Nonprofit Online Marketing Benchmarks and Best Practices

On Monday, fundraising technology provider Convio released its 2011 Online Nonprofit Benchmark Study. FundRaising Success spoke with Dennis McCarthy, vice president of strategy and business practice at Convio, and consultant Andy Prince about the key findings from the study and what they mean for fundraisers.

Key findings
• Online is the fastest-growing fundraising channel for nonprofits. In 2010, Convio’s clients raised more than $1.3 billion online, up 40 percent from 2009.

• The median growth rate in online giving was 20 percent. The median growth rate was 14 percent in 2009. Overall, 79 percent of organizations raised more in 2010 than 2009, while 21 percent saw a decline in online fundraising. All but three verticals (association and membership, public broadcasting stations, and team events) had a growth rate greater than 10 percent.

• Online giving is growing fastest for small organizations. Organizations with fewer than 10,000 e-mail addresses saw a 26 percent increase in online giving.

“We look at Gen X, Gen Y, even to an extent boomer — they want to make sure their money has an impact. They want to make sure they can see where it’s going and what’s going on,” McCarthy says. "If I give to a large NGO, where does my money really go? That money gets spent well — those are good organizations. But one of the biggest verticals that took off online is food banks … because a food bank is in my own town so I can see where that money is having an impact.”

Further, it’s easier for small organizations to market online.

“If you’re a very small nonprofit with maybe only a couple thousand supporters, it’s a whole lot easier to send out an e-mail campaign than it is to push out 2,000 letters,” McCarthy says. “So the scale really works in favor of a small organization for online media than it [does] for a large organization that can just as easily push out 200,000 pieces of mail.”

• An increase in gift count drove fundraising gains. Of organizations that grew fundraising in 2010, 88 percent saw an increase in the number of gifts.

• Median donation size increased from $83.44 in 2009 to $91.94 in 2010.

• Online legislative advocate counts grew 20 percent.

• Advocacy continues to influence online donations. In 2010, 6.42 percent of advocates on file were also donors, compared to 5.97 percent in 2009.

“We saw a real growth in advocacy. People who are advocates are much more likely to be donors,” McCarthy says.

• E-mail files continued to grow strongly. The median total e-mail file grew 22 percent to 48,700 constituents.

“People still engage with e-mail. For years people would say, ‘Direct mail is dead. Nobody reads direct mail. They just read the P.S.’ But people continue to give to direct mail. E-mail that’s relevant and engaging works for people,” McCarthy says.

• Web traffic growth continued for most, but at a slower rate. Fifty-five percent of organizations grew their website traffic from 2009 to 2010. Web traffic growth in 2010 was 2 percent, the second consecutive year this growth rate has been in the single digits.

• Website registration rates and open rates continue to decline. The rate at which organizations converted website visitors to their e-mail files in 2010 was 2 percent, a decrease from 2.2 percent in 2009. Open rates for fundraising appeals were down from 18.5 percent in 2009 to 17.6 percent in 2010, and newsletter open rates declined from 20.4 percent in 2009 to 19.2 percent in 2010.

So even as online giving grows, open rates and registration are slowing.

“I’ve been working with nonprofits for over 25 years,” McCarthy says. “We’ve seen that whenever a new channel becomes successful, what happens is not-for-profits tend to populate the calendar with lots of mail or lots of telemarketing. In this case, we continue to see more e-mail being pushed, and I think a lot of it is undifferentiated, isn’t as relevant as it could be, and to that point even further, maybe not as segmented as it could be. So I think people just aren’t as attuned to it as they used to be.

“If the content’s relevant, people will go to it. If it’s just, ‘let me take my direct mail and version it and push it out,’ I don’t think that’s going to be particularly engaging," he adds. "And you’re going to continue to see declining and very small response rates."

• Fundraising appeal effectiveness increased in 2010. Clickthrough rates improved to 1.76 percent in 2010 from 1.72 percent in 2009, and response rates were 0.16 percent — up from 0.15 percent in 2009 — helping offset the continuing decline in overall e-mail open rates.

• Haiti relief played a strong role in growing aggregate online fundraising.

Another key, according to Prince, is multichannel integration.

“Interaction with constituents is becoming profoundly multichannel,” he says. “It’s not just direct mail. It’s not just e-mail. It’s not just social media. It’s a combination of all of them. … When we did the year-end study last year, there was some data that showed as people engaged online, they tended to give more across all the channels. So the folks who engaged online would actually write a check to direct mail, donate online, engage via social media. So engaging the constituent through multiple channels is really having an effect in terms of donations as well.”

“To touch on Andy’s point, we oftentimes see that people will get the mail and then go online to fulfill the gift, much the way that we do with catalogs,” McCarthy adds. “In fact, I got a mailing yesterday from Soap.com, where I can order my detergent online and they’ll deliver it to my house. I would have never thought to go to Soap.com if they hadn’t sent me the direct-mail piece. So we’ve entered into an inherently multichannel world, where there are lots of connection points for our relationships with the charities that we care about.”

Best practices
Given the findings and the importance of online giving, McCarthy and Prince provide a few best practices for fundraisers:

• Always collect e-mail addresses whenever possible.
• Always try to collect what donors’ interests are.
• Think about segmentation online. “It’s a very old best practice in direct response,” McCarthy says. “So we’re providing good, relevant messaging to supporters.”
• Have a good call to action. “If we need them to do something, tell them,” McCarthy says. “That’s what the Christian ministry vertical teaches us coming out of the study, which is when they found a good reason to call to action, their donors were very much engaged in that fashion. We know that makes for a stronger, stickier relationship with those donors if they’re engaged in multiple points.”
• Be engaged in social media. “Nonprofits need to at least be engaged on the social-media front,” Prince says. “The thing that they need to be careful of is not trying to do too much too quickly. So it’s OK to get a Twitter account or get a Facebook page and begin listening to the conversations that are going on versus trying to be the end-all, be-all right away, and kind of learn as you go and grow. But at least be engaged, at least get out there. Get a Twitter account. Listen to the conversations. Follow some people that you think might be influencers. Have some sense of engagement before you decide you’re going to spend a ton of time and resources building out a social-media strategy. At least listen to the conversations first.”