PaperlessChoice

by Michael Stein

Online video has continued to be a growing trend in Internet use for the past several years.  A big part of the phenomenal success of online video is the widespread availability of broadband Internet connectivity in homes and offices, and Web portals such as YouTube.com which have made video watching a common pastime for people of all ages.

Online video has been quickly adopted by nonprofits across the country as a powerful tool for communicating with supporters and donors, and it is rapidly taking its place alongside the websites, email messaging and Facebook pages as a key technique for online engagement.

Digital fundraising strategists strongly recommend incorporating video into online fundraising appeals.  Video increases email open rates, it increases click-through rates, and it often increases online donations through its powerful emotional impact on the viewer.

Here are ten best practices for the use of video with online fundraising appeals:

1)    Video should complement your other messaging.  Consider how your online video will fit in with the other online and offline content that you’re producing.  Video should extend other content so that it will attract viewers and a broader audience.  Your online videos should fit into an existing campaign that you’re engaged in so that you can use the video to broaden your reach.

2)    Let your creative juices flow.  Online video gets high points and praise when it can break out of the formula and entertain viewers.  Make the investment to add music, first-person speakers and lively camera angles to make watching fun, and to encourage viewers to forward the video to friends.  You can use videos to introduce your organization, recruit volunteers, present slideshows of actual program activities, or show stories from the field.

3)    Keep video messaging simple.  Videos often attract new audiences, especially individuals who may not be familiar with your mission and programs.  Don’t assume that your viewers are up to speed on everything you’ve done, and script them to educate viewers from the ground up.

4)    Keep video messaging short.  Under three minutes is best.  If you must produce a longer video, break it into multiple parts.

5)    Use video to go in-depth about an issue.  While it’s important to keep things simple, you can also use online video to explore a particular issue in depth, targeting your more knowledgeable supporters.  They’ll appreciate the effort you’ve made to connect with them.

6)   Invite video submissions.  Many organizations have been successful at opening their doors to video submissions from supporters.  Your best volunteers may have dreams of directing a video about your organization.

7)    Keep your production quality high.  To get a good end result, shoot your video with Web publishing in mind.  Prepare a script and get feedback.  Shoot “B-roll” (background visuals) to use in the video.  Sound is critical to enhance the images.

8)    Aim to go viral with your video. The more fun and engaging you can make your online videos, the more the video will get talked about and passed along to others.  Make it easy on your website and in your emails for people to forward the video to others, post to Facebook, or add to their website or blog.

9)    Be patient and build your online video audience over time.  Like website traffic and email subscribers, building an online video audience requires patience and consistency.  From campaign to campaign, online videos will attract a viewing audience among your core supporters and then more broadly.

10)    Learn more with the See3 “Guide to Online Video.”  For further learning, I recommend this informative seven-part video series created as an introduction to online video for nonprofits.

An earlier version of this article was published in Mal Warwick’s Newsletter in December 2008.

Continue Reading

Guest post by Jeff Achen, Interactive Media Strategist at GiveMN

Digital fundraising is off to a great start in Minnesota with GiveMN.org. GiveMN.org is a new website where anyone can donate money, run a fundraiser for his or her favorite nonprofit, or raise money as a nonprofit. GiveMN’s mission is totally in sync with Paperless Choice in helping Minnesotans move nonprofit fundraising efforts in a paperless direction. But, it is a strong network of local relationships that has been the real key to success of this online giving effort.

GiveMN’s History: A Paperless Trail

GiveMN started in 2008 with Minnesota Community Foundation’s recognition that new tools and technologies were enabling exciting new ways to give. It also came down to a clear choice: to lead, follow or get out of the way. But, the Minnesota Community Foundation and the platform itself are only half the story.

We partnered with Razoo.com to build the GiveMN website. They built a site that included program-level content, social media integration, and terrific tools for donors.

One of the most important partner bases was the core funding and outreach group, which gave the effort credibility. Our great group of core partners, including the Minneapolis Foundation, United Way and others, reached out to all their nonprofits, which then reached out to all their donors and at every point in that progression people were being asked to participate by an organization that they really trusted and with which they already had a relationship.

We also contracted with MAP for Nonprofits, a nonprofit organization that provides technical assistance and support for Minnesota nonprofits, to spearhead an incredibly successful outreach and training campaign leading up to GiveMN’s launch. MAP’s outreach to nonprofits was complemented by a public relations campaign aimed at educating donors on the value of paperless giving online—for them and for the nonprofit.

