Giving Tuesday, 6 Years Later: How to Deliver Good Growth

George Weiner
Jan 24, 2019 · 8 min read

Back-to-back records in shopping and giving were set the week following Thanksgiving 2018 on Cyber Monday and Giving Tuesday. Despite the fact that the former’s was measured in billions and the latter’s was measured in millions, these benchmarks signal continued growth for these newly-minted successors to Black Friday.

Photo by Simon Maage on Unsplash

Given the contextualizing conversations that anchored Thanksgiving weekend in 2018, including the investigation into the real costs around Amazon’s model of instant-gratification delivered in one click and pushback around the company’s announcement of its second (and third) headquarters, Giving Tuesday 2018 left us with a deeper question: Could this day of digital fundraising eventually eclipse Cyber Monday?

Here’s hoping.

The Algorithmic Goliath

When Cyber Monday was formalized by the National Retail Foundation (NRF) in 2005, it was hard to imagine that it would soon become the largest shopping day on record — delivering $7.9 billion in a single day 13 years later. This represents a growth of 19%, and marks the third year in which Cyber Monday spending beat Black Friday totals.

Comparatively, Black Friday’s beginnings are a bit murkier than a codified marketing campaign. The launch of the Macy’s Thanksgiving Day Parade in 1924 began to more closely link Thanksgiving weekend with the start of the holiday shopping season (a handy side-effect of having one of the world’s largest parades be semantically linked to one of the country’s top 20 retailers). The shopping season and Thanksgiving became so inextricably linked that the relationship even pushed Congress in 1941 to move the date of Thanksgiving from the last Thursday of November to the fourth day of November (to account for years in which Thanksgiving may have otherwise landed on November 29 or 30, thereby shortening profit windows for retailers).

Forty years later in Philadelphia, the term “Black Friday” originated as a means of describing the phenomenon of streets congested with motorists and pedestrians in search of a good deal on their day off after Thanksgiving.

The story of Black Friday is then the story of retailers retaking control of the narrative (after realizing that changing the name entirely wouldn’t work), co-opting a negative moniker and aligning it with a positive connotation — that of retailers moving from the “red” to the “black” back when accounting ledgers were kept by hand and black indicated a profit (versus the red of a loss). This grew, especially at the end of the 20th Century, into a day of such high competition that retailers went from opening their doors at 6am the day after Thanksgiving to some opening at 7am on Thanksgiving. 2014 signaled the end of this trend as Thanksgiving weekend sales dropped 11% compared to the previous year.

All of this context gives us some insight into where Cyber Monday began to succeed. The well-marketed day perfectly rode the wave of online shopping and the upswell in mobile device usage that shifted purchasing behavior trends.

E-Commerce growth year-over-year in the United States. (Source: Statista)

Cyber Monday never had to fight a name originally coined by a metropolitan police department (as Black Friday did), nor did it have to contend with any of the logistical nightmares that Black Friday forged through around timing or when retailers would open). On the surface, it even seemed like the more socially-responsible option: Cyber Monday meant fewer people commuting and contributing to traffic congestion, and it also means that retail professionals don’t have to forego their Thanksgiving holidays by showing up at a big-box store before the pie is even served.

NRF’s marketing gamble paid off in 2017, when Cyber Monday sales beat Black Friday sales by $1.5 billion after competing neck-and-neck in 2016.

Quarterly share of e-commerce sales of total U.S. retail sales from 1st quarter 2010 to 3rd quarter 2018 (Source: Statista)

The Digital David

Following the recession of the early aughts, American Express launched Small Business Saturday in 2010 in order to encourage consumers to support their local shops and put money back into their communities. One year later, the Senate unanimously passed a resolution in support of the day, with officials from all 50 states participating. President Obama even made it an annual tradition to participate. Small Business Saturday in 2018 saw record high spends in the neighborhood of $17.8 billion, bringing overall Small Business Saturday totals to $103 billion since 2010.

It took less time for the backlash against Small Business Saturday to gain momentum. A 2013 piece by the New York Times revealed that small business owners weren’t on board with a major American corporation throwing its name behind support for shopping local or independent stores when, as one retailer noted, “every other day of the year, American Express just puts the squeeze on Main Street merchants.”

This squeeze comes in the form of transaction costs billed to merchants whenever a credit card is used (American Express’s fees are the highest of all credit card companies according to the Nilson Report). AmEx’s merchant agreements also signal a preference for the company over other forms of payment (including cash — and the debate surrounding this dichotomy is also a centerpiece of the 2018 shopping season conversation), and the company has come under fire for sheltering $8.5 billion in profits abroad as of 2013.

Finally, coming up behind this trio of shopping days is Giving Tuesday. Unlike Black Friday, Small Business Saturday, and Cyber Monday, this annual day of giving that takes place the first Tuesday after Thanksgiving came out of the nonprofit world, created in 2012 by the 92nd Street Y. While Giving Tuesday still has a ways to go with competing against even Small Business Saturday, Giving Tuesday 2018 totals (currently estimated at $380 million) represent a 26% increase over 2017 and kicked the holiday’s running total over $1 billion in 6 years.

