Hunger and poverty nonprofits drove massive growth experienced in online revenue for charities during 2020 as COVID-19 played a role in fundraising expansion across channels, whether it was online, email or social media.
Online revenue grew by 32% in 2020, including a 173% increase among hunger and poverty groups, compared to the previous year, according to data in the latest M+R Benchmarks Report, released today. Facebook Fundraisers accounted for more than 1.3% of online revenue.
Nonprofits that provided COVID relief, either directly or through advocacy, saw a 40% increase in online revenue compared to a 22% increase for those that did not do COVID work. The difference was driven by a surge in one-time giving to COVID response nonprofits. Those organizations reported a 41% increase in one-time revenue, while non-COVID response nonprofits saw one-time revenue rise by 21%.
“This pattern may seem familiar to nonprofits with experience in disaster response. The urgent desire to help during an emergency can drive a surge in one-time giving,” according to the report. “Converting this attention and generosity into long-term growth requires a commitment to retention.”
Respondents at participating nonprofits were asked if they helped to provide relief in response to COVID-19, either directly or through advocacy efforts; whether they did electoral work in the United States, and was racial justice a primary focus of its work.
“So much of 2020 was centered on three forces: the pandemic, the protests, and the presidency. These were not discrete or mutually exclusive, but on any given day in 2020, some combination of the three was very likely to be leading headlines,” according to the report. “That context determined how nonprofits approached their communications, programs, and strategies. And that context was the lived experience for activists, organizers, voters, and donors.”
Revenue from Facebook Fundraisers increased by 14% overall. The average Fundraiser generated four gifts, with an average gift size of $34. The biggest month for Facebook Fundraisers in the hunger and poverty sector was in April at the dawn of the pandemic while for cultural nonprofits experiencing shutdowns and attendance limits, Fundraisers activity spiked in May.
Nonprofits in the study spent an average of 10 cents on digital ads for every dollar raised in online revenue, which continues to grow, up 33% year-over-year. For example, a nonprofit that raised $1 million online in 2020 spent an average of $100,000 on digital advertising. This is a measure of how much of the total budget nonprofits invested in digital ads — not a return on investment. Cultural nonprofits pulled back on digital advertising investments as COVID restrictions forced museums to close while health and hunger and poverty organizations scaled up early in the pandemic.
Direct fundraising digital ads accounted for 60% of all ad spending. Branding, awareness, or education ads accounted for 25%, and lead generation for 14%.
Return on ad spend was highest for search ads ($4.78), followed by social media ($1.05), display ($0.38), and video ($0.27). On average, the cost to acquire a new lead through digital advertising was $2.60.
Email list sizes increased by 3% in 2020, the same growth rate reported for 2019, the data shows. Nonprofits sent more email messages to more people last year. Of the average 59 email messages per subscriber in 2020, 23 were fundraising messages, 9 were advocacy messages, 12 were newsletters, and 15 were “other,” which might include cultivation messages, event invitations, and polls and surveys, among other things.
Email open rates overall increased by 9%, to 21%. Unsubscribe rates declined by 5%, to 0.18%. Response rates increased for both advocacy messages (to 3.6%) and fundraising messages (0.10%).
For every 1,000 fundraising messages delivered, nonprofits raised an average of $78 – a 35% jump from 2019. The average response rate for advocacy email was 3.6% — a 5% increase over the previous year. The average response rate for fundraising email was 0.10% — a 41% increase over the previous year.
For every 1,000 email addresses, nonprofits had an average of:
Desktop users were more likely to complete a gift and their gifts were likely to be in larger amounts although they represent a declining share of overall traffic. The share of traffic from users on mobile phones increased by 9% in 2020. Mobile users accounted for 50% of all website traffic, compared to 44% for desktop users and 6% for tablets. Mobile visitors made 35% of the donations and accounted for 25% of the revenue. Users on desktop devices made up the majority of donation transactions (61%) and revenue (72%). The average gift made on a desktop device was $80 versus $42 by mobile users.
Organic traffic accounted for 42% of all nonprofit website traffic. Of all organic website visitors, 0.08% completed a gift. The average revenue generated by an organic website visitor was $0.12.
A record 220 nonprofits participated in the study, which for the first time included 55 nonprofits based in the United Kingdom. Small nonprofits are those reporting annual online revenue in 2020 of less than $500,000; medium nonprofits are those between $500,000 and $3 million, and large are those with more than $3 million. Not all participants were able to provide data for every metric. Because each Benchmarks Study includes a different set of participants, the report said it cannot reliably gauge changes by placing one year’s edition next to another’s. When year-over-year comparisons are made, the study includes long-term data from this year’s participants.
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