Katya Andresen, Network for Good's Chief Operating Officer, attended M+R's presentation of its 2010 eBenchmark study of online outreach with NTEN in Washington, DC. The following is her take on the study, from her Nonprofit Marketing Blog.
I encourage you to review the whole report, but the most striking finding for me was how well small nonprofits did online compared to larger organizations. (Small is defined as an organization with a list size of under 100,000, Medium, 100,000-500,000, and Large, 500,000+ deliverable email addresses.)
- Small organizations saw an increase in online giving in 2009 (up 6% in dollars), driven by an increase in average gift size-this while large groups saw both their number of gifts and average gift sizes decrease (down nearly 4% in dollars) -at Network for Good, which serves mostly small organizations, our average nonprofit raised 20% more!
- Organizations with small list size (under 100,000) had DOUBLE the email response rate for fundraising compared to other groups.
- Small groups also had higher click-through rates and open rates on their emails (20% open rates compared to 14% across all groups, DOUBLE click-through rates compared to other organizations). This is good news because the largest difference between high and low performing email programs in the study was seen in email click-through rates. The study authors urged nonprofits to work to improve your click-through rates.
- Small groups grew their list sizes at double the rate of bigger organizations (likely due to the fact it's easier to achieve a strong rate of growth when starting small)
The only downside? small groups also had double the unsubscribe rate of their larger peers. Though M+R noted this is not necessarily a negative-small lists performed really well on fundraising appeals, so the high unsubscribe rate for small groups may be the result of a more attentive list - which is a good thing!
So what does this all mean? I asked that very question of Steve Peretz from M+R. Here are the thoughts of the study authors:
Small groups are getting greater ROI from their online outreach
This may be because small groups tend to have more engaged lists. A higher percentage of their lists are people who came to them, signed up on their website or otherwise signaled interest in the organization. Big groups may have bigger lists - but often there are more disengaged folks from lists that were traded or bought. They end up with a less passionate file.
I asked if M+R had seen this every year - but this is the first year they have broken out nonprofits by size, so that's an unknown.
Smart nonprofit marketing people are always saying it's list quality, not quantity that matters, and this is an interesting illustration of how a small but passionate core is better than a massive list of mildly interested folks.
Another interesting finding was when it comes to the share of online revenue attributable to different types of gift programs - such as monthly giving, one time gifts and tribute gifts - the study "showed marked differences across sectors. Whereas Environmental nonprofits in our study raised 96% of their online revenue from one-time gifts, Health nonprofits raised 50% of their online revenue from "other" gifts (including event giving) and tribute gifts, and International groups lead the way through monthly giving, which made up more than 25% of their online revenue."
Here are other highlights from M+R:
- The average study participant sent 4 emails per subscriber per month, but Environmental nonprofits sent their subscribers 5.2 emails per month, while Health nonprofits sent just 2.1 emails per month, on average.
- Email fundraising response rates were .13%, and email advocacy response rates were 4.00%.
- The average gift size for a one-time online gift was $81.33.
- Annual email file churn was just under 17%.
- Online fundraising grew overall by 4.5% between 2008 and 2009.
- For half of the nonprofits in our study, online revenue either held steady with 2008 or declined. This decline was driven by a drop in the average gift size.
Last, some attendees noted the results of this study were different from Convio's recent study and were asked about why there were some discrepancies. They said it may be that Convio has a different set of nonprofits on its platform - including more, smaller, ones. I'd like to hear Convio's thoughts on that at some point.