These numbers don’t exist in silos: Giving Tuesday 2017 totals broke the $300 million mark, a 79% in growth year-over-year. Small Business Saturday numbers last year were, conversely, down 16% in 2017 compared to 2016. Between 2014 and 2018, Google searches for Giving Tuesday in the United States have nearly doubled, and this year the day saw advance coverage from the New York Times, Vox, Forbes, and CNN.

Cyber Monday Isn’t Going Anywhere

Cyber Monday took our minds off of challenges like traffic, pollution, and retail maelstroms (which in some cases have led to injuries, arrests, and even deaths — the website provides a running, albeit morbid, tally of these incidents). However, it seems we may have traded this peace of mind for now contending with the human cost of Amazon-style shipping practices. Earlier this October, the New York Times reported on the harsh conditions at one of the distribution centers run by XPO Logistics.

While not an Amazon distributor, stories of worker death and health issues that came with trying to keep up with the Joneses (or, in this case, Bezoses) and getting packages to consumers within mere hours of turnaround show the precedent that Amazon has set. The Times repackaged this story as an episode of its podcast, The Daily, which aptly ran on Cyber Monday. South Park got in its own digs with Amazon-style practices as well.

The Times reporting (as well as other reports by authors and journalists who have gone undercover at Amazon itself) shocked elected officials, who are now investigating XPO’s labor practices. On the consumer side, however, it’s less clear (or even likely) that such mistreatment of workers in the supply chain will halt demands for more convenient fulfillment options — especially given that a record was set for e-commerce just a month after the initial report. Indeed, Amazon is poised to eventually capture 50% of the retail market by the end of the year. 2018 Cyber Monday numbers will not be released until the close of Q4 for the giant, but initial reports from the company are boasting the “biggest day in Amazon history” and a high probability that the website pulled in close to $3.9 billion on Cyber Monday.

But Giving Tuesday is Going Somewhere

Among the incredible things about the unselfishness of Giving Tuesday, is that all of the “goods” were delivered instantly at the click of a button (or two). Donations through online platforms like Blackbaud, Classy, DonorBox, and Facebook (among others) all delivered money to the right nonprofits and the satisfaction of giving to the donors.

When done right, nonprofits are able to provide the same hit of dopamine as promised by shopping to donors, with the exchange of goods here being their dollars in exchange from your story of impact. The delivery of this doesn’t harm workers, and actually helps jobs in the social sector — which currently employs 10% of the U.S. — due to the unrestricted gifts common on the day.

Imagining the tipping point for Giving Tuesday is therefore not difficult: Trends have shown over the past 6 years that the average gift has managed to stay above $100 year after year. As awareness of the day increases, reaching more people year after year, we can predict that the total amount donated on the day will grow with this trendline. And that’s good news for Giving Tuesday’s competitive edge: The average order amount for Cyber Monday has traditionally hovered around $133, while Giving Tuesday Gifts had a mean gift size of $105. The scale we’re then challenged with is not how much, but how many.

When Price Anchoring Met Social Proof…

Perhaps the major factor in the growth around Giving Tuesday is the involvement of major brands and companies like the Bill and Melinda Gates Foundation (which matched $2 million in donations made via Facebook in 2017) and Facebook and PayPal (which joined forces to match the first $7 million raised on Facebook this year). As of Giving Tuesday 2017, Facebook also stopped charging a processing fee for donations, and as of November 2018 has raised over $1 billion on the platform.

Other companies may also follow suit in the coming years to offer similar matches and giving opportunities through Facebook and possibly off-platform as it benefits their corporate social responsibility narratives and has a clear win for nonprofits: Even if Facebook donations are limiting in terms of the remarketing data that organizations can collect, the platform is playing on its main currency of social proof towards a larger societal benefit rather than spreading #FakeNews.

This generosity from a company so maligned for its misuses of user data may be confusing on the surface. Recently reports by CNBC and The Wall Street Journal revealed that Facebook is going directly to banks to pull more financial information into messenger to build up data about its users. Connecting more user credit cards into their database fits directly inline with this strategy of aggregating user financial data. By pushing donations, they are also normalizing the idea of processing payments through the platform which may include other types of purchases in the future.

In the end, the spirit of the holidays is about giving and unselfish acts. After the delivery boxes have been landfilled and we’ve purchased every possible gift (28% of which will likely be returned), we start to remember the gifts that matter. Can we argue, in 2018, that trends will improve for Giving Tuesday as something to hurdle over Cyber Monday in the next decade? No.

But the combination of an origin story that comes out of the nonprofit world combined with the right signal boost from a major corporation may be the winning one for those wary of false profits.

Whole Whale

Whole Whale is a digital agency that leverages data and…

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