Give to the Max Day

The focal point of all this launch activity was Give to the Max Day on November 17, 2009, our first major giving appeal. The Saint Paul Foundation, Minneapolis Foundation and Bush Foundation committed $500,000 in matching contributions and paid the transaction fees so that 100% of all donations went to the nonprofit organizations. And, the three nonprofits that received donations from the most individual donors received cash prizes: $5,000 for first prize, $2,500 for second, and $1,000 for third.

Give to the Max Day was a phenomenal success. We helped Minnesota nonprofits raise more than $14 million in a truly statewide effort. We had a record 38,778 donors make donations, surpassing the wildest expectations of everyone involved. 3,434 nonprofits benefited on Give to the Max day with an average of $4,077 per nonprofit. In a single day, GiveMN surpassed the volume of most of the leading online giving web sites.

What Lies Ahead

While we are still early in our efforts, we believe the future of GiveMN as a paperless choice looks promising. Ninety-seven percent of donors surveyed after Give to the Max Day indicated they are likely to use the site again and we saw another $1 million in transactions come in the month following the launch event.

From a strategic standpoint, we believe the success of GiveMN comes from marrying amazing technology with trust-based, local relationships. Local content and local partnerships give GiveMN a credibility and pull that a lot of the national e-philanthropy platforms lack. From a paperless standpoint, it really does take offline trust and relationships to make an e-philanthropy marketplace work. GiveMN is a testament to that and we hope that it will continue to be.

Continue Reading

By Michael Stein

While email and web copy may persuade people to “click to donate now,” very few who land on the donation page actually complete the donation transaction.  This startling statement by the experts at Berkeley-based online fundraising agency Donordigital brought out in the open something that many online fundraisers have long suspected but have not had the analytical patience to prove.

In partnership with Donordigital, Amnesty International USA embarked on a project aimed at improving donation landing page conversions before the all-important end-of-year fundraising season in order to increase total dollars raised.  Their testing approach was that small changes to their landing pages could improve conversions and raise more money.  Donordigital published its findings in an 11-page report in May 2008 entitled “Perfecting Your Page: Can donation page optimization boost online giving? (PDF)”

Here are Donordigital’s best practices for donation landing pages based on their study:

•    Similar to the rule that a large font is more eye-catching, bigger donate buttons helped Amnesty to convert more donors
•    A vividly colored donation button can strongly boost landing page conversion, but seasonality and color choice influenced whether it did.  Donordigital encourages organizations to test to see which colors work best with their supporters and on which landing pages.
•    Remove as many fields as possible from the personal information form. Amnesty International loses little quality information about its supporters by removing the title and suffix fields – and gets much stronger conversion rates.
•    Display your credit card processor’s security badge for added donor confidence.
•    Using firmer language on the donation button (“Donate Now” instead of “Submit”) did not produce statistically higher conversions.

Donordigital’s Nick Allen wrote about landing page optimization for the Nonprofit Technology Enterprise Network’s blog.

Continue Reading

by Michael Stein

For the fourth consecutive year, online vendor Convio has assembled The Convio Online Nonprofit Benchmark Study which assembles 2009 online metrics for over 500 nonprofits in 15 nonprofit sectors.

If you’ll accept that Convio customers are larger in size and better financed than the average nonprofit, then this annual study provides a useful source for online benchmarks such as average online gift sizes, online fundraising response rates, email list growth, website traffic, and much more.

Here are the key findings for 2009:

•    Online giving grew 14 percent despite a difficult economy. Overall, 69 percent of organizations raised more in 2009 than 2008, while 31 percent saw declines in their online fundraising.
•    Donors were still giving, but giving smaller amounts. 61 percent of all organizations saw their average gift drop in 2009.
•    The average online gift was $80.81, with higher giving reported for disaster fundraising. For those calculating return on investment for list growth, the online revenue per usable email address in 2009 was $11.68.
•    Small organizations grew fastest. Organizations with fewer than 10,000 email addresses on file grew online revenue by 26 percent, and gifts by 32 percent.
•    Email files continued to grow strongly. The total email file grew 27 percent in 2009 to 39,100 constituents.
•    The open rate for email fundraising appeals was 19%.  The click-through rate was 1.7%, down from 2% in 2008.  The overall performance of online fundraising appeals was 0.15%, a slight rise from the year before.
•    Web traffic growth continued for most, but at a slower rate. 60 percent of organizations grew their website traffic from 2008 to 2009. Web traffic growth in 2009 was in the single digits at 6 percent compared with double digit growth seen in previous years.
•    Web traffic was strongly correlated with email file growth. 38 percent of an organization’s success building large email files could be directly attributed to the amount of traffic to the organization’s website.
•    Registration rates dropped. The rate at which organizations converted website visitors to their email file declined to 2.12 percent in 2009.
•    Constituents were more reluctant to open emails and click-through. While open rates for both fundraising appeals and newsletters remained around 20 percent, the click-through rates for both types of online communication declined in 2009.
•    About 7% of online activists also donated money online to the organization they took action with.  Conversely, 8% of online donors also took an online advocacy action with the same organization.

