What we learned about multichannel fundraising from raising money at year-end

Although it seems like eons ago, our team at Mal Warwick | Donordigital is still taking stock of what the year-end giving trends mean for our client programs, and for nonprofit fundraising as a whole.

Many programs we manage experienced strong revenue growth in their online channel, driven by Giving Tuesday, as well as other tried-and-true techniques such as matching gift challenges, website lightboxes and homepage takeovers, improved donation pages, an increasing volume of email appeals, better mobile optimization, advertising and retargeting, and coordinated social media engagement.

It will take a bit longer to see the full results of the direct mail efforts, but we know that this channel will continue to provide a lion’s share of overall direct response revenue – and will for many years to come.

While integration still may feel challenging in actual implementation, this year-end season reinforced for me the power and necessity of integrated fundraising for overall program success. Here’s why:

  • We saw a big surge in direct mail donors going online to make their gifts, including the use of custom URLs. The upcoming match-back analysis we’re performing for many clients, will clarify how big this mail-to-online effect really is.
  • Targeted email messages to individuals receiving direct mail appeals reaped high response rates and average gifts. Even when these groups were small, response rates were often triple the average email response rate and revenue per email sent was very high.
  • New targeting tactics allowed for a fuller experience and supported all efforts. Facebook ad targeting of email lists members and direct mail donors served impressions to individuals primed to give – a tactic we know helps overall fundraising. In addition, many of these campaigns generated enough gifts to cover the modest costs of the efforts.
  • It’s about the donor experience! The multitude of email messages from my favorite charities I received in December was immense. But I remembered those that reinforced that message in the mail, in email and social media. I knew what I wanted to give to and why!

How can you measure the effects of your integration efforts?

  • At Mal Warwick | Donordigital we carefully track multichannel giving shifts between the online, mail and telemarketing channels through a careful analysis of donor data, and do this bi-annually for many of our client programs. The shifts in giving channels often reflect not just changing donor trends, but also changing investments that the organization is making to grow each channel. Most importantly, it allows us to create strategies that prioritize multichannel conversion.
  • Multichannel giving analysis allows us to identify donors’ origin source which informs our recommendations for acquisition investment. Based on first gift, who is most likely to convert to another channel? How does the ROI compare for different origin cohorts? What we see consistently is that a higher percentage of online generated donors cross over to also give in the mail, than the reverse. This trend points to the importance of having a mail program that can work seamlessly with online.
  • We’ve seen a dramatic increase in donor value when our clients convert single channel donors to multichannel giving (especially direct mail donors to online). We also see much higher upgrade rates to $250 or more from donors who are multichannel, more conversion to monthly giving and significantly higher retention rates. It’s clear that multichannel behavior has a big impact on donor value and increased attention to an integrated strategy will result in overall revenue growth.

Integrated, multichannel fundraising efforts are yielding valuable results and stronger long-term value for many organizations at year end and throughout the year. The focus of integrated strategy should continue to inspire more single channel donors to convert to cross-channel giving. This in turn will deliver stronger renewal and upgrade revenue to help direct response programs thrive, while engaging supporters more deeply into the organization—and most importantly deliver the best donor experience!

Mwosi Swenson, President and CEOMwosi Swenson is the President and CEO of Mal Warwick Donordigital. She has over 20 years experience in direct response fundraising and is one of the nation’s leading experts in direct mail, online and integrated fundraising.

Paths to year-end fundraising success in a multichannel world

AMC_YE2013-Lbox3-Calendar_FINAL-copyDirect response fundraising should be multichannel. I say this all the time and while direct causation is sometimes difficult to track, I stand by the principle that truly donor-centric communications allow donors to access information in the channel they choose. We also have the data analysis to prove that multichannel donors are the most valuable donors for an organization to have over the long term.

It’s our responsibility to ensure that the messaging is cohesive and coordinated.

In the real world of people opening their mail, answering their phones, and checking their inboxes, a multichannel donor is a person who knows what matters to them, consumes information in a number of ways, and dedicates some time and their dollars to the cause that moves them.

Maybe it was the person that asked them to make a donation, or the photo on that envelope or at the top of that email, or a headline in large font, or simply the timing of an email that was formatted nicely on their iPhone6 while they were waiting on a train platform – whatever the trigger, later that night they remembered to go on your organization’s website and make a donation.

