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Online Fundraising

Don’t be the coyote: Falling retention rates can be stopped

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Recently, Blackbaud’s npENGAGE blog gathered tips on how nonprofits can do a better job keeping donors on board from some of the best fundraisers around.  Your mileage may vary but each insight offers a little piece of gold bound to help at least a little bit. I was struck, however, by the general message: “you need to do a better job engaging people, acknowledging them, and being genuine, loyal and transparent.”

Retention rates will fall as predictably as Wile E Coyote if you don't understand why people support you and focus on those likeliest to stick.
Retention rates will fall as predictably as Wile E Coyote if you don’t understand why people support you and focus on those likeliest to stick.

The message is true and the tactics presented are solid but it’s not enough. We we need to understand why people enter the organization, recognize that many aren’t going to stay, and build fundraising strategies with likely long-term donors in mind. Organizations also need to structure their acquisition and fundraising programs (online and otherwise) for strong collaboration between staff that handle acquisition and long-term retention.

Donor retention is headed downward with a sort of Wile E Coyote falling off a cliff predictability.  Blackbaud’s head science guy, Chuck Longfield, reports that new donor retention is around 27% these days. Retention keeps falling while the incentive to keep people on board grows — acquiring a new donor costs five, six, seven or times more than keeping an existing donor.
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The Network for Good Online Giving Report: Growing, Growing, and Growing Some More

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Network for Good just released their “Digital Giving Index: Q1 2012” report, and as expected it’s got some juicy tidbits and insights about trends in online donations.

A couple of highlights:

  • Online giving is up across all channels. For instance, online giving overall is up 16%, social giving is up 20%, and giving through branded charity websites is up an impressive 36%.
  • Average gift size grew, including a 90% jump in the average size for social giving. The average is now just under $100.

I think the simple take-away here is that online giving is growing – and will probably continue to grow – in importance relative to conventional charitable giving channels. I wouldn’t dump the direct mail program yet, but I’d guess that having a robust online presence is going to be increasingly important for most nonprofits.

The Pitfalls of A/B Testing and Benchmarking

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Improvement begins with measurement, but the ruler can also limit your audacity to try wildly new approaches (photo by Flicker user Thomas Favre-Bulle).
Google is famous for, among other things, crafting a deep, rich culture of A/B testing, the process of comparing the performance of two versions of a web site (or some other output) that differ in a single respect.

The benefit: changes to a web site or some other user interface are governed by real-world user behavior. If you can determine that your email newsletter signup button performs better with the label “Don’t Miss Out” instead of “Subscribe,” well, that’s an easy design change to make.

The practice of benchmarking – using industry standards or averages as a point of comparison for your own performance – has some strong similarities to A/B testing. It’s an analytic tool that helps frame and drive performance-based testing and iteration. The comparison of your organization’s performance to industry benchmarks (e.g., email open rates, average donation value on a fundraising drive) provides the basis for a feedback loop.

The two practices – A/B testing and benchmarking – share a hazard, however. Because a culture of A/B testing is driven by real-time empirical results, and because it generally depends on comparisons between two options that are identical in every respect but one (the discrete element that you are testing), it privileges modest, incremental changes at the expense of audacious leaps.

To use a now-classic business comparison: while Google lives and breathes A/B testing, and constantly refines its way to small performance improvements, the Steve Jobs-era Apple eschewed consumer testing, assuming (with considerable success) that the consumer doesn’t know what it wants and actually requires an audacious company like Apple to redefine product categories altogether.

Similarly, if your point of reference is a collection of industry standards, you are more likely to aim for and be satisfied with performance that meets those standards. The industry benchmarks, like the incremental change model that undergirds A/B testing, may actually constrain your creativity and ambitiousness, impeding your ability to think audaciously about accomplishing something fundamentally different than the other players in your ecosystem, or accomplishing your goals in a profoundly different way.

The implication isn’t that you should steer clear of A/B testing or benchmarking. Both are powerful tools that can help nonprofits focus, refine, and learn more quickly. But you should be aware of the hazards, and make sure even as you improve your iterative cycles you are also protecting your ability to think big and think different about the work your organization does.

And if you want to dive in, there are a ton of great resources on the web, including a series of posts on A/B testing by the 37Signals guys (Part 1, Part 2, and Part 3), the “Ultimate Guide to A/B Testing” on SmashingMagazine, an A/B testing primer on A List Apart, Beth Kanter’s explanation of benchmarking, and the 2012 Nonprofit Social Network Report.

What Nonprofits Can Learn From the YouTube Laugh Factory

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Wired Magazine shares lessons from Maker Studios.

Last month’s Wired magazine had a feature on Maker Studios and the rise of commercially viable independent web-based videos. Their takeaways on effectively using video online:

Rule 1: Make a lot of video content. A lot.
And if the video releases are regularly scheduled, all the better.

Rule 2: Target a niche.
Be really clear on what audience you are targeting and make sure you understand that audience really well.

Rule 3: Connect with your fans.
Olga Kay is sending a personal note to each of the 450,000 people subscribed to her YouTube channel. Nuff said.

Rule 4: Collaborate.
Collaborations can make for great content and introduce all of the folks to each other’s audiences.

Rule 5: Optimize for the algorithms.
One example: tagging, title, explain, and annotate your videos with as many specific and general descriptors as possible.

The goal for most nonprofits might focus more on engagement than ad revenue, but the lessons apply just as well.

Sweet examples of online engagement for fundraising

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You hear it all the time. So often, perhaps, that you’ve tuned it out…

Use online communications and social media to tell your story, give people tangible reasons to get involved, and engage people…interact with them.

