The first half of 2009 is now over and we have some updated information about online giving trends from Blackbaud clients to share. This is a follow-up to the Q1 2009 Online Giving Trends information that was released in April. This information comes from approximately 2,000 nonprofit organizations using Blackbaud's Internet solutions and represents the largest sample size studied in the nonprofit sector.
Average Gift Amount Changes
An analysis of 1,973 nonprofits found an average online gift amount of $124.17 for Q2 of 2009. This was an increase of $2.07 from Q1 2009. A review of all the 2009 data shows that average gift amounts dropped through the first part of the year before bottoming in April and then growing again in May and June. This is consistent with giving trends we've seen for several years now.
Year Over Year Performance Trends
The analysis looked at a sub-group of 1,274 nonprofits to compare their online fundraising results for the first six months of 2008 to the same period of 2009. These nonprofits had a 22.13% year-over-year growth in online revenue. This growth trend continues to be very positive despite mixed economic conditions for many organizations. These organizations all used a combination of Blackbaud online fundraising, email marketing, and integrated CRM tools.
Online Major Giving Trends
An analysis of data for January 1st through June 30th of 2009 found that 1,245 nonprofits had at least one online gift of $1,000 or more. 38 nonprofits in the analysis had at least one online gift of $20,000 of more so far in 2009. Online pledges and recurring gifts were excluded from the analysis. Major donors continue to move to the web as part of their giving behaviors. The 2008 donorCentrics Internet Giving Benchmarking Analysis indicated that median of 34% of online donors earned over $100,000 annually, compared to a median of only 24% of offline donors in the same income range. We'll continue to monitor this trend in the future.
Notes: All data is calculated directly from online transactions processed by Blackbaud. Online recurring gifts and pledges are not included in the entire data analysis. The single largest online gift ($50,000) and single smallest online gift ($1) during the analysis period were removed.
Target Analytics, a Blackbaud company, announced the latest Index of National Fundraising Performance for the first quarter of 2009. The index compares trends in key fundraising indicators from 79 organizations, including over 35 million donors and more than 66 million gifts totaling almost $2 billion in revenue. The index findings include giving data from direct mail, online, telemarketing, events, and other fundraising channels. You can get a complete summary of the latest index findings here.
Revenue and Donor Trends
All key metrics declined for the index as a whole for the first quarter of 2009 as compared to the first quarter of 2008. All of the industry sectors analyzed in the index had revenue declines over this period, and all but one sector had declines in donors as well. For the first time since the index began in 2002, overall revenue per donor declined; revenue per donor declines were experienced by two-thirds of the organizations in the index.
Index revenue declined a median 7.8% from Q1 2008 to Q1 2009. Revenue declines were widespread across the index with only 23% of the organizations in the index had positive revenue growth from Q1 2008 to Q1 2009. Donor numbers in the index fell a median 5.8% from Q1 2008 to Q1 2009. 30% of the organizations in the index had positive donor growth from Q1 2008 to Q1 2009. Donors have been declining consistently for the past three years; the index has not experienced positive year-to-year donor growth since the 2005 U.S. Gulf Coast hurricanes.
In evaluating Q1 2009 trends, it is important to remember that first-quarter rates of growth and decline are often greater than eventual year-end results because they are calculated on relatively small numbers of gifts and revenue amounts. This is further exaggerated because, for many organizations, the first quarter of the calendar year is the slowest fundraising period, with smaller proportions of gifts and revenue coming in during that quarter than any other quarter of the year.
Long-Term Trends
over the past five years, including the record tsunami and hurricane giving periods, index revenue has grown at significantly lower than normal rates. From the twelve months ending Q1 2004 to the twelve months ending Q1 2009, index revenue grew a cumulative median 9.0%. This is an effective annual growth rate of 1.9% per year over these five years. Donors have remained essentially flat over the past five years. Donors declined a cumulative median 0.4% from the twelve months ending Q1 2004 to the twelve months ending Q1 2009. This is an effective annual rate of decline of -0.1%.
Target Analytics noted that declining donor populations across the index may be due to a mix of factors including economic changes, a changing generational profile in the United States, changing attitudes of donors about giving, and a change in focus by fundraisers toward higher-dollar donors. The index excludes iIndividual payments greater than $5,000, soft credits, and matching gift payments.
