Why Spend Time on Digital Fundraising?

Digital Fundraising has been evolving for over a decade now, but it still does not carry its own weight when it comes to attributable revenue for nonprofits. Blackbaud puts the percentage of revenue received online at 8.3%. Overall those years online still accounts for a small portion of revenue that organizations generate through their fundraising efforts and no one expects that to jump drastically in the short-term. So as a consultant who helps organizations raise money I have to ask myself, “Would organizations be better off focusing their efforts on activities that produce more revenue?” Sometimes the answer is yes.
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When organizations have to decide “do we make phone calls or send another email” there is no question, you make the phone calls. If you have to choose between sending a letter or posting updates on your Facebook page, you send the letter. But when there is discretionary time and your core fundraising activities are covered I think it is still well worth your time to invest time in Digital Fundraising and I will give you my reasons why.

Donors who get both direct mail and email give more

A study by the political fundraising firm FLS Connect looked at the effect of having the same size file (in this study 25k) be made up of a different percent of multi-channel donors (from 10% to 30%) and the difference that makes in terms of total revenue when you look at their average lifetime value. Spend a minute looking at the study, but the result of having your file be made up of a higher percentage of multi-channel donors was $800K from the same number of donors.

Your website is donors first impression of your organization

Nearly 20% of donors will go on to your website to give a gift as a result of getting a direct mail letter. Furthermore 86% of donors go to an organizations website before they make an online gift. Your website is the first place donors go to for more information about your cause. That expirence can neither lead them to make a gift online or dissuaded them. Your website serves lots of purposes, but increasingly it plays a major role in your fundraising, whether they came there by digital means or not. Digital Fundraising is becoming a catch-all for many other activities that organizations engage in when trying to raise money.

If you are sending out a direct mail letter you should make sure that your homepage has some connection to it so that donors that are coming to your site because of the appeal letter see the connection and continue on their path to make a gift online. Donors don’t really care if the website falls under the marketing department while the letter they just received came from the development department. Organizations that have a bifurcated view of communications will have a hard time coping with the changes in donor expectations when they judge organizations based on the content and design of the website.

 

Digital Fundraising can drive insight

Digital provides you with nearly instant feedback on a number of key factors regarding appeal messaging or strategy. Using digital to test things out can take the guesswork out of your fundraising strategies.

I remember setting up direct mail acquisition tests for clients and setting the expectations for when we would know a winner would be in 6 months. Yes, we would insist on at least that long before we allowed anyone to make a determination about the test or even start to report back on it.

With digital, you can know within 24 hours or sooner if a particular image or headline is the better way to go with your audience. What a tremendous improvement compared to how optimization previously occurred in this industry.

It is because of these quick learning that you can use digital to inform your direct mail strategy. Not sure what image to put on your envelope to get more people to open it? Create two versions of an email and send it to a test group and see if you get a lift in your click thru rate. Debating between some headlines on your next appeal? Create two versions of a Facebook ad and target your donor list with the placement, spend $20 bucks and see what headline engages your audience better.

Digital Fundraisers are experimenters 

Because of the insights that digital can provide organizations I believe that those that focus on digital fundraising and are engaged in optimization are going to be the better fundraisers in the long run. Who would you rather go to for an advice someone who has been following best practices for the past 20 years or someone that has verifiable data on what produced better results with a donor file and is able to turn that data into a learning and a better understanding of donors and what makes them say yes?

The great part is that those things don’t have to be mutually exclusive. New and seasoned professionals can try their hand at digital and learn from the process. The previous high cost that came with extensive testing has been removed in this digital world. There are multiple low-cost ways to try out an idea and see if it has merit before investing more heavily in it.

If you have other ideas on the insights that digital fundraising can bring about even though it still isn’t the money maker that other channels are I would love to hear them. Tweet at me @BradJDavies