Online Tools Continue to Drive Value in Today’s Economy

Convio, Inc., has just announced the results of its annual Online Marketing Nonprofit Benchmark Index Study. Viewed by many as the de facto standard for measuring online results for nonprofits, this year’s study indicates that online engagement – whether it is fundraising, advocacy or building a constituent database – continues to see positive growth even in a down economy.

“Results from the 2008 study indicate that online engagement continues to play a vital role for nonprofits, especially in this economy,” said Gene Austin, chief executive officer of Convio. “Compared to traditional marketing and engagement channels, online marketing and fundraising held up well. The study results prove that online marketing should be a key component of any nonprofit organization’s strategy to raise money, empower constituents and build a solid database of donors and supporters.”

The study is designed to help nonprofit professionals evaluate beneficial online marketing metrics, evaluate the effectiveness of their organization compared to similar organizations and determine strategies for future success. This year’s study analyzes data compiled from 597 nonprofit organizations, representing millions of online interactions and transactions from Convio’s Software as a Service (SaaS) system. The study aggregates results into benchmarks that nonprofit organizations can compare against their peer group and the industry as a whole. In addition the study provides separate benchmarks for 14 nonprofit industry sub-groups, or verticals across 21 key metrics.

Key findings of the study include:

  • Positive Year-Over-Year Growth in All Areas of Online Success: 2008 saw positive year-over-year growth in all the key areas of online success – online fundraising, email file growth and website traffic. This is in contrast to reports that indicate traditional direct mail led engagement and fundraising growth declined in 2008 overall and especially in the fourth quarter.
  • Web Traffic Continues to Expand: Average monthly website traffic grew year-over-year at a rate of 20 percent. This growth is important since a charity’s website is often the first touch point between an organization and individual. When used effectively, it can convey the importance of an organization’s mission, help register new constituents and generate desired actions such as making a donation or signing a petition.
  • Email File Growth Continues to be Strong : Email file growth grew at nearly 28 percent from 2007 to 2008. The number of email addresses on file has a direct impact on an organization’s ability to communicate with, cultivate and solicit actions from constituents. Generally speaking, the larger an organization’s communication reach, the more constituents who are available to help them reach their goals, whether that is raising more money, mobilizing more advocates, or simply increasing awareness.
  • Increase in Number of Gifts Drives Online Revenue Growth: A 14 percent growth in online revenue was fueled by a 14 percent increase in the number of gifts nonprofit organizations received in 2008. With traditional fundraising channels experiencing challenges in 2008, online fundraising remains a growth engine for many organizations.
  • Large Organizations Outperform Smaller Counterparts: Large organizations seem to be faring better in the recession than smaller organizations as seen by the fact that they raised seven times more money on average for the full year and raised 11 times that of smaller organizations during the fourth quarter of 2008. This growth can be attributed to the strength of their brands, as well as the fact that they typically have more resources and experience than their smaller counterparts to execute multi-channel campaigns. As smaller organizations increase their online sophistication, study authors believe there is an opportunity for smaller organizations to close this gap.

Special Consideration: Fourth Quarter 2008

Given the intense downturn in the economy in the fourth quarter of 2008, the authors of the study paid special attention to results in that quarter, in addition to their year-over-year analysis.

Overall nonprofits experienced a three percent growth in online revenue in the fourth quarter of 2008 rather than a contraction like many expected. This growth, compared to the 18 percent growth for the whole year, indicates that the economy did have a significant impact on online fundraising during that period. Again, large organizations bucked the trend by experiencing growth that was 11 times the industry average.

“Online tools continue to play a very important role in the success of nonprofits, especially as many of them see negative growth via traditional channels,” said Vinay Bhagat, founder and chief strategy office for Convio. “The results of the survey also indicate that organizations that are engaging donors through multiple channels are better positioned to weather the current economic storm and build lasting relationships. The fact that we are seeing more online donors, even though the sizes of the gifts are flat, could bode well for the future. Organizations must focus efforts on stewardship and engagement so that these individuals remain committed as we come out of the economic downturn.”

The complete findings of this report are immediately available to Convio clients and partners in Convio’s Online Client Community. An executive summary of the findings is available to the public.