Fundraising Metrics

Let ‘Em Know You Know?

Do your version appeals recognize a constituent’s prior involvement?

Past donors know they’ve given money. Volunteers know they’ve given time. Event attendees may think of themselves as having given both. To what extent should you recognize that involvement?

We recently had the opportunity to test this for a client that typically mails appeals to both active donors and non-donors (to help defray the cost of acquisition).

Among the active donors, a small group of really loyal constituents – major and mid-level donors – represent about 6% of the donor base but typically account for 40% to 50% of the revenue generated by each mailing. 

Any increase in response from this key segment could make a significant difference in the overall performance of the mailing.

We tested a personalized letter in a closed-face envelope on an earlier mailing; the increase in revenue more than offset higher production costs. (We had tested deeper in active donors and found this wasn’t the case among lower dollar supporters.)

Now we wondered if versioning letter copy to acknowledge these donors’ past support would further increase response.

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The results were mixed in terms of response rates: up slightly among major donors and down slightly among mid-level donors. However, our a/b segments were small and the overall variance wasn't enough to be statistically significant. 

There were nearly four times more mid-level than major donors, which skews the overall response rate. However, major donors on average give nearly three times as much.

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In both major and mid-level segments, donors receiving the letter acknowledging past support tended to give more. The higher average gift amplified the higher response rate among major donors and offset the lower rate among the mid-level group.

Overall, the increase in return-per-piece-mailed would have more than justified the additional production expense of versioning the letter. As it was, since we were already personalizing the salutation there was actually very little increase involved.

So, when and how should you version? 

When it pays for itself, is the simple answer. I'd typically expect a higher return on a versioned letter; but you won't know until you measure it. 

What are the differences that matter to your donors?

Learn from the Leaders!

I was talking with a young colleague – a paid search specialist – about some of the incredible learning opportunities available with clients who could afford testing.

“But how can you take those learnings and put them to work for smaller clients,” I challenged.

I was reminded of this as I reviewed the just-released M+R Benchmark Report. This is “the largest, most comprehensive dataset” yet for what I believe has become the industry-leading benchmark on nonprofit online fundraising (154 organizations, nearly 5 billion email messages, more than 500 billion web visits and nearly 12 million donations).

Constituent lists continue to grow (email up 11%, social even more). Organizations sent more emails per subscriber per month (up 11%) and spent more on digital advertising (up 24%). Total online revenue grew by 24%.

Just one nagging little negative: virtually every individual email metric declined. 

There is some variance, by sector and by size of organization. I’m not going to try to recap all of that here; I want to encourage you again to download the study! (There are also a number of helpful tips, from assessing engagement effectiveness of social media to testing the download speed of your home page.)

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But back to this learnings concept ….

I found the section on digital advertising particularly interesting. On average, small organizations (email list of less than 100,000) spent 3¢ per dollar of revenue in this arena, medium organizations (100,000 to 500,000) spent 5¢ per dollar and large organizations (500,000-plus) spent 8¢ per dollar of revenue.

Large organizations focused virtually all of their spending on direct fundraising (68%) or lead generation (26%). Small organizations, by contrast, spent more than a third of their resources on Awareness/Education. While direct fundraising, at $40 to $200 per new donor, may be a bit too costly for smaller organizations, it would seem that lead generation, at $1.46 per new name, could be more realistic.

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Cost is likely a driver in channel choice as well. Social media accounted for more than half (55%) of the total spend for small organizations and far less (35%) for large. The comparative cost per gift reported is $41 for social, $65 for search and $204 for display.

This is an area that will continue to grow. This year, small organizations nearly doubled the amount they invested in digital advertising and large organizations increased their spend by 70%, while medium organizations held fairly steady (3%).

(If you’d like some additional perspective on what’s happening in nonprofit digital advertising, check out our current podcast featuring VeraData’s EVP Judah Fontz.)

There’s a lot of material here; we may use a future blog post to come back and address more, like those declining email metrics, for example. In the meantime, one more reminder: download your copy today!

Setting Strategies by the Numbers

It’s hard to get 250+ nonprofit professionals (aka Don Quixote do-gooders) in one place and NOT be overwhelmed by the positive vibe. 

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Walking into the opening keynote address at the AFP Mid-America Conference on Fundraising, the energy was palpable. Attendees at the few tables with seats still open were eagerly welcoming late-comers. And despite the fact the speaker went 10 minutes over the allotted time, no one left early. 

People were there to learn … and it’s virtually impossible not to get caught up in that. In fact, that energy carried over into the rest of the afternoon.

So, you can imagine my excitement as I walked into the session that had grabbed my attention to begin with – “How to Benchmark for Successful Fundraising.”

First the great news: the presenter introduced a FREE resource, a downloadable Excel-based Fundraising Fitness Test, “that allows nonprofits to measure and evaluate their fundraising programs against a set of over 100 performance indicators.”

The Fundraising Effectiveness Project was established in 2006 by the Association of Fundraising Professionals (AFP) and the Center on Nonprofits and Philanthropy at the Urban Institute to conduct research on fundraising effectiveness and help nonprofit organizations increase their fundraising results at a faster pace. 

Tools like this can help make that happen!

Unfortunately, the session never really capitalized on the potential this tool offers. The speaker spent too much time talking about how to set the tool up and too little talking about why. She spoke of using the information only in very broad terms: average retention rates and very general strategies to improve retention.

I think the key to success – and the beauty of this tool – lies in looking more closely. 

For example, while retention may average 45%, repeat donors likely return at a much higher rate (e.g., 70%) and first-time donors at a much lower rate (e.g., 25%). This is much more actionable information. Are there strategies you can put in place to try and increase first-time retention? A hand-addressed, hand-signed Thank You card, for example, or a call from a board member or volunteer?

Another fascinating perspective is Donor Gain/Loss, i.e., an accounting of donors who increase or decrease their giving. Again, this is actionable information. For several clients we have implemented a high touch (e.g., hand-signed outreach) to clients who are “behind” in their support. The parameters can vary; in one case, for example, we check giving at nine months into the year and target supporters who have given less than 50% of the prior year’s giving.

Admittedly, I'm a numbers geek and may get more excited than the average individual. But I encourage you to download the Fitness Test and see if it uncovers any surprises within your donor base.

I continued to feed my geekiness on day two, especially at the session entitled "Using Data Visualization in Fundraising Collateral." People process visual cues faster and are more likely to remember the key point contained. This is especially important when presenting data.

The problem with spreadsheets is that most people's eyes glaze over before they've gotten past the first couple cells. For example, the donor gain/loss data hidden away in the columns above could presented much more quickly and clearly as a graph. (You'll notice the sample here, while not using the same data, actually presents a three-year perspective instead of two. More info. And even faster!)

Of course, graphs and charts are only one approach, but they have helped pave the way for all kinds of high-impact infographics. The presenter was kind enough to recommend some low- or no-cost resources available, such as Canva, Piktochart, Easel.ly, or Venngage.

After all, it's not enough to just be able to understand what the numbers say. It's a whole lot more meaningful if you're able to tell that story in an easily understandable and believable way!

Another great conference, AFP Mid-America. Thanks for sharing!