What does digital fundraising look like in your organization?
For the 500-plus nonprofit organizations (88% are small- or medium-sized, like yours) surveyed in the 2016 Digital Outlook Report, the picture is pretty dismal:
- Insufficient budget (76%)
- Insufficient staff (76%)
- Unable to prove ROI to colleagues and leadership (37%)
Sound familiar? It should! These findings highlight the same lack of investment that undermines traditional fundraising and marketing for too many organizations.
It’s a real catch-22: Success is impossible without the necessary investment in staff, skills, and budget. In this scenario, identifying and analyzing the analytics that shows what to do more or less of is likely to drop low on the to-do list.
Professionalizing Digital Fundraising Is the Ultimate Success Factor: Ready, Set, Go
Care2, HJC, NTEN, and the Resource Alliance collaborated on this survey to discover how to “best leverage digital communications and fundraising to make the world a better place.”
The research team shares these success factors:
- Ready: The right staff (with the right skills) and sufficient budget are in place.
- Set (Part 1): The ability to distribute the right content to the right people at the right time via the right channels.
- Set (Part 2): The ability to measure, analyze, and improve your digital fundraising. “Without the ability to track and analyze, no amount of staffing, structure, or cultural shifts to digital will matter, and you won’t be able to go”
- Go: Better-than-ever digital fundraising and communications!
Start with These 10 Key Performance Indicators (KPIs), or as Many as You Can Handle
I held my breath as I devoured the report, hoping to find the magic list of analytics to focus on. Because of that stubborn Catch 22, we have to focus on the few steps—in this case, measuring, analyzing, and acting on key digital fundraising metrics—with the greatest potential and take it incrementally forward from there.
The report focuses on the strategic call to action to increase investment in digital strategies. I was lucky enough to learn the researchers’ top 10 metric picks in the #16NTCoutlook session on the findings at 16NTC, NTEN’s annual conference. Their top metrics:
- New donor acquisition rate
- Donor renewal rate
- Donor reactivation rate
- Net new donors
- Average gift (by channel)
- Time to first/second gift
- Revenue per donor (by channel)
- Cost to raise (by channel)
- Gross/net revenue
- Lifetime value (by channel)
Assess Metrics Through a New Lens for Truly Integrated Communications
Harvesting metrics is just the beginning. Analyzing them and putting them to work is the powerhouse steps in the metrics matrix.
The Digital Outlook team recommends that you:
- Look at your digital fundraising metrics alone, and then
- Mix them with metrics from events, program, and advocacy communications.
With all the effort you pour into digital fundraising, it’s time to realign your approach to reflect your donors. Communicating with your people only on fundraising, when some are also in touch with your other campaigns, is counterproductive.
Use Fundraising Data Across Functions to Sketch Conversion Funnels
The research team recommends using the metrics you harvest to draw an accurate conversion funnel that highlights each lifestyle phase. Of course, you’ll need a reliable, comprehensive donor management system in place to make this possible.
The process of funnel creation will unearth the major lifestyle stages of donors, prospects, and other supporters, as in the example on this page.
Next, Match Donor Communications to Lifecycle Stages (and Other Factors)
The research team suggests that the primary way to group and connect with supporters is based on how they behave or interact with you, as opposed to segmenting them based on other elements such as habits, preferences, or values. What do you think? Share your experiences with segmentation in the comments section below.
Once you’re clear on the distinct stages relevant to your target audiences, the research team recommends crafting specific messages relevant to audiences in each phase.
The marketing and development team at the Pancreatic Cancer Action Network (PCAN) is fully taking on this approach, going so far as to restructure roles and responsibilities by lifestyle stage. For example, a lead generation specialist would work across functions, from fundraising and programs to communications and advocacy.
Get Your Donor Database in Shape, Then Use KPIs to Define Lifecycles and Weave Them into Your Fundraising Messages and Methods
Frankly, I don’t suggest you ignore everything else you know (or should uncover) about your donors. Insights such as wants, values, habits, preferences—the kind of insights you’ve gathered through conversations and surveys, outlined in personas, and used as the heart of semi-personalized messages—are equally important.
But this radical lifecycle-based approach is refreshing in its boldness and imagination, and it is definitely a valid dimension of segmentation. I’ll be watching the Pancreatic Cancer Action Network to see how it goes.