The most important thing about a multichannel donor is that they decide to give and give in a channel different than their first gift. That change and movement to being “channel agnostic” means that they are more likely to give again to your organization and to give a larger amount.

So, how do you embrace multichannel messaging when planning for year-end? The reality is that every detail matters when it comes to achieving year-round fundraising success in a multichannel world. Year-end fundraising is a unique challenge because of the competition for dollars among organizations and a limited number of donors. The sheer volume of fundraising appeals by nonprofit organizations is enough to overwhelm any person who opens their mailbox or their in-box.

As a direct response agency, we’ve learned to adapt and innovate in the unique environment of year-end fundraising. Below is a quick overview to how we approach year-end fundraising success in a multichannel world.

  1. Create a communications matrix that honors the donors’ perspective. Align your channels by reviewing your year-end calendar for mail, email, website promotion and telephone solicitations. Consider how your donor and non-donors audiences will react to getting multiple appeals for funds in different channels. Adopt a donor-centric approach and make sure your appeal calendar is driven by their needs. Honor and accept those things that won’t cross channels (not everything can be integrated!).
  2. Scour your organization for other opportunities to coordinate messaging. These might include newsletters or magazines, direct mail acknowledgment buckslips, welcome kits and welcome series, videos or other online resources.
  3. Segment your audiences carefully and integrate those segments into the communications matrix. Think about the best way to approach each with the correct ask or cultivation. For example, what about those folks that are getting direct mail during the year-end email series? What about those who aren’t? Also plan for coordination in gift asks – although donors will often give higher gifts online, it’s important to keep gift strings similar across the channels.
  4. Fundraising techniques aside, it’s the content and messaging that you create that will drive your supporter’s attention span and engagement. Donors want to be asked and inspired to make a year-end gift. Take the lead-time you need to produce engaging content that can span across direct mail appeals, emails, videos, year-in-review annual reports, holiday cards, infographics and more. Remember, donors have short attention spans (especially online donors), so highlighting key points are important whatever the channel – direct mail letter P.S. content, reply devices, and email masthead and sidebars, to be exact.
  5. Carefully consider your email calendar in December so you can create the right cadence for your supporters. One message per week and then an increasing number the last few days is the new normal, so jump on board and craft an authentic email series that inspires your supports to give. Consider the dates that your mail will reach donors in-home and if the content is complementary.
  6. Acknowledge the multichannel touches – we often reference or show a visual of a direct mail package that the donor is receiving in an email message. And we’re careful to strategically include dedicated URLs in direct mail packages if donors want to make their gift “immediately online.”
  7. On your website, be sure to use your homepage carousel or above-the-fold content areas to highlight the theme of your year-end campaign online and offline. It’s common for supporters getting your mail to visit your website to make their year-end gift. Deploy a lightbox on your website to catch the attention span of your visitors.
  8. Use paid advertising channels at year-end to reach your supporters wherever they might be. Search engine marketing, Facebook ads to custom audiences, and remarketing to visitors of your website or your donation pages can play a vital role in creating visibility for your year-end campaigns, and increase year-end giving across all of your channels.
  9. Make it social! Using online social networks at year-end is vitally important to connect with the attention span of your supporters. Dedicate staff time to posting year-end content on social media channels, and schedule coordinated tweets and posts on all channels. In your emails and on your Web pages make it easy for your supporters to spread the word about your year-end campaigns.
  10. Keep testing and trying new things. Every audience is different which means it’s vitally important to test to see how your audience responds to multichannel tactics.
  11. Don’t neglect January as an important time to thank donors—across all channels—for their year-end support.

Multichannel fundraising does require more effort and resources. But the end results is cohesive messaging and a larger group of dedicated donors.

photo-thumbnail-mwosi-2Mwosi Swenson is the President and CEO of Mal Warwick | Donordigital. She has worked in direct response fundraising for the past 20 years and has managed the direct mail, telemarketing and online programs for some of the nation’s most respected environmental, advocacy, and political organizations.

Measuring your ROI in multichannel fundraising campaigns

In our newly evolving multichannel nonprofit fundraising environment, the old methods of measuring return on investment have clearly begun to fall apart.  Today’s nonprofit fundraiser can choose from a multitude of channels to invest in – and each channel can have different cost structures and produce different types of donors and returns.

This complexity makes it even more critical to be able to understand – and measure – the return on your fundraising investments (ROI), so that you can make data-driven investment decisions across channels or across a combination of channels.  The following four steps, detailed in Donordigital’s Measuring Your Return on Investment in Multichannel Fundraising Campaigns, will help you measure return on investment across multiple fundraising channels.

