Tuesday, March 15, 2011

How Much Money Should You Be Raising Online?



One of the key questions, I get from nonprofits is, "How much money should we be raising online?"  It’s a good question and hard to answer, especially if your online fundraising program is new and you have little data.  Still you don't need a crystal ball to steer you in the right direction. Here is a resource that can help.

Today, Convio released Convio Online Marketing Benchmark Index Study. This annual report analyzes the online fundraising performance of approximately 600 nonprofits that used the Convio platform in 2010.  A key strength of this study is that it provides aggregate benchmarks for fundraising performance and benchmarks for specific industry segments or verticals, such as Environment and Wildlife and Animal Welfare.  The study also provides data for organizations based on size of email file.  In short, Convio has sliced and diced the data to make it easier for leaders (like you!) to find the appropriate benchmark for your online programs.

Key Findings:
  1. Online is the fastest growing fundraising channel for nonprofits!  In 2010, Convio clients raised $1.3 billion online - an increase of 40% over 2009.
  2. Online giving is growing fastest for small organizations.  This is an interesting finding.  According to the report, organizations with less than 10,000 email addresses grew online giving by 26% vs. a median growth rate of 20% for all nonprofits.
  3. The median donation across all verticals increased from $83.44 to $91.94 in 2010.
  4. Email files continue to grow and email continues to be the key driver of online fundraising for nonprofits. The median total email file grew 22% to 48,700 constituents.
  5. Advocacy supports fundraising. In 2010, 6.42% of advocates were also donors.  This compares to 5.97% in 2009.
  6. Web traffic grew slightly but website to email sign-up conversions decreased to 2%.  We have to do something about these LOW conversion rates.
  7. Email open rates for fundraising appeals fell slightly to 17.67% from 18.55% in 2009.
  8. Email click through rates for fundraising appeals rose slightly to 1.76% from 1.72% in 2009.
  9. Response rates for fundraising appeals remained steady at .16%.  This means that if you send an email to 10,000 people 16 will donate.  Yikes!
OK, what do all these numbers mean to you?

Good grief, if you’re not online.  Get online today!   This means building a website first not launching a fan page on Facebook.  Note: Online fundraising grew most for the smallest organizations (26%).  Clearly the online channel is an important fundraising tool for ALL nonprofits.

Grow your email file organically.  Do this by optimizing your website so that you can easily convert website browsers into registered users of your site.  Tactics such as Search Engine Optimization and use of social media can drive more traffic to your site.  Also, be sure to offer compelling content about your cause so that prospective donors SEE THE VALUE in giving you their email address and engaging with you online.  With website to email file conversion rates at 2%, this is clearly an area for growth. 

Go beyond organic growth and invest in paid acquisition to build your email file.  Consider tactics like Google Ad Words, Facebook Ads, and Lead-Acquisition through companies like mine - Care2.  And, remember to track the performance of your new “leads” so that you can determine the cost and value of different tactics and optimize your program accordingly.

Don’t neglect your file.  Use segmentation strategies to ensure that you know what content donors and prospective donors want and respond in kind.  For example, if a new prospect joins your file via a Google ads word campaign to “Save the Turtles,” continue to send this prospect additional content about your turtle-recovery program before introducing them to other aspects of your mission.

Invest in online acquisition.  As mentioned above, managing your online program will require you to deal with email churn.  Consider replacing hard bounces by doing an email update, i.e. working with a third-party vendor who can match your file and find new email addresses for your constituents.  In addition, budget for ongoing acquisition.  If you don’t take care of and continue to grow your email file you will significantly lower your chances of raising more money year over year.

Last, but certainly not least, focus on creating compelling content.  I know you’re tired of hearing it but content is QUEEN!  Without smart, creative, clear and compelling content you’ll never be able to attract, retain or convert your donors online or offline.

To find out how your online fundraising program compares to the benchmarks, download the full study today.

Cheers!
Jocelyn

55 comments:

Frédéric Bardeau said...

Great article!

I'am managing a communications agency entirely dedicated to NGOs et not for profit organizations en France and we have many difficulties to convince that online fundraising is important and needs to be invested

Are you OK if I translate your article in French en post it on our blog with a mention / link to your website?

Thanks in advance for your answer

Best regards

Frederic Bardeau

Jeff Howard said...

Encase anyone is looking for a free donation tool that integrates with Wordpress our Donate Plugin allows you to create unlimited donation campaigns, capture donor information in WordPress, export information to excel and gives a donation thermometer for each campaign! The Donate Plugin integrates smoothly with WordPress and uses PayPal IPN to securely collect online payments.

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Here is the link to the comment above...http://www.nonprofitcms.org/2010/12/wordpress-donate-plugin/

Steve said...

That was interesting to hear about the importance of online fundraising.

Ryan said...

Wonderful post! I'm involved in non profit organization.Generate revenue for your organization through passive sources, including rents, royalties, investments, or interest payments. If your organization is a 501(c) 3--a tax-exempt organization-- you will need to understand any government restrictions on this type of revenue. However, any additional funding for the organization can add to the total amount of your personal profit once you have addressed the mission of the nonprofit. Good day!!

Peter Pereira said...

Indeed a great post. There alot of good digital marketing channels at the moment to reach to the right aundiences to raise money online. Email marketing is definitly a cheap one and it does do the job :)

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