Poor Year-End Giving and Email Volume

January 16, 2019      Kevin Schulman, Founder, DonorVoice and DVCanvass

Year-end giving was down (on average and especially online).  M+R has said it; PMX has said it; you may have seen it yourself.

The 2018 year-end giving macroenvironment cocktail was something like:

  • Government shutdown +
  • Tax bill shifting donations from 2019 to 2018 +
  • Democratic House balancing out some policies +
  • Continued mail deliverability challenges +
  • Undifferentiated messaging catching up with us +
  • Economic insecurity +
  • Donors giving at GivingTuesday who were previously year-end givers +
  • Sector-wide failure to bring new people into giving

Take all of that, mix in a cocktail shaker, and serve over ice with a sprig of mint.  We’ll know more when we can dig into significant cross-sector data, but it’s likely some ratio of these.

One thing that no one is hypothesizing (that I have seen, at least) is that we didn’t email enough.  As I’ve mentioned, I signed up for the top 100 US nonprofit email lists under the pseudonym of Anita Sue Donim.  In 2018, I received 71 emails on December 31.  I received 57 emails from those same organizations on December 31, 2017.  That’s a 25 percent increase.

(Why did I look organization to organization?  Because I look at this account maybe twice a year and click-through on nothing.  Every indication to these organizations is that this email account no longer cares about them – sending to this email address probably is hurting deliverability.  So the smart organizations no longer send to it.)

Of the 34 organizations on the list, 15 of them increased the numbers of emails they sent on December 31st, largely of the Mad Libs variety described Monday.  Only four decreased email to this chronic non-responder (which is what you can do if you don’t want to totally release these folks, but know that most aren’t engaged.)

So, revenues declined as the number of emails per person increased.  Not what some would have predicted.  In fact, we had a bit of the debate here, pushing back against the argument that “We can increase retention just by asking more and more and more.”  Year-end data tends to indicate that more doesn’t lead inevitably to better.

But, you might say, these were extraordinary circumstances because of the year-end cocktail described above.

Unfortunately, that is not the case.  First, it wasn’t just end of year – this year had consistently low retention.

More than that, researchers find that reminder communications can decrease response rate.  To be clear, they find that a reminder email gets about two-thirds more revenue.  But they also find that the annoyance factor that leads to fewer future donations cuts the value of these additional emails by 90%.  They also find that the additional unsubscribes that come from annoyance plus additional opportunities to unsubscribe take the return into negative territory. 

To summarize:

The long-term impact of a reminder email is negative.

Time and research will tell if we are facing something temporary or systemic; my money is on a little of both.  But volume isn’t the answer to what may ail us.  Quality – depth, customization, technique, and basis in a deep understanding of why donors give – will be the way out, not quantity.

Nick

8 responses to “Poor Year-End Giving and Email Volume”

  1. Michael J. Rosen says:
    January 16, 2019 at 2:41 am

    Nick, thank you for addressing this issue. My own recent blog post (https://wp.me/p1h0KY-15N) also addresses the subject of year-end appeals, though primarily in a qualitative way from the donor’s perspective. Your post brings data to the table while making a similar point: Charities are sending a lot of garbage appeals that alienate donors and negatively affect charitable giving.

    • Nick Ellinger, VP of Marketing Strategy, DonorVoice says:
      January 16, 2019 at 11:25 am

      Thanks, Michael. It’s a good post I’d recommend to readers here…

  2. Harry Lynch says:
    January 16, 2019 at 10:54 am

    Thanks Nick. I think that your readers, many of whom saw the bottom fall out from under them in December, will be extraordinarily grateful for this verification and these insights. I’d knock government shutdown way down your list of bullets (I think it was way too early to have had major impact) but the rest of the list is right on and I think pretty much in the right order. Your case that reminder emails hurt long term is certainly striking and I’m sure will be hard to swallow for many in our industry since the near-term boost from these is large and predictable. Anyway, unless the tax laws revert back to the previous iteration I predict with a fairly high degree of confidence that we are all in for a volatile ride in coming Decembers.

    • Nick Ellinger, VP of Marketing Strategy, DonorVoice says:
      January 16, 2019 at 11:33 am

      I’m worried that volatile may be a better-case scenario. That is, what if this level of result is the new normal? When we dig into the data, it may be that the reasons for the downturn are systemic rather than specific to this year. And, since those on a calendar-year budget did their budgets back when temperatures were much higher than they are now (in the Northern Hemisphere…), there’s a double-whammy: you did your 2019 budget based on what you thought you’d achieve in 2018. When you don’t achieve that, you are also set up for failure in 2019.

      A note from Tara Ingram, National Director of Direct Response at Boys and Girls Club of America (this was a LinkedIn comment that was so relevant I wanted to share; Tara, hope you are OK with me reposting):

      “We didn’t use “end of year reminder” or any “tax benefit” language and our digital channel efforts were up 25% YOY but missed goal – on one hand it’s good not to be an outlier in the industry, that everyone experienced some kind of downturn. On the other hand, being the outlier is an easier thing to solve rather than the entire industry needing to figure out a new approach to make up revenue to compensate for underperformance in the most fruitful time of the year.”

      I think most reading this would have been pleased as punch to be up 25% year-over-year, so congrats, Tara — hopefully this is the fruits of zagging as others zig. But the challenge of an industry-wide change (even if only at year-end) is a significant one. We have nine months to figure out what happened and how to fix. Looking forward to the discussions!

  3. Gregory Warner says:
    January 16, 2019 at 12:39 pm

    I think this article might help support your message Nick. https://imarketsmart.com/3-simple-steps-to-break-your-transactional-spray-and-pray-fundraising-addiction/

Ask A Behavioral Scientist

    Behavioral Science Q & A

    The Agitator Tool Box

    Ideas, applications, tools, processes, and case studies of break-through solutions in fundraising, including: