First, the results:
We’ve been talking for a while about how this year-end could be the most disruptive — and the most dramatic — we’ve ever seen. We’re pleased to report that the largest-ever number of clients saw seven-figure revenue growth in their fundraising from 2019 from both a percent and raw number basis. Unsurprisingly, organizations working in human services and on the front line of the COVID-19 crisis significantly over-indexed for this growth.
At best, this growth came in at an additional $8 million for one client. Others doubled their digital revenue, some even more.
While not everyone benefited from this incredible success, the vast majority of clients had a very successful 2020 — especially given where our heads were back in March of last year. It wasn’t the easiest of journeys for some. Some organizations with a smaller brand presence — who may have been the second or third organization a donor supports — saw a smaller response. In general, domestic organizations scored more wins than international organizations, although there are notable outliers in that trend. Many clients saw less revenue via SMS (potentially due to a high volume political SMS schedule) and a slower uptick in giving on the 26th and 27th of December (potentially due to these days falling on the weekend). Thankfully, the rate of giving picked up in the final few days of the year. In addition, we may have witnessed some “political donor” fatigue — and will be looking to see if the data shows that election donors were “tapped out” in December.
We’re still surfacing the common themes and learnings from this year but we’re pleased to share some initial thoughts about what this means, and what’s next.
The analysis:
1. We’re really looking forward to getting a full understanding of how direct mail revenue changed this year. Did this digital boost come from a channel shift, or increased generosity? Our guess is that both are true, but we hope to better understand the long-term impact of consumer patterns and preferences now that a pandemic-fueled “digital new normal” is being established. This is a vital equation we need clarity on as it’s likely that digital acquisition over mail based solutions will become ever more compelling this year.
2. While email remains a vital channel for many of our accounts, it’s becoming evermore dangerous to think in channels rather than in experiences. In general, we saw increased efficiency in the core email metrics – which was undoubtably driven by some effective and creative ideas – but also because we had to deploy stricter audience targeting to preserve long-term deliverability scores. Gmail and Microsoft products poised some challenges on getting messages placed in inboxes, which we will need to continue to monitor. As email’s reach declines (in part due to stricter deliverability requirements), our entire industry needs to be more thoughtful about: (1) How email revenue attribution is made and (2) how we create cross-channel experiences for donors.
At the moment, too much of our measurement technology is based on last-click attribution models, which overvalues mediums like email and SEM and undervalues higher-funnel activities. For digital to fully maturate, we need a better understanding of those higher funnel-interactions and invest in them more aggressively.
3. How sustained will increased donor generosity be? With the COVID-19 vaccine rollout beginning to gain steam, and with the prospect of a “roaring 2020s,” how will giving change in the coming months? More specifically, how will COVID-acquired (or reactivated) donors behave over the next 36 months? Should we think of them akin to Emergency Donors, or something else? Many non-profits will have to answer big questions on how they treat this new cohort – who have the capacity to generate significant revenue in the near and long term if they are communicated with respectfully and brought into the broader mission of your organization.
4. For a while we’ve been alarmed by the increasingly “spammy” tactics in the political realm, and we’ve seen them show up in the non-profit fundraising space. We think this is dangerous and will cause long-term damage to donor trust in the progressive/charity sector. In addition, a matching gift offer is losing its impact in a sea of questionable “10x match” offers and the like.
5. What happens when the stock market stops booming? What goes up must come down – and despite quantitative easing, we may not see the stock market continue at its current rate of expansion. We encourage organizations to hurry up and focus on giving products like recurring and mid-level programs. It’s also smart to secure DAF and stock transfer gifts while the market is over-performing. In addition, given the increase in property value, you may want to make further investments in your legacy giving programs.
6. What does the new normal look like in the post-vaccine world? To what extent do we transition back to our traditional activities, and indeed, what fundraising programs should we confine to the COVID dustbin? For example, if you’ve relied on a big ticket gala fundraising model, but have seen income boosts in your grassroot fundraising, where does your future lie? Or if you’re a volunteer-based organization that hasn’t been able to offer in-person events, how can we recapture the pre-COVID enthusiasm for your events? Will donors be more skeptical of channels like face-to-face street fundraising? In addition, how might you take the new innovations from 2020 (like Zoom Fundraisers) and incorporate them into your fundraising mix so you can maximize revenue, no matter where the donor geographically lives?
We believe that one of the core lessons from the COVID-19 crisis is going to be around the importance of diversifying revenue and risk. That’ll primarily mean a greater emphasis on digital channels, as the barriers to entry and indeed scale are lower than in offline channels. But ultimately, if non-profits are going to rise to this moment, they need to ask themselves the hard question: Are we organized in a way to put our donors and supporters at the heart of our work, or are we structured based primarily on our internal processes?
Our challenge to you is to take the experience of 2020 and use it to build evermore resilient and authentic organizations. And as always, reach out to us if you want help in figuring out what your post-COVID future looks like. From all of us here at Blue State: We hope all of the causes you serve have had a very profitable end to 2020!