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Nonprofits Investing in Digital Channel Experience Growth

As more organizations are turning their fundraising focus to digital channels and media, one of the questions I hear frequently is, “How much of our budget should we allocate to digital versus our more traditional offline channels? And what return can we expect from that investment?”

To help nonprofit marketers answer those questions, Merkle conducted a digital benchmark survey with 79 nonprofit organizations, each with $10 million or more in annual revenue, to assess their commitment to online fundraising and explore related trends.  This post includes some of the most poignant findings from that study, as described in the Digital Roundup: 2017 Online Fundraising Benchmark Report.

According to the report, the average organization dedicated about 16.2 percent of its overall budget to online fundraising efforts. This investment resulted in about 15 percent of their total direct response revenue. In recent years, other industry benchmark studies have reported online revenue making up about 5-10 percent of overall revenue. So for nonprofit organizations, online investment steadily produces more revenue as their constituent base increasingly responds to email and web-based interactions.

The future of online fundraising

For most of these organizations, online marketing efforts include email, mobile, and digital advertising. Email continues to be a cornerstone, with the average nonprofit generating about $3.0 million in annual gross revenue from an average list of about 389,000 subscribers. For digital advertising, most organizations are utilizing about 15% of their total media spend to fund their own unique mix of paid search, display, paid social, and video advertising.

Organizations investing new funds or reallocating budget from other channels into digital advertising are seeing a cost per dollar raised (CPDR) of about $0.36 for acquisition and renewal. Most groups are focusing spend on top of the funnel (awareness and consideration), with the mid and lower funnel spend a secondary priority.

To learn more about nonprofit trends and results of investing online in email, mobile, digital advertising, channel integration and more, view our on-demand webinar, Embracing the Next Generation of Fundraising or view the Benchmark Report.