STEP 1: ESTABLISH THE GOAL

Fundraising efforts can have benefits far beyond dollars for a nonprofit organization.  In spite of the capabilities for multichannel fundraising efforts to engage individuals to become advocates, activists or volunteers, it is recommended that – for the purpose of calculating return on investment for fundraising efforts – the following standard should be used: The goal of fundraising investment is to produce revenue in the form of donations that have cash value.

Of course, this doesn’t mean you should never invest in efforts that can’t be measured, or that you must produce equivalent revenue in all channels.  But it does mean you should make those investment decisions after you have prioritized and optimized investments you know will have a measurable return.

STEP 2: START WITH THE “I” IN ROI – DEFINE YOUR INVESTMENT

To be completely accurate in measuring fundraising investment, you would need to count and distribute the costs of a thousand different items – the cost to turn the lights on every morning, the salaries of everyone on your staff, the money you paid for the sandwiches at your last brainstorming retreat.

However, calculating expenses to that level of detail is not feasible given the limited time and resources available to most fundraising programs. Therefore, consider the following two standards in determining levels of fundraising investment across channels:

1. Count the direct costs of initial and subsequent efforts.

Direct costs should include all expenses incurred specifically to make the effort possible.  Examples of direct costs include:

  • The cost per contact for a phone campaign
  • The cost of paper, printing, list rental and postage for mail efforts
  • Online advertising and list rental costs

2. Count only those indirect expenses that are outside your usual cost of business.

A robust fundraising program incurs many costs that are not directly attributable to any one effort. But most of these expenses can be considered a cost of doing business, independent of any single fundraising effort. You will not take down your organization’s website, throw away your database or stop thanking individuals for gifts if you decide not to perform a new donor acquisition effort this fall.  Therefore, taking the extra effort to assign these expenses across different fundraising efforts is most likely not worth the effort – and will not help you make strategic decisions about which channel to invest in.

STEP 3: UNDERSTAND THE “R” IN ROI – CALCULATE YOUR RETURNS

Based on step one above, the calculation of returns becomes a whole lot easier. Because your goal is to raise dollars, the return on your investment is simply the dollars you raise.  As with tracking costs above, this can be done most easily at the donor or prospect level through the following steps:

1. Assign an origin effort to every donor or prospect you acquire.

This should be the effort that first identified the individual as a likely donor to your organization.  It could be an online action based on a click through from a banner ad or a piece of return mail from a direct mail acquisition effort.

2. Measure all initial and subsequent revenue from that donor or prospect.

This would include all direct gifts made by the individual, including the initial gift to your organization.

STEP 4: MEASURE THE MULTICHANNEL RETURN ON FUNDRAISING INVESTMENT

Once you have measured your investment and determined your return, measuring ROI is easy.  Simply divide total revenue returned by the total of the initial and subsequent costs.  You can measure this ROI as a percentage – with 100 percent ROI meaning you have gained a dollar for every dollar you spent. Or it can be phrased in terms of dollars – for every $100 you spent, your return in donations is $100.  Here is an example:

  • You spend $10,000 on an online campaign that acquires 5,000 new prospects.  Over the next 12 months, you send these prospects 25 emails at $0 expense, two phone campaigns that cost $4.50 per contact for 500 contacts, and three direct mail campaigns at $0.50 each. That means your total expense is $10,000 + $0 + ($4.50 x 500) + (3 x 5,000 x $0.50) = $19,750.
  • Over the same 12 months, 250 of the 5,000 prospects convert to donors, giving a total of $21,250.
  • The ROI for the online campaign = $21,250/$19,750, or 108%.  In other words, for every dollar you spent, you raised $1.08.

Measuring ROI in this way means rigorously tracking all of your campaigns and donors, and being able to assign costs and revenue to the proper effort.  However, to determine how much money to invest across competing channels, it is impossible to make the right decision without doing this legwork.  And, in today’s environment, it is imperative to measure return on investment in an equal way across all fundraising channels in order to ensure the long-term health of your organization.

This article was originally printed in Philanthropy Journal.

Peter Schoewe is Director of Analytics at Mal Warwick|Donordigital.  Schoewe brings over 15 years of direct mail and multi-channel fundraising expertise to explore how best to optimize integrated fundraising programs.