This annual review by Convio is a useful compendium of benchmarks, although I advise organizations to not feel too locked in by these average results.  More than anything they provide a useful look into how digital fundraising is evolving, particularly at a time when electronic tools are changing rapidly and the economy is having an impact on giving.

Missing from Convio’s annual reports are the still murky impact of online social media and mobile messaging on fundraising, along with changing attitudes towards paper-based direct mail.  We’ll continue to explore the synergies between these platforms, channels, and devices in articles to come.

Continue Reading

by Michael Stein

Online fundraising is now fifteen years old and email appeals have become a staple of the online experience for millions of Americans.  Most charities that send direct mail solicitations to their donors and prospects are also sending out email appeals to those with email addresses on file.

With fifteen years under their collective fundraising belts, nonprofits have learned a thing or two about their return on investment (ROI) in online fundraising.  And more often than not, these nonprofits are comparing their ROI to that achieved with their direct mail programs — assuming they have one — which for numerous decades has been our fundraising foundational benchmark.

It’ll come as no surprise that online fundraising results vary widely.  Philip King, the CEO of online fundraising solutions company Artez Interactive, writes in Fundraising Success Magazine in January 2009, “While some fundraisers have struck gold — generating 10 times their online investments in as little as three months — others just break even after three years of hard work.” Lots of factors play into this including how long an organization has been building an email list, the tech savvy of key management staff, or simply the luck of riding the coattail of some viral marketing event that delivers instant results.

So what is the value of an online donor?  For the past decade, we’ve seen the gradual rise in the size of the average online gift.  According to the most recent online benchmark reports from both the Nonprofit Technology Enterprise Network and tech vendor Convio, the average online gift in 2009 stands at $70. This is twice the average gift that is typically received offline for events such as direct mail appeals or walk-a-thons.  Add to this the very marginal cost of sending a thousand emails instead of just one email, and the mathematics of online fundraising look very good.

The two other key variables in the online fundraising equation are the size of an organization’s email list, and the online fundraising response rate.  Email list size is a critical issue, since the mathematics depend on scale to be effective.  The challenge for most organizations is how to build up the size of their list.  This depends on how long and well they’ve been collecting emails, how often they email updates to supporters, and whether they have an active online advocacy program which is one of the most effective list generating techniques.  List sizes vary widely from a few thousand for a local charity, to sizes in the seven digits at large national nonprofits with name brands.

The online fundraising response rate is how successful a nonprofit is at raising money from their list.  The national benchmark (from the same earlier sources) is around 0.12%.  You might think that achieving this benchmark is easy, but the devil is in the details: From lines, Subject lines, good copy, a Donate Now button, an embedded video, and a good donation landing page.  Add to that an email (messaging) vendor and some savvy at creating an HTML email template.  The complexity adds up fast.

This is why online fundraising has become a career choice for savvy fundraisers turned techies, or techies turned fundraisers.  Having made my own living at this trade for the past few decades, I have high praise for those who labor silently behind the scenes, putting these various tools and techniques together to raise money for nonprofits.  Finding a good staff person to manage these tools is a rare and valuable commodity.

A key strategic decision for organizations that want to increase their online fundraising investment is to decide whether to outsource that work or hire someone in-house.  The industry of service providers willing to assist with online fundraising is vast, and has become specialized by verticals such as unions, alumni networks, environmental groups, conservatives, and others. The competition for business in this service industry is huge, with firms vying for lucrative contracts.

Finally, the technology tools themselves provide a high cost variance.  It’s become relatively inexpensive to build a basic website or send out simple emails, but succeeding with online fundraising requires a more complex process of integration.  Integrated online solutions are the growing trend, and vendors such as Convio, Blackbaud, Democracy In Action, Wild Apricot, MemberClicks, eTapestry and numerous other web-based systems are now available to send emails, process online gifts, and track donor data.  Costs range from $100 per month for some of the solutions, to several $1,000 per month for more complex integrated systems, and the right solution for you will depend on what you’re trying to do online and the size of your email list and online audience.