Performance Differences
There are two new sectors in the index in 2009. These are the arts and culture sector and the religion sector. All sectors saw decreases in revenue from the first quarter of 2008 to the first quarter of 2009. The religion and animal welfare sectors had the smallest revenue declines and the arts and culture, health, and societal benefit sectors had the largest revenue declines. The international relief sector was the only sector to have an increase in donor numbers this quarter, in contrast to the rest of the index. As with revenue, the arts and culture, health, and societal benefit sectors had the largest donor declines.
Click here to get a complete copy of the latest Index of National Fundraising Performance.
I am speaking later today at the AFP South Carolina Lowcountry 2009 Summer Institute in downtown Charleston. It's always good to be able to spend some time with local nonprofits and not have to travel very far to do it.
They have put together a very solid day of sessions. Here's a look at the other presenters:
- "The Thrills, Challenges, and Joys of the Small Shop" — Jill A. Pranger, ACFRE, President, Pranger Philanthropic
- "The Care and Feeding of Donors: How to Keep your Donors Begging for More" — Jim Bush, CFRE, Executive Director, Charleston Animal Society
- "Optimizing Organizational Performance through Collaboration" — Anthony Powell, CFRE, Managing Director, Knowledge Capital Group, LLC
- "How Can I Do Development When Everyone around Me Is Doing Fundraising?" — Jill A. Pranger, ACFRE, President, Pranger Philanthropic
- "Ethics: The Importance of Preaching What You Practice" — A panel moderated by Courtenay M. Fain, Director of Development, Coastal Community Foundation of South Carolina. Featuring Dwayne Green, Esq., owner of Hampton Green, LLC; Linda Ketner, President, KSI Corporation; John O. Sands, Director, Lowcoutry Program, Gaylord and Dorothy Donnelly Foundation; and George Stevens, President, Coastal Community Foundation
- "Building the Brand - In Tough Times!" — Barbara Berglund and Teresa Coles
- "Getting Your CFRE" — Timothy M. Winkler, Sr., CFRE, Principal/Managing Partner, Winkler Consulting Group
I will be doing a presentation called "The Changing Nature of Online Fundraising" and I've made some updates for today's session. Some new examples of nonprofits using social media and updated statistics about online and offline fundraising.
The NetWits Think Tank blog has been churning out some great content lately. There's a growing group of contributors from Blackbaud behind this blog. It's a very good mix of subjects, experts, and advice about thriving in the digital world. Here are a couple of my recent favorites:
Design for Good: 4 Nonprofit Design Principles - Part 1 of 2 by Raheel Gauba - Any article that includes the phrase "Every Pixel has a Purpose" has to be good, right?
Social Media Strategy: 12for12k Challenge with Danny Brown by Frank Barry - Learn more about the 12for12k Challenge and how social media is being used to raise fund and build awareness.
Tangible Love by Courtney Sakre - This one is about how to make better connections with donors and go beyond the typical "donate here" approach to online giving.
Recipe for Search Engine Visibility by Dominic Taverniti - This one covers some basics behind better SEO and SEM tactics for nonprofits.
Today is the Digital Leap conference in London. It's all about fundraising, social networking, and online charity success in the UK and Europe.
Digital Leap is being held at the ICO Conference Centre in central London. There are a great set of speakers at the event including:
-
Ted Hart, CEO, Hart Philanthropic Services Group
- Alan Clayton, Director of Innovation, The Good Agency
- Richie Jones, Founder and Creative Technology Director, Yucca UK
- Robert McAllen, Programme Manager, Blackbaud Europe
- Jason Potts, Director, Think Consulting Solutions
- Reuben Turner, Creative Director, The Good Agency
- Beth Granter, Social Media Marketer, Twentyfirst
Will McInnes, Managing Director, NixonMcInnes
Be sure to check out the Digital Leap blog and follow the conference on Twitter.
The GivingUSA Foundation has released its Giving USA 2009: The Annual Report on Philanthropy for the Year 2008. The report shows the first decline in giving to US charities in current dollars since 1987. Blackbaud also analyzed the data, along with other information, to estimate the growth of online fundraising by US-based nonprofits.
