You’ve no doubt become familiar by now with the term “digital revolution.” It’s something that’s been dawning on us, slowly but surely, over the past few decades, and particularly in the past ten years with the advent of social media. How far has your nonprofit come? Far enough?
It’s hard to believe, but a mere ten years ago so few nonprofits had jumped on the digital bandwagon I began blogging about it. I even wrote monthly for a national social media blog, becoming their guest nonprofit expert. It makes me chuckle now, because use of technology is by no means my sweet spot. But I was just so troubled by the elephant in the room too few nonprofits were naming.
Today, most nonprofits have a digital strategy. Some are even going so far as to discontinue direct mail entirely. I don’t recommend this; still, it’s testimony to how far we’ve come in a short period.
NOTE: I find abandoning direct mail a bit extreme and precipitous. A classic “leaving money on the table” rookie mistake. Merely substituting an online for an offline channel ignores today’s reality. What’s that? It’s a multichannel world. Sure, it’s more work than in the past. Where you used to just have to communicate in one space, now you must show up in many. Yet there’s good news: layering your strategies can result in richer engagement than before, because you’re meeting folks where they are and reaching people you’d never have before reached. And donors cross channels! The lion’s share of philanthropy still comes from direct mail, but things are evolving. Online giving may be precipitated by offline fundraising strategies. Even if you engage in direct mail, you need to consider the convenience of your prospects and donors. What makes giving easy, convenient and likely for them? Simply sticking to online fundraising may narrow your chances for success. Did you know average email lifespan is 17 seconds vs. direct mail’s average of 17 days? Also, did you know 31% of offline-only first-time donors are retained for over a year, versus 25% of online-only first-time donors? So you’re going to want to hedge your bets and not just fundraise in one place.
Okay, back to the revolution.
Nothing accelerated the transformation to digital like the past year.
Is your digital adoption of a transformational nature? Has it fundamentally altered how you do business? We’re at a transformation tipping point, and transformation doesn’t move backwards.
Going digital is now an in-your-face proposition that can’t be ignored.
I’m about to share some data with you to demonstrate how online engagement and revenue grew in 2020. But first I want to share some broad perspective strategic thinking on the subject.
I’m a fan of digital innovator and evangelist Brian Solis, who wrote about the end of business as usual over a decade ago. At the start of this year, even before the pandemic hit, Solis wrote “digital transformation will start to become synonymous with business modernization and innovation.” He predicted competing for the customer of the future will become “mission-critical.”
TO THINK ABOUT: Do you think of competing for the donor of the future as mission critical? Do others within your organization feel this way? Or is your culture one where development is considered a somewhat distasteful “money-grubbing” operation – a “cost center” that takes away from mission-critical work? If this is the case, getting to where you need to be with digital fundraising (or any fundraising, for that matter) will be a challenging proposition. Which is why building a culture of philanthropy becomes a pre-condition to success. Siloes – programs, marketing and finance separated from fundraising – will drag you down.
How critical to your mission has digital become over the past year?
Clearly we’ve reached an inflection point, faster than even Solis might have thought possible just a short year ago. Facing the biggest disruption in living memory, we’re entering a “novel economy” in which the old playbooks no longer serve us well.
This disruption holds true just as much for nonprofits as other businesses and organizations. And fundraisers and marketers will be the ones to help re-engineer the “customer (aka donor)” experience. If you wish, think of this as “digital Darwinism” (a term favored by Solis) in which your nonprofit must evolve to survive in a rapidly changing world.
Of course you want to thrive, not just survive. And that’s why doing the bare minimum will no longer cut it. If you’ve been plodding along with digital innovation, this is the year you’re going to need to pick up the pace. This means fast tracking digital innovation by including it in your strategic plan and budgeting for the tools you’ll need to see your plans through to fruition.
NOTE: This probably means hiring people with digital skills, and investing in software. As you review the data below, you’ll see the investment is merited based on anticipated ROI. Digital innovation is even becoming important in major gift fundraising, which used to pretty much eschew this. If you’re interested in exploring this further, check out Creating Meaningful Connections Using Digital Technology.
2020: The year of digital acceleration transformation
Up until the moment the pandemic struck, business digitization efforts had moved slowly. Generally innovations happened only when absolutely necessary, maybe to fix something broken or increase productivity in an area of identified weakness. But digital transformation was in no way an organizational mandate. And as much as folks talked about “customer experience,” it remained a somewhat distant goal.
Nonprofits were similarly stagnant, with digital innovation getting pushed to the back burner. Partly because there was no pressing urgency.