Most of this discussion about the return on investment in online fundraising has presumed that the email appeal is the technique being used to drive the giving process, with the size of the organization’s email list being the scalable variable.  Fast forward to 2010, and new opportunities for online fundraising have emerged in online social networks Facebook and Twitter, and mobile fundraising.  These digital platforms are playing a new role in the online fundraising equation, and their value is still a hot debate topic and subject to real world testing.

Writes Donordigital founder Nick Allen in a recent article in Mal Warwick’s Newsletter: “Facebook, Twitter, iPhones, and whatever comes next are going to play an ever larger role in fundraising, even if you can’t easily measure the ROI from social communications.”  Nick urges nonprofits to “dedicate more staff time to building relationships with donors and other supporters who use the networks, and try to figure out the revenue stream as well.”

Digital fundraising is alive and well, and pushing new boundaries with social media and mobile tools.  This fast evolving medium reminds us that just as technology is changing, so are donors’ interests and preferences in how they want to be involved in the fundraising experience. Paper-based fundraising has remained relatively unchanged for several decades, while digital fundraising is reinventing itself every few years, trying to keep up with the attention span, interests, and devices being used by the average donor.

Philip King of Artez Interactive: “Any way you look at it, your digital ROI should beat every other direct channel at your disposal … hands down. In comparison to your phones, your mail and your canvassing, every dollar spent on digital should produce more dollars for your cause. Why? Because the average gifts will be higher, and the cost to get each gift will be lower. As an added bonus, you’ll be saving many, many trees!”

Continue Reading

by Michael Stein

As a nonprofit technology analyst I’m enamored by “benchmark” and “trend” reports that look at digital fundraising.  These are published with regular frequency by research organizations, trade associations, consulting agencies, and tech firms.  The question for many of us in this field was whether online giving trends in 2009 would mirror the turmoil in the American economy and lead to a decline in revenues for nonprofits.

Steve MacLaughlin from Blackbaud offers us a review of online giving trends in 2009, writing for NTEN, with a slant toward larger nonprofits using Blackbaud products.  An analysis of the past 36 months of online giving continues to show positive growth despite challenging economic conditions. Blackbaud’s research found that online revenue grew by 46% in 2009 compared to 2008. The two largest months for online giving were December and May. Even though February was the smallest month for online giving, the first three months of 2009 had a 60% year-over-year growth rate in online revenue.

The final three months of the year represent the largest amount of online giving to nonprofit organizations. In 2009, 46% of online revenue was processed during October, November, and December. The month of December accounted for 30% of revenue and 18% of the transaction volume. The average online gift in December 2009 based on Blackbaud data was $244. This was a decrease of only 2% compared to December 2008. Another very positive sign was that online giving in December 2009 grew 32% compared to December 2008.

The average online gift in 2009 was $144, which represents a 5% decline from 2008, but remains significantly higher than other fundraising channels.

Putting 2009 behind us, here are my thoughts for online fundraising trends to look out for in 2010:

* There will be substantial growth in the number of smaller gifts, particularly as more people make gifts using mobile and social media tools.
* Online appeals of all kinds (email, social media, mobile) will continue to grow as more organizations test the waters of digital fundraising.
* Recurring gifts will be a growing portion of online giving, as donors want to continue to support the charities they love, but want flexibility to spread out their gifts.
* Year-end gifts will continue to account for a substantial percentage of total annual contributions.
* Multi-channel fundraising will be reborn as organizations weave together the online and offline into real-time Web fundraising events.
* Peer-to-peer fundraising (raising money from friends) will expand, as volunteers and donors are called upon to expand outreach efforts to raise money for causes they care about.
* Video will expand as a fundraising tool, since it increases responses rates, in spite of higher production costs.
* Mobile fundraising will continue to grow, but in limited circumstances such as stadium events and disaster relief.
* Social media will grow as a fundraising platform, driving small gifts in larger numbers.

There is little doubt in my mind that the next few years will offer some big opportunities for digital fundraising.  The continued growth in the use of smart phones, the arrival of tablets, and the convergence of the Web with televisions will provide some exciting new terrain for charities to experiment with rich media messaging and interactivity.  The digital fundraising revolution has many more chapters to come.

Continue Reading