Online Giving Slows After Years of Growth
Balance Offline and Online Strategies to Achieve Better Results
Here at Abeja, we keep up on the latest data on what’s working in fundraising.
We do it because we know you don’t have the time to dig into all the reports. You’ve got a nonprofit to run! (Plus, we kind of geek out over the data.)
Top digital fundraising trends
Last week, I attended the release of the M+R 2018 Benchmarks Study. This year’s study contains online giving performance from 135 nonprofits of all shapes and sizes.
It’s important to keep in mind that online fundraising makes up less than 10 percent of total fundraising revenue. Online giving may one day surpass offline channels like donation letters and events, but it just isn’t there yet.
Here are the key headlines from the report:
Overall online revenue grew by just 1 percent in 2018, after years of double-digit growth. This is certainly disappointing, especially for smaller organizations that tend to rely on digital tactics a bit more than larger groups.
However, there is a silver lining in the overall data. Recurring monthly gift revenue increased by 17 percent, with the average gift at $23. This appears to indicate that people are doing a better job of donor stewardship, and moving their supporters from first-time gifts to multiple gifts.
Email revenue decreased by 8 percent, though it still makes up 13 percent of all online giving. This continues a trend in recent years in which email is providing very little bang for the buck.
For comparison, the response rate to email now stands at 0.06 percent. Compare that to sending donor letters to a house file, which has a response rate of 5.1 percent. Big difference.
But hopefully, your nonprofit is integrating the two tactics to achieve a multiplier effect. Mobile Cause estimates a combined email and donor letter will earn at least a 27 percent response rate. Higher if you add an interesting landing page into the mix.
Friendraising via Facebook is trending up, especially around Giving Tuesday. The average number of gifts per fundraiser was $31 and the average number of gifts: 7.4.
If your base is motivated to fundraise on your behalf and you have high engagement metrics on Facebook, this can be a winning strategy. But those are two important dependencies to consider.
And the nonprofits that are winning Giving Tuesday plan their campaigns for weeks, even months, ahead.
Text messaging lists are small vs. email lists, but growing. Unfortunately, the report contained no revenue or response rate metrics. Right now, average ROI for text fundraising is a black box.
I see companies that specialize in text fundraising stressing immediacy, engagement and individual case studies. But as we all know, vanity metrics do not pay salaries and fund your life-changing programs.
However, text could be very useful as one of several tactics to use around events. And certainly, there are documented cases that text-to-give works well in humanitarian crises.
Search engine advertising continues to offer the only immediate positive return on ad spend. However, it’s likely that nonprofits are investing (144 percent more YOY) in online advertising as a longer-term play.
Social media and display ads can play a supporting role in keeping your nonprofit top of mind for donors. Then you might follow up with other campaign tactics like donation request letters and email. In that scenario, a donor might see an ad, not click on it, but then later visit your website and make a donation.
In short, it’s complicated to track and attribute ad spend to every dollar you raise online.
Useful content, but missing context
The M+R 2018 Benchmarks Study breaks out its data by nonprofit sector and online revenue size, so it’s worth seeing if your sector beat the norm.
For example, health nonprofit supporters are crushing Facebook fundraisers, with nearly $30 raised for every $100 raised in other channels. And Rights groups saw monthly giving increase by 32%.
If you have time, you can dig further into the numbers. There’s also a cool tool in the study that allows you to input and compare your own performance data to the benchmarks.
What the report doesn’t cover is why these trends are occurring. Maybe it’s the tax law changes. Or fewer natural disasters captured people’s attention in 2018. And it could be that folks are turning a corner in their thinking after the 2016 election.
Balance your fundraising plan
Only time will tell. What this data can do is help you have more open and informed conversations about how your nonprofit will spend its resources, both donor dollars and time.
If you have short-term revenue goals, it may be more strategic to allocate a larger portion of your resources to offline channels like acquisition mailings, donation letters and phone calls. Spend time segmenting and personalizing your communications more, so that donors feel you are talking directly to them.
If your organization has a longer-term focus, you may be able to invest more heavily in online strategies – with the hope that they will pay off over time. But instead of rushing into every channel, consider testing each one to see how your donor base responds compared to these benchmarks. After all, no nonprofit is average.
What should be clear is that it’s important to meet donors where they are – that usually means a strategy that balances both offline and online channels.
Minimize fundraising fads
The last thing these benchmarks can do is help keep your organization focused on what works. We’ve all had a board member or volunteer come to us with the next best fundraising idea e.g. Amazon Smile! Alexa Donations! Crowdfunding!
And who among us hasn’t been in a conference session where someone, usually new to fundraising, advocates for going 100 percent digital?
A little data can ground these conversations in reality. It can help us respond (respectfully) with, “Here’s what the data suggests on that. Given these numbers, how should we proceed? Perhaps a small test?”
You’re not going to win all of these battles, but at least you’ll have a little more information on what good looks like when it comes to the online giving niche.
Share your thoughts below. Why do you think digital has slowed? And what are you using instead?
Laura Ingalls is CEO of Abeja Solutions and co-creator of Beezable, a tool that makes direct mail as easy as sending an email. She’s produced for CNN, served as a humanitarian spokesperson in Iraq and led award-winning nonprofit and corporate communications teams. Read more from Laura.