Invest, Test, Track and Target

      By: Joshua Shimkin  |  April 26, 2006

      I attended a briefing on the eNonprofit Benchmarks Study two weeks ago. It is a must read for any nonprofit online professional because it provides a timely and robust analysis of online fundraising and advocacy programs for nonprofits. It even breaks down email and ROI metrics between nonprofits focused on civil rights, environmental protection, and international aid. With the study, nonprofit online professionals can measure their email marketing programs against the results of these 15 national nonprofit organizations.

      There is one grand story to tell after reading the whole report: you have to invest, test, track and target for your online activities to pay off. Don't expect to flip the switch of an online fundraising program and miraculously fundraising will go through the roof. Of course, disasters and emergencies are a rare exception, but most of the organizations doing this work have had online programs for years now. Here is a summary of the key findings of the report:

      Findings you would expect:

      • Bigger organizations = Bigger email lists = Bigger results: More resources pay off.
      • Email open rates declining: I think most online programs have seen a decline over the last year because of the sheer number of nonprofits running online programs and using similar content to advance their programs.
      • Online activists outnumber online donors: An average of 47% of all email subscribers took at least one online action, while only 6% made a donation.

      Findings you wouldn't expect:

      • Investment pays off: If you measure results just in terms of fundraising, online programs don't start earning a profit until they have spent more than $600,000 over the life of their online activities.
      • Email list churn at 28%: It's a reality, so plan for it.

      At the end of the report, you'll find the best practices, which follow directly from these findings. During a Q&A, Kira Marchenese from the Environmental Defense and Jeff Regen from Defenders of Wildlife offered some great advice and lessons learned about how to manage an online program. I found the following tips very helpful as a way to invigorate online advocacy and fundraising activities: (in no particular order)

      1. Do an email burst to inactive supporters when you have some down time and use your edgiest content. What do you have to lose? You might just find a new message that particularly resonates with supporters.
      2. Set aside a budget for online acquisition. Defenders of Wildlife spends 50% of its online budget on advertising.
      3. Hire an analyst to inform your future online activities. If that's too resource instensive, make traffic analysis and optimization part of someone's job description and set aside time every month to focus on that. You have to schedule it and make it a priority or you will never learn from the data you have collected.
      4. Schedule a weekly editorial meeting to discuss the message, actions and metrics.
      5. Pay special attention to the patterns of new visitors to your site. Their paths through the site are a real-time focus group for what is working -- and what isn't.
      Unfortunately, the study didn't analyze the optimal frequency for sending emails in a month. The authors addressed this omission by noting how difficult it would be to compare the email blasts to different list segments. I recommend that you test different frequencies to see what works. Defenders of Wildlife sends an average of 9.8 emails a month.

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      Comments

      Leda Dederich (not verified) — Fri, 04/28/2006 - 07:14
      Thanks for taking the time to sum up this study... I think it is worth noting, however, that the study was of 17 NPOs, all with huge budgets. And all clients of either GetActive, Kintera, or Convio. That, in my pov, does not a benchmark make. I appreciate the work that went into this study, especially the info that's relevant to the entire sector (list churn, for example). But one of the MAJOR takeaways from the study is that more money and more resources are required for a successful online strategy. And that is practically an insult to the thousands of orgs out there who do not have the option of investing the kinds of dollars referred to (we're talking annual comms budgets of more than $300K a year). Obviously, some smart investment is required. Including solid tools (many of which are provided at affordable rates by those other than the big GA/Convio/Kitera trio). But successful online campaigns are about creativity, hard work, and relationship building. And when we talk about eBenchmarks for the entire nonprofit sector, let's include the practices of those who arn't just throwing hundreds of thousands of dollars a year at building big lists to raise more money. Which leads to the real elephant in the room. What is success anyway? Big lists? 1 million raised in 1 day? 5 thousand emails to your senator? How do we measure the change we're trying to see in the world? And how do our online actions relate to this? Those are the benchmark I'm curious about.
      marshallkirkpatrick (not verified) — Fri, 04/28/2006 - 10:16
      If between 5 and 12% of people online were reading RSS feeds at the beginning of 2005 (Pew and Jupiter studies) and that number has undoubtedly grown since then, and if RSS builds tighter relationships with constituents than email (it does: zero spam, easy to unsubscribe) and if RSS advertising has a higher click-through rate than AdWords (anecdotal, but blogged about by a handful of people so far) ...then I'd like to start seeing studies like this that look to the future, beyond email. If these big orgs and big vendors aren't looking beyond email, then I shudder to think what effectiveness will look like in 1 to 2 years. I think it all means that this is a real opportunity for small, agile, lower budget orgs to make an impact and grab visibility. All three of the above named orgs at least offer feeds for their press releases - but I sure look forward to the day that email isn't the primary focus of communications campaigns.
      Joshua Shimkin — Fri, 04/28/2006 - 12:56
      Leda, Thanks for your comment. Yep, that's definitely the elephant in the room and the authors of the study, during the breifing, acknowledged that they deliberated at length on this exact question. Ideally, I'd like to see a benchmarks for different sized organizations. Also, what messages work the best. We all know that fundraising for a billboard or television commerical works well online. What action messages are working well for petition generation but are overlooked? I wouldn't call the study "insulting" to smaller nonprofits because if the study is describing the reality of what an organization can expect from an online program, then it's only fair that they know what their getting into. Certainly the cost of online advocacy and fundraising tools is dropping as the competition increases. This means ROI data in the study may describe the past but won't be a good benchmark for the future. That's we love this industry, right? It's moving so quickly that a rigorous study is hard to do.
      Joshua Shimkin — Fri, 04/28/2006 - 13:05
      Marshall, Damn straight. At the end of the day, email is one to many communications and we know the real juice is in many to many communications. I appreaciate the study because our community had to start somewhere. Yes, email hasn't been the fun stuff for a couple years now, but most nonprofits are just getting to the blogs and RSS right now. Del.icio.us, YouTube, Essembly and the like are fun to visit, but most nonprofits don't want to live there yet. It's my job to keep EchoDitto's clients one step ahead of the curve and think creatively about how to use existing communities to further our clients goals. The studies will catch up to us. Nice personal blog, by the way.
      Karen Matheson (not verified) — Mon, 05/01/2006 - 15:32
      It's great to hear all of this feedback about the Benchmarks Study. As one of the authors I wanted to make a couple responses to the posts. It's unfortunate that we weren't able to include smaller organizations in our 15 in-depth study partner data set. We choose larger organizations because their data were in a structure that we could somewhat uniformly extract. Using smaller organizations with "home grown" systems or less popular systems would have provided less standardized data and would have been more time consuming than the resources we had available. We did try and reach out to the smaller organizations with including the wider nonprofit survey data in the study. It would be great to see some more research on smaller groups and their data. With regards to the drop in open rates that we saw over time, I suspect that it may have more to do with technology than with more groups out there emailing the public. This is my guess because even though you see in the study that response rates are slightly lower in '04-'05 than '03-'04, this change was not found to be statistically significant. Statistically speaking we didn't see a change in response rate.