Enter the novel coronavirus. Businesses of all stripes found they had to speed up their digital transformation plans, or else. Similarly, nonprofits found more and more people were interacting with them online. This is how folks find you, engage with you, and invest with you.
NOTE: You are not alone if you’re feeling the rapid pace of change. Beginning in March 2020, year-long timetables became compressed into months. McKinsey and Co. called this “the quickening,” in which we saw 10 years growth in three months.
Are you digitally ready for what the future holds?
The pandemic caught most businesses unawares. This can no longer be your excuse. The time to take stock of your “digital readiness” is now. You should consider it a pre-condition to doing effective marketing and fundraising from this day forward.
Look at what you did last year. What worked; what didn’t? Were their digital innovations you want to take into the future? Ideas you saw work elsewhere you’d like to emulate?
Solis and others argue this is not just about digital acceleration anymore. It’s about hitting a total “reset” button in how you’ve traditionally operated. If you’re worried about losing ground to more agile competitors you owe it to yourself and the community you serve to develop the systems and technology that will enable new opportunities.
TO DO: Specifically, you’ll want to:
Embed online strategies in all you do; you never know where your potential supporters hang out, so hedge your bets.
Test new approaches – diversify communication channels, forms, ideas.
Embed listening strategies – seek formal and informal feedback.
Humanize your conversations to see the experience from the customer/donor perspective.
Annual Benchmarks Study + Trending Online Behaviors
If you ever wondered how your digital fundraising results compare with other nonprofits in the world, wonder no more! The new M+R Annual Benchmarks Report is out! You can even benchmark your results against others operating within your sector, or others similar to you in size, making the data even more meaningful. Last year’s study included 220 nonprofits, including 55 in the UK. [BTW: You can sign up to have your organization’s data included in next year’s study; you’ll get written results, including your own!]
Online revenue grew by 32%.
This is extraordinary coming during a pandemic, presidential election year, and time of social upheaval. It would have been amazing even coming in an ordinary year! People were generous. Heartwarmingly so. They saw a need and wanted to help. In particular, the hunger and poverty sector saw 173% growth relative to 2019 numbers. Also of interest:
- Focus on racial justice: This was a priority for many organizations across sectors. The commitment was there. Organizations embracing this commitment did not raise more or less than others.
- Focus on electoral work: This did not appear to drown out philanthropic participation this year.
- Focus on Covid relief work: Online revenue was significantly higher for organizations engaged in this work, resulting in a 26% increase for monthly giving and a 41% increase for one-time giving. These organizations will want to prioritize retaining these donors in the coming year.
Most email metrics — including open rates, click-through rates, response rates, and page completion rates — went up in 2020.
While detractors have been predicting the death of email for some time, the data says otherwise. Specifically:
- Email list sizes grew 3%.
- Email volume increased by 17%, reversing a declining trend in recent years.
- For every 1,000 fundraising messages sent, nonprofits raised $78 — a 35% increase over 2019. The hunger and poverty sector saw a 243% increase.
- Open rates increased 9% to an average of 21%. Not surprisingly, donors were more responsive than non-donors (22% vs. 18%); click-through rates for fundraising messages were actually higher for prospect audiences (1.7% vs. 1.6%).
- Average response rates increased to 3.6% for advocacy email (0.5% increase) and 0.10% for fundraising email (41% increase) over the previous year.
- Unsubscribe rates decreased. M+R attributes this, in part, to better list hygiene (especially in the UK which has GRDP). As a general rule, unsubscribes average 8.8%; bounces average 7.2%.
- Landing page completion was 32% for donors, and just 8% for prospects. M+R attributes this to fact donors are more likely to have payment information stored online, making the donation process simpler. Also, donation pages may lack sufficient content or context to convert a prospect, while a donor arrives already convinced of the need to give. The landing page is critically important in closing gifts; anything you can do to decrease friction is a worthwhile endeavor.
Mobile engagement increased.
There was significant growth in both website access and messaging using mobile devices. M+R suggests a need to optimize mobile user experience because we see 9% year-over-year growth. You can’t give up on 50% of your audience. That’s like “lighting money on fire.”
- Half of all nonprofit website visitors used mobile devices. Even so, desktop users still accounted for the majority of transactions and revenue. The balance of traffic, transactions, and revenue continued to shift toward mobile users.
- Mobile audiences for bulk text messaging (similar to email or direct mail) grew by 26%. On average, nonprofits had 50 mobile subscribers for every 1000 email subscribers. Mobile lists are still much smaller than other mailing lists, but they grew faster than email (3% growth) in 2020. The click-through rate was 6% (vs. 1.7% for email).