A photo used by Wild Futures to help raise funds. Potential donors were offered an opportunity to 'adopt' this monkey.
A photo used by Wild Futures to help raise funds. Potential donors were offered an opportunity to 'adopt' this monkey.

We don’t come across enough examples of this in action. It becomes hard to describe what this really means and how engaging people is different than the traditional ways in which organizations are used to talking at an audience.

Here are a couple great examples from the online fundraising space.

Vasileios Kospanos shares a great story of how Britain’s Wild Futures and the Monkey Sanctuary engaged Twitter followers in a fundraising campaign. Over the course of a couple weeks, Wild Futures shared stories and photos of monkeys that could be ‘adopted’ through a donation. This wasn’t just a call to donate to a worthy cause. That’s an easy pitch to make, though not effective. Wild Futures invited people in, shared photos, told stories. It is a different experience – one that doesn’t assume a potential donor is already convinced to give (which they rarely are).

Another good example comes from the Ocean Conservancy’s year-end fundraising campaign that was shared in Convio’s Connection Cafe. This campaign included clear expressions of appreciation for donors (up front, not just after a gift was made), explanation of the value of donations and examples of successes over the year. Sara Thomas, Senior Manager of Digital Marketing at Ocean Conservancy writes:

It was important to us that we give our constituency tangible actions; reasons to continue supporting us and evidence that we were worthy of their gifts. And everything from our design and messaging, to the various channels we chose to engage with our constituency on, reflected just that.

These are just a couple great recent examples of online engagement in action. The tools matter less than the stories you tell, the clear demonstration of value and the ways in which individuals can respond and share. Would love it if you shared your own examples in the comments.

Thanks to the very tiger’s blog for tipping us off to Kospanos’ story of his monkey adoption (which is also a great use of Storify). 

Easing (and improving) the year-end email fundraising onslaught

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December means the end of the year is upon us and for nonprofits (or, more notably their members and email subscribers) it’s high season for email traffic. The end of the year is a critical time for fundraising. By some measures, up to 30% of donations (online, at least) come at the end of the year. For example, Network for Good has reported that over 30% of their annual online donation processing happens in December. Online gifts in December tend to be larger. These are just a couple stats in Network for Good’s recent Holiday Guide for companies partnering with organizations (worth the read – PDF).

Woman fighting email with sword - How to avoid email fatigue in December and still raise money.
Avoid email fatigue in December and still raise money.

You will see more email than ever this December, especially the last couple weeks of the month, as organizations try to cover all their bases and leave no stone unturned. It can be overwhelming for subscribers but, like political ads on TV, lots of email works. People give to organizations they love AND know about. If they don’t think of you when making those year-end donations, even if they like what you do, you will miss out.

How do we build awareness (and passion), increase the tempo of messages and make people happy, not grumpy, about all this email?

Point out Successes

You’ve had a great year and been a fabulous steward of your donors’ gifts. Remind people of that. The end of the year is the perfect time to sum up what’s happened with the investment made by donors. Your organization has a theory of change and/or business plan. Show results. [Read more…] about Easing (and improving) the year-end email fundraising onslaught

Want to Fundraise Like Charity:Water? Develop Engaged Advocates, not Donors

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I’ve always been struck by the different ways old and new organizations approach online communications, fundraising and organizing. The two groups could learn a lot by studying each other.

Charity:Water poster - 4,5000 children will die today from water-related diseases
Charity:Water poster with a focused and powerful idea.

Newer groups aren’t beholden to a certain way of doing things, entrenched hierarchies and well-established silos. They’re likely led and staffed by bootstrapping generalists that are truly passionate about an idea or mission and not much deterred by failures. Their enthusiasm rubs off on those around them and can stir up a hornet’s nest of much-needed action.

Organizations that have been around a while (and let’s say 15-20 years or more) have staying power. They have figured out how to get things done and sustain the business of running an organization. Relationship-building takes time and they have stuck to it – likely carving out strong relationships with the powerful in communities and government.

Most that work in and around nonprofit organizations these days would probably say that adapting to digital networks and online fundraising has been a challenge for older groups. A well-established way of doing things is challenged by the speed and apparent loss of control over message and action wrought by online networks.

Learning from Younger Groups

There is room in the nonprofit tent for both old and new organizations. But technical change is happening fast and the fabric of communities, environment, institutions is fraying before our eyes. Groups need to be at the top of their game. [Read more…] about Want to Fundraise Like Charity:Water? Develop Engaged Advocates, not Donors

Online Fundrasing Report: Sorting the Tea Leaves

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Chances are, if you have an email account (and if you don’t it’s hard to imagine you’re reading this) then you have received, oh, at least a couple messages from non-profits today that involve a donation request. Maybe you opened one. Perhaps, if it is a group or cause that touches your heart or just happens to have a crazy interesting pitch, you gave.

A recent New York Times article discussed a report from Target Analytics (a division of Blackbaud) that looks at online fundraising results over time in several large non-profit organizations. The report is worth a look for non-profit leaders and fundraisers.

The highlight of the report seems to be advertised as this: online donors might give more the first time around but aren’t so loyal (and seem to give via direct mail later on).

For folks that have thought about the generational differences between online and offline donors – or knows that organizations are busy sending mail to online donors but don’t know how to move mail donors online – the report might not be surprising.

But what is there that sheds light on some of the important strategic decisions that need to be made?

[Read more…] about Online Fundrasing Report: Sorting the Tea Leaves