online marketing capabilities and many organizations don’t even use their email systems for fundraising. They have been reluctant to put more resources into online fundraising until it proves itself. Now the proof is here.

Donors’ use of websites slowing down

On the less than positive side, web traffic rates grew very slowly. Only half of all respondents saw their website traffic increase from 2009 to 2010. Overall web traffic growth in 2010 was just 2 percent, the second consecutive year that the growth rate has been in single digits.

Also on the decline are web registration rates. The rate at which nonprofits converted website visitors to their email file in 2010 was 2 percent – a decrease from 2.2 percent in 2009.

The open rates of email appeals were down from 18.5 percent in 2009 to 17.6 percent in 2010, while newsletter open rates declined from 20.4 percent in 2009 to 19.2 percent in 2010.

What does all this mean?

First, it’s important to understand that this is a large US study from a company that deals with medium-to-large nonprofits. Here in Canada, the majority of organizations in the sector are smaller. Likely, that means that these numbers cannot easily be transferable to the Canadian nonprofit sector. In fact, we are most likely behind the US on a number of these measurements.

Second, this does point the way to the future. While online giving may not be as rosy here as in the US, this study shows clearly where fundraising is going. The recent 2010 Non-Profit Year-in-Review study comes to the same conclusion.

Third, some of the negatives listed above appear to be symptoms of a lack of a valid online marketing strategy. It is one thing to start sending fundraising emails, it is another to make it compelling. That might be the missing link here.

Overall, the study shows the need for flexibility in fundraising strategies, especially when it comes to online marketing. If the world is going online to give, Canadian nonprofits should be there to help facilitate.

John Suart is a marketing and communications expert with an MBA who specializes in nonprofits. His blog, the Nonprofit Marketer, has a host of useful tips and advice on everything from budgeting to branding.