May 14, 2009

Email Open Rates, Click-Throughs, Average Gifts All Drop

Online gift amounts declined by an average $15 for all organizations, but local and state-based organizations really took it on the chin, with online gifts dropping an average $51, according to a study released today. 

The segment nearly doubled the average overall growth for number of gifts, but the precipitous drop in average gift is a “big concern,” according to Marc Ruben, co-author of and vice president at M+R Strategic Services, in Washington, D.C.

Ruben explained, “$15 is a huge decrease for average gift - $50 is cataclysmic.”

The 2009 eNonprofit Benchmarks Study results showed while number of online fundraising gifts still had growth for 2008, “considerably” smaller average gifts tempered the overall growth.

Online fundraising grew by 26 percent from 2007 to 2008, but average gift size decreased by 21 percent in the same period, according to a study. It's the first time that the study broke out the local and state-based organizations in a separate segment.

“The buck stops at response rates with online performance,” said Ruben.

The number of online gifts increased by 43 percent from 2007 while the total dollars raised online increased only 26 percent, according to the study.

M+R Strategic Services and the Nonprofit Technology Network (NTEN) in Portland, Ore., co-authored the study, which measured Internet fundraising for 32 nonprofit organizations and analyzed data of 10,000 email messages sent to more than 10 million list subscribers.

Taking cues from economic reports, average gift declines were steepest during the fourth quarter of 2008. The number of gifts increased 30 percent when comparing December 2008 to December 2007, but the overall gift amount only increased 5 percent.

And don’t expect online fundraising to land huge major gifts just yet. Donations of less than $50 increased from 51 percent in 2007 to 61 percent in 2008. According to the study, 97 percent of all gifts were less than $250, but only represented 59 percent of total online dollars raised from study participants. Gifts of more than $250 represented 7 percent of online gifts in 2007, compared to 3 percent in 2008.

Email messaging remains a strong online communication channel with steady response rates from 2007 to 2008, even though open rates declined from 17 to 16 percent and click-through rates declined half a percent to 2.4 percent.

“Social networking isn’t replacing email as the primary way most constituents interact with organizations, and that’s especially true with fundraising,” said Ruben.

The study’s participating nonprofits found that targeted email messaging helps boost response considerably. Previous donors were three times more likely to respond to a fundraising email compared to list prospects.

Holly Ross, co-author of the study and executive director of NTEN, said that organizations have become savvier about targeted communications instead of mass-emailing entire files.  “I think small is definitely the new big,” she said.

According to the study, only 7 percent of subscribers were described as super-activists, those who took six or more online actions in 2008, but contributed almost one-third of online advocacy activity for most organizations.

Ross explained that segmentation optimizes the organization’s email communications and those organizations are “getting better results because they are actually serving those constituents better.”

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This article is from NPT Instant Fundraising, a publication of The NonProfit Times.

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