2008 Total Giving Estimates
Giving USA estimates that $307.65 billion was given in 2008, exceeding $300 billion for the second year in a row. The 2007 estimate was revised to $314.07 billion. The change from 2007-2008 is a decrease of 2% or -5.7% adjusted for inflation.
Although this 2008 figure is the first decline in giving in current dollars since 1987, giving still represented 2.2% of GDP. These donations were primarily from:
- Individuals — $229.28 billion, down 2.7% (-6.3% inflation-adjusted)
- Foundations — $41.21 billion, up 3% (-0.8% inflation-adjusted)
- Charitable bequests — $22.66 billion, down 2.8% (-6.4% inflation-adjusted)
- Corporate giving — $14.5 billion, down 4.5% (-8.0% inflation-adjusted)
Where Donors Gave in 2008
Only religious, public-society benefit, and international affairs showed positive changes in contribution totals. The biggest percentage drops were felt by grant-making foundations and human services organizations.
Of the $307.7 billion given to US charities, more than $106.89 billion went to religious organizations. This was an increase of 5.5%, or 1.6% adjusted for inflation. This is the second year in a row religious giving has topped $100 billion. The remainder of the donations went to the following groups:
- Education — $40.9 billion, a decrease of 5.5% (-9% inflation-adjusted)
- Gifts to grant-making foundations — $32.65 billion, a decline of 19.2% (down 22.2% inflation-adjusted)
- Human services — $25.88 billion, down 12.7% (-15.9% inflation-adjusted)
- Public-society benefit — $23.88 billion, up 5.4% (up 1.5% inflation-adjusted)
- Health — $21.64 billion, down 6.5% (-10% inflation-adjusted)
- Arts, culture, and the humanities — $12.79 billion, down 6.4% (-9.9% inflation-adjusted)
- International affairs — $13.3 billion, up 0.6% increase (down 3.1% inflation-adjusted)
- Environment/animals — $6.58 billion – down 5.5% (-9% inflation-adjusted)
- Deductions carried over and other unallocated giving — $19.39 billion
- Foundation grants to individuals is a new category and accounted for $3.7 billion
Online Giving Surpasses $15 Billion in 2008
Blackbaud analyzed the Giving USA data, along with other important metrics, and estimates that more than $15.42 billion was given online to US charities in 2008. This is a 44% increase over 2007's online giving estimates. Online giving accounted for just over 5% of total giving to charities in the US during 2008 and has been growing for many years now.
The analysis is based on the GivingUSA Foundation's previous research findings, The Center on Philanthropy at Indiana University's Philanthropic Giving Index, the Target Analytics 2008 donorCentrics Internet Giving Benchmarking Analysis, The Chronicle of Philanthropy's Survey of Online Fund Raising, and Blackbaud's 2008 State of the Nonprofit Industry survey.
Online giving continues to grow in terms of dollars raised and as a percentage of total fundraising revenue. The steady increase in online fundraising continues despite challenging economic conditions and declines in other channels. Blackbaud's analysis of Q1 2009 online giving showed a 68% growth over the same time period in 2008 for our clients.
Every day nonprofits send out millions of email messages. And every day there are some common sins committed with email. Here are some common email sins that should be avoided:
No Purpose
Before you hit send — stop and ask yourself: Why am I sending this message? Does the message have a clear purpose? If it doesn't then you're doing more harm than good. Make sure that there's a self-evident purpose for the message. Everything from the subject line to the content of the message and the links in it should reinforce that purpose.
No Segmentation
Sending a blast email message to every single email address that you have is bad. And it's more than likely spam, too. "No communication without segmentation" should be your motto. Focus on your best segments and personalize the message in ways that will reinforce your message and resonate better with those targeted recipients.
No Testing
They practice the coin toss for the Super Bowl. Don't you think you should be testing your emails? The most successful nonprofits test everything from segments and subject lines, the day and time of the message, and variations on the content and landing pages. There is no such thing as luck with email. You need to test, test, and test.
No Call to Action
Email is not where the action is. The action only happens on your website. Never send an email message or enewsletter without a call to action. That action doesn't always have to be a financial transaction or advocacy alert. It could be asking to take a poll, survey, participate in a contest, or help spread the word for your organization.
