Online 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!)

Tidbits from BBCon 2015

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I just got back from BBCon, Blackbaud's annual conference for nonprofit fundraisers. I've been attending these since 2008, back when it was the Convio Summit, a fast-growing user group of new technology advocates. 

It was a great conference. Sure, there were a couple sessions that didn't appear to be what I expected; but in both cases I found a ready replacement from the jam-packed agenda.

There's no way to do justice to all the specifics. But some of the over-arching themes that struck me ...

1. Not all supporters are created equal.

There has been growing awareness that new donors aren't the same as more loyal supporters. Organizations that are doing it right are taking this much further. Major donors, sure. Mid-level donors, increasingly. And the leaders are identifying transitional donors as well - i.e., transitioning into or out of mid-level and major (velocity, the term being coined for that, and Target Analytics, a division of Blackbaud, has some great success stories about identifying those constituents). 

More organizations are focusing on sustainer programs. Higher frequency not only indicates higher revenue, but also greater loyalty (higher retention). More are also responding to generational differences, recognizing for example, that while millennials may not represent immediate revenue, there is value in building loyalty now. More are considering ethnicity as well. (And, as one presenter said, "The fundamentals are the fundamentals.")

2. No one approach works for everyone.

Awareness of the differences among supporters only matters if you're willing to respond to their uniqueness. This may take a little effort and creativity, both in message and format. It should go without saying that it must also be genuinely reflective of the organization. 

One case focused on The Children's Center in Detroit, with specific emphasis on how they targeted their year end campaign to include millennials. A contest to post photos of coasters on social media. Pop-up dinners. Posters in coffee shops and other hangouts. Not high cost items. And not high revenue goals – in fact the close was not an ask for money, but an ask to Take the Tour. The campaign also included billboards, direct mail to current supporters, and a less-than-successful text-to-give component.

3. Online fundraising is growing up.

I don't just mean more gray hair in the audience (although that was the case!) 

For perspective, in 2008 the newly unveiled benchmark report covered 30 clients across six vertical segments. This year's report reflects activities of 685 clients across 18 verticals. (But more about those comparisons in the next week or so, when the full current report is released.)

What may have been geekdom then is more likely mainstream now. Organizations aren't considering whether to try this new channel, but how to maximize it as a part of a multi-channel approach. How to be more strategic. It's no longer the IT department and programmers setting the pace, but the development department and relationship managers. 

And that reflects well for the future, I think. For all of us in fundraising. Here's to our continued growth!