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How to ensure your institution benefits from the online giving boom

The COVID-19 pandemic fundamentally altered the way that many of us live.

E-commerce sales, for example, accounted for 14% of total retail sales last year—a 3.0 percentage point increase from 2019—thanks in part to the significant uptick in online grocery sales, which soared 54.0%. Similarly, online giving reached its highest share of total giving on record, according to recently released The Giving Institute’s “Giving USA 2021: The Annual Report on Philanthropy for the Year 2020.”

Depending on whether you look to the 220 nonprofits examined in the recently released M+R Benchmarks 2021 report or the 4,964 nonprofit organizations examined in a recent Blackbaud report, online giving rose either 32% or 20.7% year over year. Online giving grew in size, gift amounts, retention rates, and the overall percentage of giving in 2020, according to Blackbaud. Those gains meant that 12.9% of total fundraising stemmed from online giving, marking the first time that online giving accounted for more than 10% of total giving.

We are living in a distinct cultural moment in which much of our life has shifted online. While some organizations that saw online donations rise were well-positioned, many had bootstrapped digital fundraising operations. But as the end of the pandemic comes into sight, nonprofits would be well-served to increase their investment and focus on digital fundraising. In doing so, they can ensure that online giving plays a significant part of their mass fundraising mix.

A long-term shift

The growth in digital fundraising was evident across the board.

Nonprofit organizations of all sizes had positive online giving growth in 2020 compared to 2019, according to Blackbaud.

  • Large organizations, with total annual fundraising of more than $10 million, had an increase of 15.0% in their online fundraising in 2019.
  • Medium-sized nonprofits, with total annual fundraising between $1 million and $10 million, had an increase of 24.9% in their online fundraising.
  • Small nonprofits, with total annual fundraising less than $1 million, grew their online fundraising 22.3% compared to 2019.

Moreover, the pandemic amplified an already-existing trend: a longitudinal three-year view of fundraising from the same organizations revealed a 32.4% increase in online giving.

We know that evolution occurs in bursts, cementing in place long-term shifts. It is entirely possible that online giving is one behavior that could be normalized. It is also clear there is a significant potential for people to give a lot more online. But that will only happen if institutions find ways to drive donors to give online.

Initiating change

When we look at 2021 M+R Benchmarks Study, we can’t help questioning how much better the results could have been if most nonprofits’ websites were better. Specifically, we question how much the results could have been when we see that the page completion rate—the share of nonprofit email recipients who land on a donation page and then complete a gift—was just 18% for fundraising messages. That’s roughly in line with where it has been for each of the past five years. Previous M+R benchmarking studies suggest that the page completion rate is the only reliable predictor of a fundraising email’s success.

We also look at the difference in page completion rate between donors and prospects. Among donors, it is 32%, while it is just 8% for prospects. That’s despite relatively minor differences in donors and prospects’ open and click-through rates (22% versus 18%, 1.6% versus 1.7%).

The stark difference in page completion rate suggests that there’s friction standing in the way of prospects completing their transaction. Donors are more likely to have their payment information stored online, making the donation process simpler. Donation pages may lack sufficient content or context to convert a prospect, while a donor already understands the need.

Furthermore, we know that mail is now a significant driver of online giving, with more than half of the responses to direct mail appeals now being fulfilled online.

So for a nonprofit looking to achieve significant growth in its broad-based fundraising, its best place to start in the 2020s may well be to rigorously examine its landing and donation pages.

Rethinking design

When an institution is beginning to question whether it should rethink the design of its online giving pages, we often ask the following questions:

  • Do you know their own page completion rate?
  • Do you know how many visits to donation page end up with a transaction?
  • When designing your donation pages—is conversion or likelihood to convert a factor in designing the page?

Too often, the answer to those questions is no, because other factors—such as satisfying the wishes of internal stakeholders for representation—take priority rather than those most likely to secure a gift.

Take, for example, the landing page. We know copy on a landing page reinforcing the appeal the donor just saw improves conversion rates. If someone clicks on a specific email appeal, then clicks and lands on a general page, it creates a disconnect. That’s why it is best practice to create distinct landing pages for each appeal.

Another area to consider are the number of fields requested in a form, which is something Adrian touched upon in a previous article that examined what nonprofits can learn from GoFundMe.

We encourage our clients to ask for the fewest possible fields, such as first name, last name, email, and credit card number. They can then leverage their backend system to match donors. For those they don’t identify, they can have a donor welcome process, such as a post-donation survey to gather more information. This is in any case a best practice for online donor retention.

Leveraging the power of online platforms

One of the most powerful elements of the internet is that it makes it easy to test. Nonprofits can examine everything from the color of their donation buttons to their email copy to determine the best way to drive people to give. Unfortunately, that’s an approach too few institutions are taking.

In part, the lack of testing strategies stems from the platform providers that most nonprofits use, which make it difficult to test with. Providers need to work with nonprofits to bake continuous testing into their platform offerings.

After all, institutions that can crack the conversion puzzle will see their online giving income skyrocket.

 

If you would like to discuss your institution’s online giving strategy, contact Adrian Salmon at ASalmon@grenzglier.com or Pete Lasher at PLasher@grenzglier.com.

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About the authors

Adrian Salmon

Vice President

Adrian Salmon, Vice President, GG+A Europe, brings 20 years of direct-marketing fundraising experience in the higher education, arts and culture, and wider nonprofit spheres. His particular expertise includes direct mail fundraising, annual giving program management, and management of contributions from integrated mail and online appeals.Before joining GG+A in 2015, Adrian…

Pete Lasher

Senior Vice President

Pete Lasher, Senior Vice President, brings to the firm more than 25 years of successful fundraising experience, including leadership of five separate billion-dollar capital campaigns at both private and public institutions in the US. As a consultant, he currently advises universities in North America and the UK that are in…