No Follow-Up
Email campaigns are never one-and-done. You need to have a follow-up plan for those who take action and those who don't to maximize results. This could be as simple as a reminder email for people who registered online for an event. It might be a series of emails to new constituents who aren't yet donors. Following up gets results.
These are just a few common mistakes made with email. Do you have any others to confess? Let me know and be sure to look for more in the future.
I am spending a lot of time these days looking at numbers. Lots and lots of numbers. Mostly because I'm working on a new book and exploring the wonderful and strange world of online fundraising metrics. (More on that in future blog posts)
One thing that has got my attention are some of the latest online fundraising benchmarks in the 2009 eNonprofit Benchmarks Study done by M+R Strategic Services and NTEN. I also had a copy of the 2008 study and did a mash-up of some of the findings. All good studies raise questions and this one begs the following question: Is 99% failure acceptable?
Email Results Dropping
The studies highlight the performance of email fundraising appeals sent by nonprofits. To be clear, the studies also look at separate metrics for email newsletter and advocacy alert messages. The three year trend for email shows a drop across the board with the exception of page completion rate. Open rates can be deceptive, but click-through rates and response rates are very telling. And what they are telling us is that 99.88% of these fundraising focused emails failed to result in a gift.
Why 99% Failure is Acceptable
Some nonprofit consultants will point to direct mail where a 2% to 3% conversion rate has people popping the champagne. Others will add that the sheer volume of spam dilutes the potential effectiveness of email. Organizations might also claim that using email is still relatively new for many of them and they can't be expected to outperform more traditional channels.
Why 99% Failure is Not Acceptable
Email is not direct mail. While many of the same strategies apply, it is like comparing apples and iPhones. Email communication has more robust segmentation and personalization capabilities. It has faster response cycles, is more cost effective to test, and combined with higher average gifts it can have better ROI than traditional channels. Email isn't perfect or the Holy Grail of marketing tools, but having success less than 1% of the time shouldn't be acceptable.
What is Your Success Rate?
Go ahead and pick your side in the debate. But make sure you know how you measure up. How do your results compare to these benchmarks? Where is it today? How has it changed over time? Where do you want it to be? What's the value of the difference? Welcome to the beauty and importance of benchmarks. They establish a point of comparison over a period of time and help you measure your own performance against it. Benchmarks don't set your goals, but they can absolutely help drive your performance measurement in meaningful ways.
Results May Vary
All statistical averages hide the reality that some organizations are well above the benchmark and others are way below it. Successful nonprofits have learned that better segmentation, message testing, and integrating their efforts with other channels yields the best results. These organizations also don't push the send button without having a goal for the campaign, a targeted audience for the email, a clear purpose for the message, a measurable call to action, and a plan to monitor the results. 99% failure is not acceptable for these nonprofits.
We see it all the time. Marketing sees the Web as part of its overall communication strategy. Fundraising sees the Web as a place to engage donors at lower costs and reach out to a broader set of constituents in new ways. Ultimately, they both want to achieve success for the nonprofit. But initially, they usually knock heads when trying to pick the right online solution.
The Standoff
Marketing wants to use the Web to build awareness, improve communication, reinforce the organization's brand, and drive people to donate by using compelling messages and stories. Fundraisers want to provide a variety of online giving options, receipt and steward donors in appropriate ways, build relationships to encourage repeat giving, use online ask ladders to assist with a moves management plan, and acquire new donors at lower costs than traditional fundraising channels. Sometimes marketing gets too caught up on what they can't do today. Sometimes fundraising gets too caught up on how they do things today. This leads to a standoff between the two groups and the creation of lots of silos.
Breaking Down Silos
Nonprofits that operate in silos needlessly waste time and resources maintaining those silos. Sometimes those silos are political or territorial. Sometimes those silos are systems or resources. One group owns the data or another group owns a group of donors. One group owns the CRM or another group owns the content. And these silos get created or reinforced by choosing or keeping fragmented systems. If your supporters only knew what went on in the silos, then I suspect they might not be so supportive.
