November 24, 2015

The Luminate Online Monster Benchmark

The jackpot of benchmark reports

Recently at BBCON, Blackbaud released the 9th edition of the Luminate Online Benchmark Report. It is the largest online fundraising and marketing report in the industry and provides the most comprehensive metrics on the state of online fundraising.

  • 685 organizations
  • $1.5 Billion Raised
  • Nearly 22 Million Transactions
  • 6.3 Billion Emails Sent

I don’t consider myself a data nerd by any stretch of the imagination, but I am a fundraising nerd. I get excited by reports, examples of success (and failure), and stories and ideas that can help nonprofit organizations get unstuck. This report is overflowing with useful information; the trick is knowing how to use it.

Eighty percent of the organizations analyzed in this report raised less than $2 million online last fiscal year. When the analysts and authors created the report, they did it with everyone in mind, looking at the highs, medians and lows, mission verticals, and sizes. That breadth of data and analysis enables organizations to put things in context.

The Highlights

Here is a short list of the statistics that stood out to me.

Donors continue to move to online. For the 5th year in a row, online revenue has grown. Here is more good news: the number of gifts made to organizations is also up across all verticals.

Housefiles—the number of usable emails on file—are growing, and most organizations saw the number of donors that are giving increase from FY 14 to FY 15.

With these increases, it’s no surprise that organizations are sending more solicitations to their audience, a 17% increase year over year in the number of fundraising appeals sent.

While the median conversion rate is down again, it has slowed. This is a positive sign when you consider the jump in the number of appeals going out to constituents.

One of the most impressive statistics in the whole report is, when looking at first time gifts v. repeat gifts, first gifts make up 38% of total revenue; repeat gifts amazingly make up 61% of total online revenue. When you consider that the Association of Fundraising Professionals Fundraising Effectiveness Project Study identifies that every 100 new or renewed donors is offset by the loss of 103 donors, our 61% statistic shows you just how effective online fundraising is for today’s nonprofit.

Now let’s get down to business and answer, “What now, Danielle?”

Whether you are an organization that has been dabbling in online fundraising but doing so without a net (aka a plan); or an organization that has a comprehensive, multichannel strategy created to make the leap from good to great, here’s some practical advice to put things in motion. Let’s break it down by different types we see and sort out the nuggets that will be most useful.

The Dabbler

The Dabbler is the organization that:

  • Sends emails, but not consistently
  • Has one or two online fundraising appeals a year
  • May or may not coordinate efforts between marketing and development
  • Has email, forms, and donations housed in different systems
  • Is limited by budget, technology, or both
  • Wishes they could invest more time in expanding knowledge

If most, but not necessarily all, of these things sound familiar, the first action item is to use the report to benchmark your results against your organization’s metrics for the past 2-3 years (the report has a handy tool to do this super easily!). Once you’ve got the numbers, do what Jim Collins recommends and have a “hard truths” meeting with all stakeholders. Now is the time to remove the silos. I like to call this turning on the GPS: before you can progress, advance, or move on to better things, you need a starting point. A good guideline for making this conversation productive: conduct a SWOT analysis. Learn what strengths, opportunities, threats, and weaknesses you have to mitigate or exploit.

Now you’re ready to develop a plan based on realistic goals and identified opportunities. Obviously, there are a lot of steps in between, but there are many resources such as blogs, webinars, and reports to help you along the way. And if technology is identified as a serious pain point limiting your growth, then leverage the benchmark report and your SWOT analysis to make the pitch to leadership for an investment in new online technology.

The Practitioner

  • Perhaps your organization is beyond dabbling and instead has:
  • Consistent monthly communications
  • Multi-message fundraising appeals
  • Messaging that is targeted and most of the time segmented
  • Coordinated offline and online communications
  • Social media playing a big roll
  • Integrated technology

If this is your nonprofit, my bet is that you already benchmark your results— if not quarterly, at least annually. Next time you do, use this report to compare how organizations of similar size are performing. I also recommend conducting a hard truths meeting, because before you can add new tactics or projects, you should stop doing something else that isn’t working well. Frankly, this self-editing process is one of the hardest for organizations to master, yet helps ensure the things you do can be well-executed and resourced.

Since your current plan is performing well and results are solid, you need to figure out what it will take to go from good to great. What you need now are fresh eyes—a consultant who can look at everything you are doing objectively and can provide strategic, actionable advice on what’s next. Perhaps you need to budget for Facebook ads in major appeals; profile your constituents to send more targeted, custom messages; expand your digital footprint with an engagement campaign; or tap into Millennials with peer-to-peer fundraising. Whatever new projects or activities you consider, be smart and weigh resources against opportunities.

One Final Tidbit

Here’s a little advice to help you on the journey of success.

People: The team is your most important asset. They are the glue that holds it together. Invest, teach, celebrate, and promote the group and the individuals.

Culture: You hear about this everywhere, with good reason. The culture has to be right to transform your success. Embrace risk, strive for innovation, have the courage to be honest, and embody the spirit of philanthropy.

Technology: Invest in technology that enables the organization to implement a program that meets today’s needs and is ready for tomorrow’s opportunity (and constituents). And please make sure the team has the training and knowledge to use the technology.

Strategy: It should be multichannel and integrated. The silos have to be removed; marketing & development must work in tandem and be focused on the greater good and greater goal.

No matter what your situation or status – stay the course; lasting change doesn’t happen overnight. To evolve your program, you need a practical (yet exciting) plan to keep everyone on track.

You can go download the report and compare your performance at www.LuminateBenchmarkReport.com. Then stay tuned to npENGAGE.com for blogs filled with opinions, insight, and advice from internal and external experts.

 

Danielle Johnson
Danielle Johnson Vermenton is a speaker, trainer, blogger and passionate fundraiser. She is a Principal Consultant at Blackbaud and has helped more than 60 organizations in the US and Canada raise millions online. Prior to Blackbaud she worked for more than 13 years in the nonprofit sector in roles such as Director of Individual Giving at Boys & Girls Clubs and Leadership Giving Manager at the American Red Cross. You can follow her at @djvermenton.