A recent study by McKinsey found that the COVID-19 pandemic has sped the use of digital technologies by several years.1 This is due to consumers flocking to digital channels to communicate with friends and families, meet their everyday needs (like grocery shopping, working out, getting a doctor’s appointment) as well as support their communities through charitable giving.2 The pandemic has also forced us to become more digitally literate; grandparents have mastered video conferencing to stay connected to their families, while children, parents, and teachers are online learning.
Needless to say, this trend means that nonprofits have an excellent opportunity to reach out and strengthen connections with donors through digital channels. So, how is your organization leveraging digital to engage and grow your donor base? What barriers are preventing you from activating digital channels?
Taking the leap into digital can be intimidating. In this post, we’ve outlined some common challenges preventing many organizations from taking the first step and provided steps to getting started on the right path.
1. Establish a culture of data
Now is the time to increase your organization’s digital literacy and drive more engagement and revenue. For digital marketing to flourish, your organization must value data. Today’s donors expect relevant and personalized interactions with the charities they support. Without accurate, comprehensive data, nonprofits cannot deliver on the expectation of personalized campaigns which generate 5-to-8X the ROI.3
Where does data fit within your organization’s culture? Look internally, and make sure you start and end every fundraising, donor acquisition, or retention campaign planning session with a focus on data—what currently exists, what needs cleansing or enhancement, and how you’ll measure and improve performance in the long term.
2. Break down internal silos
Let’s be honest; silos exist at organizations of all types. Whether these are “people” silos, “technology” silos, or “data” silos, it’s time for those walls to come down. A great way to begin this process is to organize cross-silo dialogues. According to the Harvard Business Review, these dialogues can “help employees see the world through the eyes of customers or colleagues in other parts of the company. The goal is to get everyone to share knowledge and work on synthesizing that diverse input into new solutions.”4
A data silo occurs when data is “owned” by one department and is isolated from use by other teams. A recent Forrester report found that 72% of firms said their most significant sales and marketing challenge was managing data and sharing insights across organizational silos.5 Without shared, complete data that informs a single view of your donors, it’s difficult to plan and target digital campaigns that will reach and engage your donors. So, roll up your sleeves, and get ready for some demolition work this year—break down the silos getting in the way of your success!
3. Embrace new channels to engage the next generation of donors
While direct mail is still a crucial channel for fundraising, donor communication preferences are shifting. According to our recent survey of charitable donors nearly half identified email as their preferred channel to hear from charities, followed by direct mail (21%) and social media (17%). What does this tell us? That charities need to future-proof their fundraising programs by employing a diverse channel mix that speaks to the various donor segments in their database. Embrace young donors; they can be invaluable ambassadors for your cause. Younger generations may have less disposable income, but our recent survey found that adults aged 18-44 were 46% more likely to make recurring donations. They were also more likely to volunteer their time and share information about their favorite charity causes with friends and family.
When it comes to recurring donations, young consumers are used to engaging with many commercial brands that have shifted towards subscription, autopay, or installment payment options (think apparel brand Express and delivery service GrubHub launching a subscription model, Airbnb and other hospitality brands offering payment plans for accommodations booked through their sites, and many more). As this trend continues to grow, charities have an opportunity to capitalize on it by emphasizing easy monthly contribution options as part of their fundraising and donor acquisition programs. This approach will help them increase their donor lifetime value and drive more funds to their worthy causes.
Before you begin your foray into digital, you need to establish what you want to achieve and where your organization currently stands.
What are your KPIs? You can’t be successful if you have not defined what success looks like.
What does your current channel mix look like? You know you need an omnichannel mix to engage the next generation of donors. Take stock of where your budget is currently going and what your return on investment for each channel looks like. You can then determine where you can adjust your spend and test out other channels.
How does your digital investment compare to your budget for direct mail and traditional channels? Direct mail is an essential component of any successful fundraising strategy, but our recently released donor survey report revealed cross-channel strategies drive better results due to more varied (and frequent!) touchpoints with donors and more opportunities for conversion along the way.
Do you want to see donations with higher average value, or more recurring gifts through online channels? If your goal is a higher value gift, invest more in the channels used by your high-value customers. If your goal is to drive more recurring gifts, your channel mix will likely look different. Make sure you have the data to make informed decisions.
a. Diversify your channel mix
The first step in diversifying your channel mix is to connect with your direct mail (DM) audience via social, email or programmatic. This will give you the opportunity to reach this core donor group across channels and through a variety of touchpoints which ultimately increases the likelihood of conversion – whether that’s a first contribution, setting up monthly donations, or following you on social.
In order to make a seamless connection from your offline program to your digital ones, you need to ensure your messaging is consistent across channels and your online donation form is mobile-friendly and easy to use. We typically see that social media (Facebook, specifically) drives more direct revenue than display, so if you’re only comfortable starting with one digital channel, give Facebook a try.
b. Avoid analysis paralysis
Nonprofits can get so caught up in determining if a new tactic or digital channel will work for them or which one(s) to try, that they can’t move forward. It takes courage to step outside of legacy models and mindsets, so don’t try to analyze or test too much too soon (especially if you’re working with a small volume or budget).
Image via Pexels © IFAW
c. Measure success
Measuring success could be an entire article on its own, so we are just going to scratch the surface. Depending on your technology stack and the state of your data (knock down those silos!), there are a few ways to measure success during and post-campaign deployment. For example, platforms such as Facebook or LinkedIn allow for pixel placement to track online conversions. A tracking pixel is an HTML code snippet that is loaded when a user visits a website or opens an email. The tracking pixel allows nonprofits to glean how prospective donors behave on your website after they click through an email, a display or Facebook ad, and more.
While media platforms will provide insight into the reach and engagement of your digital campaigns (impressions, frequency, clicks), there are still more analytics you need to know to optimize your program.
Ultimately, you’ll want to know:
Pro-tip: Get comfortable with matchback analysis
The matchback technique is a good way to understand what’s working and what isn’t, specifically when you’re having trouble attributing gifts to a specific campaign. It works by compiling all charitable gifts made in a specific timeframe and matches them back to a campaign that reached each donor. The results of the analysis will give you valuable insights into which channels and lists are truly driving performance.
You’ve taken the leap into digital and successfully launched and measured your first campaign. Shy away from testing for testing’s sake. If your initial results are promising, roll it out!
Over time, you will gain valuable intelligence about your donors’ behaviors, which can inform your media mix and budget allocation. With enough volume and media scale, you can incorporate digital in all of your fundraising efforts.
Beyond the basic campaign-specific response, answer these key questions to plan for future efforts effectively:
1. Do supporters you reach in multiple channels give more often, make larger donations or stay active donors longer?
2. Are desirable younger demographics moving seamlessly through the funnel – from engaging with your content to donating?
3. How do your media channels work together? Can you optimize direct mail campaigns by shifting low-performing segments to cheaper digital media without sacrificing net revenue?
Less talk, more action! 2021 is a great time to bet big on digital and start incorporating it into your fundraising and donor acquisition strategy. Center your organization’s culture around data—combat those data and people silos holding you back. Determine what “success” means for your program. Find the most effective way to measure and attribute performance, and most importantly, define your future fundraising strategies.
Katy has more than 15 years’ experience leading transformative change for top nonprofit brands through integrated, performance-driven direct marketing. She has extensive experience across all media channels and excels at distilling data into intelligence. Always challenging the status quo, Katy has been a changemaker and passionate leader, driving organizational growth and client success in agency, corporate, and nonprofit environments.