Digital Fundraising

Raising the Bar

One of the industry’s most comprehensive overviews of online fundraising came out this week: Benchmark X from M+R in partnership with the Nonprofit Technology Network (NTEN).

This is the 10th annual report on online activities and results of participating NTEN members. For this year’s report, 105 organizations across eight sectors voluntarily submitted information about their 2015 activities. (Different organizations participate each year so it’s not accurate to make direct annual comparisons.)

There’s a wealth of information here. As a development director, you owe it to yourself to download it and keep it as a reference against which to check your own organization’s performance. I won’t try to reiterate all the detail here.

One of the new features of the study is a look specifically at the top 25 participating organizations, i.e, those with the largest year-over-year growth in total dollars raised online. The study’s authors note the difference can’t be attributed to a single factor; “These leaders are for the most part doing just a little bit better in a lot of different places.”

I was struck by three broad areas that warrant attention.

1) You need a vibrant and engaged audience.

On average, email list size was up 14%. List churn–unsubscribes (6.2%) and hard bounces (5.6%)-was down slightly, and still represent less than the average increase. Almost one-fourth of the average file is inactive. Contacting this segment less not only keeps unsubscribes down, but helps boost other key metrics (open, click-through and conversion rates).

2) You need a well-balanced contact strategy.

The top 25 organizations tended to send more fundraising messages (27 appeals per subscriber, compared to 16 for other organizations) and saw a much higher growth in email revenue (up 37%, more than twice the increase for all other groups).

But if you read the entire study, it’s abundantly clear that it’s not just a matter of increasing the number of “asks.”

Nearly 2/3 of the organizations have a welcome strategy (about 1/3 a single message, about half three messages, a few five or more). The average subscriber receives almost 50 messages per year (19 fundraising, 12 advocacy, 9 newsletter and 9 other).

In addition, for every 1,000 email subscribers, the average organization has 355 Facebook fans, 132 Twitter followers, and 19 Instagram followers. Organizations posted to Facebook an average of 1.3 times per day (each post reaches 10% of fans) and tweeted an average of 3.8 times per day (with each tweet averaging a 1.6% engagement rate).

3) You need to “keep your eye on the prize.”

Yes, you’re building understanding of your mission. You’re engaging and informing supporters. You’re raising awareness. You’re also raising money to allow you to continue your good works.

Overall, online revenue was up 19%. Email revenue was up 25% ($44 per 1,000 fundraising emails delivered). The number of gifts was up up 21% with average gift down only 1%. Monthly giving, which now accounts for 17% of all online revenue was up 24%; one time revenue up 18%.

More names plus more messaging means more fundraising? 

Digital advertising also helped contribute, although its role is not yet clear. On average, nonprofits invested 4¢ in digital outreach for every $1 of online revenue. Lead generation and donor conversion accounted for about 2/3 of that spending; paid search about 1/4. The top performers tended to invest more heavily (12¢ per $1 raised compared to 2¢ for all other groups).

Bottom line - there are a lot of variables. And, as leading organizations increase their effectiveness with any (or all!) of these, it raises the bar for everyone else.

Here’s to our continuing improvement! (And thank you, M+R and NTEN, for helping move the industry forward!)