Leadership Must Lead
Leaders in the organization can be the difference. They can take a hammer to the silos. They can remind people to focus on the goals and needs of the entire organization instead of those of individual departments. That isn't always the easy answer, but it is the right one. And when you break down the walls the view of what needs to happen becomes much clearer. You will quickly find that marketing and fundraising have most of the same goals and audiences in common. Imagine that! The successful nonprofits have leaders that aren't looking for short-cuts or clinging to silos. They are challenging the silo mentality and making changes that are making a measureable difference. What are you doing?
Blackbaud recently announced the availability of Blackbaud Nonprofit Central, a solution created specifically for community foundations that enables them to connect nonprofit organizations with donors of similar philanthropic interests. Blackbaud Nonprofit Central gives local nonprofits a central place to highlight their mission and gives donors the information they need to give wisely.
Community Foundation Focus
Blackbaud Nonprofit Central allows community foundations to
connect donors with local nonprofits that meet the donors’
philanthropic interests. The solution contains information about all organizations in the United States that file a 990 return with the IRS. This gives local
nonprofits a central place to better inform donors about their work, add additional profile information, and gives donors a very robust portal to help make giving decisions.
Partnering for Success
Communities Foundation of Texas used Blackbaud Nonprofit Central to create DonorBridge. They partnered with Blackbaud, the Center for Nonprofit Management in Dallas, the Institute for Urban Policy Research at The University of Texas at Dallas, and also received support from The Dallas Foundation. The site is focused on nonprofits in and around the Dallas area.
Big Launch and Big Results
DonorBridge was launched last week and on its first day received 8,400 donations to 353 organizations totaling over $4,000,000. That shattered previous single-day online giving records and sets a new standard among community foundations. That's a credit to the hard work and effort of CFT and the other organizations involved in this project.
APIs, Infinity, Integration, and Beyond
Behind the scenes, Blackbaud Nonprofit Central uses various technologies to make it all happen. Blackbaud is leveraging the Infinity Platform to deliver information about 500,000 nonprofit organzations. Fusion Labs, a Blackbaud Strategic Application Partner, leveraged Blackbaud's open APIs to develop key portions of the solution. Blackbaud NetCommunity drives the content management and email marketing tools. This gives community foundations a fully integrated total solution for their CRM, accounting, grants management, and online giving and communication needs.
This is a great new offering that is getting measureable and sizable results from day one. A big round of applause to everyone who was involved in this project and I'm really looking forward to seeing what's next.
These days there are countless presentations, seminars, articles, blog posts, tweets, and all sorts about raising money in a recession. This blog entry will not be yet another one.
The secret to fundraising in tough times is simply to start or continuing doing all the things you should do when times are good.
1. Have a fundraising plan and a goal.
2. Know your donors.
3. Use multiple channels to engage and build relationships.
4. Ask in meaningful, personal, and appropriate ways.
5. Thank them and steward them.
That's it. That's the list. Successful fundraising is still about doing the basics very very well.
If you are doing the basics, then keep doing them. If you haven't been doing the basics, then start doing them and keep doing them.
It's day two of Blackbaud’s 2009 Conference for Nonprofits here in Ottawa. I'm ready for another round of presentations after an action packed day of sessions yesterday.
Very positive response to yesterday's Internet and marketing related sessions. I always had the chance to talk to clients about some unique needs here in Canada and how web, email, and social media are being used.
Today, I'm doing a session called Blackbaud NetCommunity Showcase: What's New and Cool! I'm showing some brand new features, some upcoming features, and talking a little bit about where we're going with the solution in the future.
I'll be on Twitter today and you can follow the conference by looking for the #bbcon tag.
I'm in the Canadian capital city of Ottawa this week for Blackbaud’s 2009 Conference for Nonprofits. Blackbaud has a large number of Canadian clients and this conference is a popular annual event.
This is my third visit to Canada this year and I'm looking forward to the sessions and presentations this week. Today, I'm doing three sessions on a variety of topics:
You've Got Email! Now What?: I am stepping in for a colleague and doing this session that's all about email best practices.
The Changing Nature of Online Fundraising: This is a session I've been doing for the past few months and covers major trends impacting how nonprofits use the Internet. Some brand new stats, stories, and recommendations for attendees.
Online Metrics Demystified: Understanding How to Measure Your Success Speaker: This is a brand new session and it will focuses on the key online metrics and how to leverage them to improve your results. I'm spending a lot of time thinking and writing about metrics for an upcoming book. So this session give me the chance to try out some concepts and get feedback on what's important to nonprofits.
