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A couple weeks ago, we indulged in a few quick bites of end-of-year fundraising data. We reported on some of the variability between nonprofits, the continuing importance of email, and the success of paid search advertising. Our bouches were amused — but of course we wanted more.
Now that we have had a chance to crunch the numbers, here is the entree course: the most important trends we saw in December, 2021. (And for those of you who would like to read the Nutrition Facts before digging in, there’s a quick note on methodology at the bottom of this post.)
OVERALL ONLINE REVENUE
The median nonprofit saw their overall online giving decline by 1.74%. That’s not the kind of growth we all want to see, but it’s not exactly a disaster — effectively, revenue was flat year over year. But as usual, the simplicity of the topline number conceals important and interesting complexity underneath.
First off, the change in the number of gifts, year over year. From 2020 to 2021, among this group of nonprofits, the number of gifts declined by nearly 10%.
However, that decline was almost entirely offset by significant gains in average gift size for most nonprofits. Our clients saw their average gift go from $93 to $110 — an increase of nearly 20%. We saw this increase in average gifts carry across all online giving, email revenue, AND online advertising — it was true everywhere we looked!
This is the sort of across-the-board shift that is unlikely to be driven by individual nonprofit strategy. When we see average gift grow across issue areas and platforms, we should be looking to global conditions — changes in the economy, the state of the pandemic, the political environment — for answers.
As we looked to specific channels, we did see a bit more divergence, with potentially more influence from messaging, audiences, timing, offer, and other strategic and tactical choices.
For the 15 nonprofits who were able to provide complete email data, email performance tended to be a bright spot in their end-of-year results.
- Email revenue increased by an average of 7% from 2020.
- The number of email gifts increased by 1.6% — which might not sound like something to write home about, but remember that the total number of online gifts across all channels declined by 10%.
- The median average gift from email at end of year went up by nearly 10% — contributing to the growth in overall revenue from email.
- The median nonprofit reported that 33% of all online end-of-year revenue was sourced directly to email.
The context for these improved email fundraising results is (almost) as interesting as the results themselves: the average number of appeals dropped from 17 in 2020 to 15.5 in 2021. That means that nonprofits sent fewer emails and still generated more gifts and higher revenue. While every program is different, that kind of outcome is typically a testament to successful subscriber acquisition, improved targeting, quality messaging, and smart tactics.
As with our annual Benchmarks Study, our goal here is to report on the largest dataset we can in order to provide useful averages and overall trends. But let’s forget about that for a second, because one nonprofit broke out results in an intriguing way and we can’t resist sharing.
This analysis took a look at digital revenue from email subscribers at end of year that was not sourced to email. That is, folks who are subscribers and received email appeals in December, but gave through some online channel other than clicking an email link. Including these other channels in the reporting doubled the amount of end-of-year revenue attributed to these subscribers.
This other digital revenue may have been coming in through organic sources, search, other online advertising, or people who simply typed in the URL and went directly to the donation form. This finding is consistent with our experience: the value of an email subscriber — and the potential impact of an effective email program — goes beyond what is captured by revenue directly sourced to email clicks.
There are two ways that nonprofits commonly track digital advertising revenue: last-click and view-through. If we evaluate by last-click — counting only donations sourced from a click on a digital ad that landed directly on a donation page and resulted in a gift — revenue increased by 11% from 2020. If we evaluate by view-through — including all revenue from a user known to have been served an ad, even if they arrived at the donation page through some other means — digital ads revenue increased by 13%.
As with the overall revenue findings, the number of gifts declined by 15% (both click-through gifts and view-through gifts), but that was offset by more than equivalent gains in average gift size.
On average, nonprofits in our data set increased their investment in digital advertising by 21% from 2020 levels. Increased costs — and in many cases, decreased performance — were especially notable in social advertising, especially Facebook.
As we noted in our previous end-of-year round-up, the change in results for Facebook were largely attributable to Apple’s new privacy settings. Nonprofits whose display programs were optimized had an easier time adjusting to that change, and search was the big winner in 2021. Most digital advertising programs relied on a mix of social, search, and display, and many included video (especially YouTube). Other platforms that some organizations added to the mix this year included Connected TV, incentive advertising, audio advertising, and native advertising.
BORING DETAILS EXCITING METHODOLOGY DETAILS
This analysis looks at data from 22 of the nonprofits who we worked with on end-of-year fundraising. It includes a mix of organizations that work on topics ranging from international relief to health to environmental issues.
For our overall analysis, we included only one-time gifts — ongoing monthly revenue is not included in those numbers, and all gifts are in the months of November and December. The averages we report for each metric are medians — they represent the middle nonprofit out of all those which provided data. This helps us avoid having averages skewed by a single participant that saw extraordinary growth from previous years (you know who you are).
If all of this data just whetted your appetite for MOAR, please sit tight — we are currently cooking up our full 2022 Benchmarks Study, which will be released in April. And if you really like data, messaging, and strategy, check out our job openings.
Sarah DiJulio is a Partner at M+R. When Sarah’s not at work (and there’s not a pandemic), you can usually find her with her two boys hiking the Billy Goat Trail, swimming at the pool, or exploring the Museum of Natural History. You can reach her at email@example.com.