- Mobile P2P messaging stayed steady. Recipients may have received more texts however, as more nonprofits used this type of messaging tool. Response rate was 9.8% (i.e., sending a return text message to the message sender). Opt out rates increased however. M+R thinks this may lead to some restrictions from carriers.
- There is a trend towards contactless mobile payments. Apple Pay, Google Pay, PayPal Express and other ways to make donating easier.
Revenue from online ticket sales dropped sharply.
- Ticket sales suffered a 58% decline (admission to something occurring regularly, not one-time events like Galas). Over the previous two years, online ticket sales had grown e at roughly 6%.
- Ticket sales declined as a percentage of total online revenue by 14% (from 34% to 20%).
Revenue from membership (with defined, tangible benefits) emails held strong.
- Revenue increased by 17%, accounting for 66% of all revenue for nonprofits with those membership programs. This compared with the previous year’s growth of 3%.
- Non-membership emails saw revenue increase by 110% — perhaps because donors made gifts instead of purchasing memberships.
Social media behavior varies by channel
Potential reach is enormous, but it begins with those audiences that directly follow your nonprofit on each platform. Also, unlike channels like email, SMS texting and direct mail, social media platforms directly control the reach of each piece of content through their proprietary algorithms. Half of all social traffic came from mobile users. However, desktop users were more likely to give. On average (but not true for all sectors):
- For every 1,000 email addresses, nonprofits had an average of 817 Facebook fans. Facebook posts had an average engagement scoreof 0.32%, a 21% decline over the previous year. Each organic Facebook post only reached 4% of a nonprofit page’s fans. Meanwhile, 29% of the audience reached by a given post was not already following the nonprofit. This means you must think about both audiences when crafting messages. Revenue specifically from Facebook Fundraisers, the built-in peer-to-peer fundraising tool, increased by 14% overall, with hunger and poverty nonprofits seeing a 946% increase in Fundraisers revenue. The average Facebook Fundraiser generated four gifts, with an average gift size of $34. Facebook Fundraisers accounted for 1.3% of all online revenue.
- For every 1,000 email addresses, nonprofits had an average of 291 Twitter followers. Twitter followers increased by 25%; posts had an average engagement rateof 1.8%.
- For every 1,000 email addresses, nonprofits had an average of 149 Instagram followers.
- For wildlife and animal welfare nonprofits, Instagram outstripped Twitter, and Facebook audiences were even larger than email list sizes. M+R hypothesizes these channels are excellent for cute animal photos.
Digital advertising increased by 33%.
While the overall mix favored fundraising ads, there were stark differences in strategy and results for nonprofits of different sizes. Some spending was focused on branding and awareness as well, though this was less the case for large organizations who are already well-known. On average:
- Charities spent 10 cents for every $1 raised. Most was spent on direct fundraising campaigns.
- Hunger and poverty organizations increased ad spending by 79%.
- Cultural organizations decreased their spending.
- Most spending was in December for year-end and Giving Tuesday. The next spike in spending was June, presumably related to fiscal year-end.
A Crisis is a Terrible Thing to Waste
So now you know.
No more flying blind.
You know what you need. You know what your customers/donors want.
Don’t let yourself slide.
To the extent you pivoted last year, kudos.
It’s up to you to maintain the changes.
And strategically accelerate the transformation.
Become an “undercover boss.”
Don’t limit your vision by failing to listen to your constituents.
The benchmarks data gives you some idea what donors think and feel, and how they’re behaving.
Your own survey research can do the same. And you can bring together focus groups of internal and external stakeholders to dig deeper.
This is the year to see, hear, touch, taste and speak transformation.
Think carefully about how to immerse yourself and your organization in the way things are being disrupted. If you’re unable to walk in the shoes of your supporters, it will be difficult to evolve in meaningful, necessary ways.
Let this be your “aha” moment that finally makes resting on your laurels and sticking with status quo modes of operation no longer tenable. The novel coronavirus, the political and social upheaval of the past year continuing into the present, and the increasingly digitally connected generation is driving change at unparalleled rates.
What are you going to do?
If You’re a Major Gift Fundraiser, You’ll Want to Know about This
The Veritus Group developed Creating Meaningful Connections Using Digital Technology both in response to the pandemic and due to changes they were seeing in the field of major gift fundraising even before Covid-19 hit. They’ve partnered with world-class storytellers who are experts in the field of digital fundraising to bring you this 3-module course. In the course, you’ll be equipped with the tools, resources, and systems needed to adjust your caseload to incorporate digital communication and effectively create meaningful connections for your donors in the digital age. Use my special CODE: Early10CA to save $100. And feel free to contact me with any questions. This is a great course.
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