This should be a very packed day, but I'll be on Twitter and you can follow the conference by looking for the #bbcon tag.
Not too long ago we launched a new offering of our popular Blackbaud NetCommunity solution for nonprofits. We took lots of the Internet goodness of BBNC and put it into an affordable prescriptive solution. Here are some more details about BBNC Grow...
What is it?
Blackbaud NetCommunity Grow is a solution for organizations that are ready to engage donors online, but may have a limited budget or resources to get started. BBNC Grow is a Software as a Service offering where all the costs are bundled into a single annual subscription price. And we gave it some valuable additions that you can't get anywhere else.
What do you get?
An Internet strategy assessment and assistance building an online communication and fundraising campaign plan
A complete content management system with a professional design that's ready for you to build on
An email communications platform with a themed newsletter, appeal, and acknowledgement that's ready to launch
Online giving pages with a personalized strategy to help you drive engaged traffic to them
A supporter profile update form allowing constituents to self-update records that can be approved in The Raiser’s Edge
An event registration page to help you attract more participation without more data entry
“Tell-a-Friend” links, calendars, email subscription forms, and other viral marketing tools to help your website community and online marketing list grow
Unmatched integration with The Raiser's Edge for donations, events, email, constituent information, and other vital information at no additional cost
Regular wellness checks to review campaigns, web content, online fundraising, and other areas to help ensure your long-term success
Why does it matter?
The 2008 State of the Nonprofit Industry Survey says that even though 97% of organizations have a website, only about three quarters of them say they are doing email marketing, and only half send regularly scheduled email communications. While 49% of organizations say they expect online fundraising to make a more substantial contribution toward their revenue in the next year, only 16% have a staffer devoted to it. And to top it all off, The NonProfit Times reported last year that 44% of potential supporters check out an organization online before making a gift.
We didn’t want lack of staff or expertise or resources to keep organizations from succeeding is this incredibly important and high potential area. And we've put together a solution that addresses the core online needs of nonprofit to get started moving in the right direction. Blackbaud NetCommunity Grow can help organizations begin to market themselves professionally and effectively online, so supporters can focus on confidently supporting the mission rather than critiquing the window dressing. It also gives you a robust toolset that you can grow into over time as your momentum and success builds.
How do you learn more?
You can learn more by visiting: www.blackbaud.com/grow. Register for one of our BBNC Grow web seminars or ask us for more information. You can also visit Genesis Women's Shelter. This organization recently implemented BBNC Grow and they are already on their way to improving their online results.
There is a lot going on in the nonprofit world these days. Here are some excellent blog posts to keep you in the know.
Study Provides A Baseline for Nonprofit Use of Social Networks
Beth Kanter does a review of the Nonprofit Social Network Survey Report produced by ThePort Network, Inc, NTEN, and Common Knowledge. The survey examines the use of social networking as a marketing and fundraising tool.
My recent visit with Heifer International
Blackbaud's Raheel Gauba recounts his recent visit to this client in pictures and words. He talks about the work Heifer does as well as their green friendly working environment.
Blogger Outreach. Tread Lightly
Jocelyn Harmon talks about the mistakes made by so many organizations trying to get bloggers to pick up their story. What might work in traditional public relations or mainstream media does not work with social media. Want to get personal attention? Build a personal relationship.
Help a Nonprofit This Mother's Day
Blackbaud's Anthony Sicola covers some nonprofit websites and how they used ecards and tribute giving pages for a Mother's Day focused campaign. He gives plenty of examples and links to check out.
6-Minute Guide to Winning Fundraising Campaigns
Katya Andresen and Rebecca Ruby Higman discuss how the “if you build it, they will come" approach to online giving simply doesn't work anymore. They cover some recommendations for setting goals and using technology to engage donors in better ways.
Common Adwords Mistakes
Beaconfire's Brett Gerstein gives some advice about improving your Google Adwords campaigns. He covers the importance of keyword selection and how to avoid some common mistakes.
4 Keys to Building a Successful Nonprofit Web Site
Blackbaud's Frank Berry blogs about what it takes to build a successful website. He gives some tips on the best way to get the most reach and results from your online content.
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