Yesterday, on the perfect date, M+R published its 2019 online benchmarking data; it’s well worth a read.  Some of the data that jumped out at us:

Online giving was close to flat, only up 1%.  While this fits with the general “where am I going and why am I in this handbasket?” concerns about overall giving, there’s a better explanation for digital than for other means: online was exhausted from its 23% increase last year.  The one percent increase this year sounds much better when you say “online grew an average of 12% per year over the past two years.”

Email volume is not a solution. Last year, some argued that email volume was the last reliable way to increase email revenue.  We argued the opposite – that our gains had been due to email list growth and that we were actually killing our files and suppressing our revenues by overemailing our lists.  Our call was that neither email volume nor list growth would save us; we needed to get deeper, not broader.

Thankfully, this is testable.  If email revenue could decline even as lists and email volume grew, we’d be correct.  (You can see where this is going, right?)

Last year, email lists grew five percent.  Nonprofits sent four percent more fundraising emails.  And email revenue went down eight percent.  More isn’t the answer; better is.  Or as M+R put it “email fundraising is important, but it is also hard, and getting harder.”

Monthly giving is a solution.  One-time giving decreased by two percent.  But monthly giving increased by 17%.  It’s now 16% of all online revenue.  We were recently asked about this figure – what’s a good benchmark for how much of your revenue should come from monthly revenue?  My answer was the same as Samuel Gompers’ when he was asked what labor wanted: “More.”

If you have only one percent of your digital revenue as monthly giving, try getting that to two percent.  If you are at half, shoot higher.  As people get more used to making monthly payments for entertainment, food delivery, razors, podcast sponsorship, etc. etc., we can continue to increase these numbers…

… if and only if we create supporters committed enough to make this leap of faith with us.  As we’ll discuss in the coming weeks, we focus a lot of time and effort working in semi- or full-on silos to create monthly, mid and major, and bequest/legacy donors.  While these are not quite the same donor, they all come from the same pool of donors – -the committed.  Generally, none of these are impulse purchases – they are all indicators and results of a deep-seated commitment to your organization.

M+R also reports that there was a significant decline in retention among first-time donors, similar to the overall trend.  Part of this is explainable and explained by the sharp increase in first-time donors in 2017 – when you acquire more, you will retain a smaller percentage because you are acquiring more marginal prospects.  But there was a 14% drop in first-time donor retention in 2018, which should be worrying for all (as should the five percent drop in repeat donor retention, which can’t be explained by 2017 impulse donations).

In media like display or video, you could be paying $359 or $279 (respectively) on average to acquire a donor.  Knowing that, and knowing that second-gift retention is the leakiest part of your leaky bucket, how much are you willing to spend to retain that donor?

There are still areas of opportunity. In particular, search had a return of $4.78 for every dollar invested in advertising.  M+R talks about the very important provisos that you shouldn’t immediately declare search the winner among winners and move your spend there:

“ROAS is an incomplete measure of performance. It does not capture the long-term value of a donor, who might make additional gifts beyond the immediate donation, or whether that donor is new to your organization or not. The truth is, attribution is a fraught and difficult task, and nonprofits employ many different models.”

That said, long-term value, attribution modeling, and such are all ways of explaining up the revenues associated with a cost – unless, for example, you are spending way too much to retain donors (and, given the comments in my last point, you aren’t), your long-term post-acquisition value of a donor is rarely negative.

This means that search merits more investment because it is immediately paying for itself and more – not that it should be taken from elsewhere, but that additional dollars should be invested there.  Second place was social media at $.83 for every dollar spent, which almost certainly has a positive lifetime value (even if you have an industry average 25% second-gift retention, that audience will more than pay for itself with that second-gift, meaning a 12-month-or-less payout).  And as we’ve said, a deeper approach on social can pay dividends in leads or direct donations.

SMS messages also seem to be an area of opportunity.  While not all metrics are available, the click-through rates on these messages put email to shame (the Law of Shitty Clickthroughs means that the newer, more novel channel will usually have this temporary advantage).  The average text list is growing by 14%, but these lists are still small (about 6% of the size of email lists).

Stay for the end-credits scene.  No, not in Avengers: Endgame (although likely also in Avengers: Endgame).  Check out the M+R glossary on metatextuality (and a couple more I won’t spoil!) for fun belated Easter eggs.

Are you bucking the trend and having significant online growth?  Please let your fellow readers know how in the comments…

Nick

P.S. M+R has also provided good content on Facebook fundraisers, but that deserves its own separate focus…