Nonprofits have spent most of last year and the majority of this year finding creative ways to raise funds online. This involved launching innovative virtual events such as charity streaming or virtual races. They tried to ensure that they build and continuously engage their communities in ways that were personal and more impactful than ever before.
At the end of a fundraising campaign, it’s always a good idea to take a step back and see what worked and what didn’t. But more importantly, to find key metrics to focus on so you can accurately evaluate the results of your hard work.
What is an online fundraising campaign?
An online fundraising campaign is a virtual event hosted via the internet. Just like an offline fundraiser, the goal is to raise money for a charity or nonprofit. The most common forms of virtual events include webinars, raffles, sweepstakes, auctions, or online marathons.
Popular online charitable fundraisers
Here are some of the most popular ways charities and nonprofits are raising funds through online charitable fundraisers:
- 50/50 Online Raffle: As the name suggests, in this raffle the prize is split 50/50 between the winner and the charity. The prize pot is funded through raffle ticket sales and the winner is chosen via a draw. Organizations that witness rapid growth and success using 50/50 online raffles are those that typically repeat the event every month as it helps build momentum and attracts interest with the growing pot.
- Sweepstakes: Sweepstakes have a massive reach and are perfect for organizations looking to go big with their fundraising efforts. This is the most common form of online contests/raffles. By participating, donors stand a chance to win a range of prizes (may include cash, house, car, etc.). This works as a good option for nonprofits that are on a budget as the prize can be decided beforehand.
- Catch the Ace: Catch the Ace is a weekly multiple-draw lottery that usually runs up to 52 weeks or until the Ace is found. The winner selected in each weekly draw wins part of the proceeds from ticket sales and also gets a chance to pick another card from the 52-card deck to find the Ace. If the Ace is discovered, the winner also takes the jackpot home. If the Ace is not found, the progressive prize portion from ticket sales is rolled over to the next draw.
Winnings from all three of these online fundraisers are usually life-changing amounts. This offers a great opportunity for participants to win big while also making a difference.
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Importance of measuring campaign performance
Measuring campaign performance is crucial, especially if you want to fulfill your charity’s mission and vision. Metrics can show you key trends and game-changing insights when evaluated over time. They provide you with accurate data about your organization’s performance and empower you to make informed decisions that steer your nonprofit or charity in the right direction.
Tracked metrics also allow you to have benchmarks and evaluate your progress against other nonprofits. Above all, measuring campaign performance means you have created a continuous feedback loop that allows you to improve everything on a regular basis thus setting you up for success.
Key metrics to track the success of an online fundraiser
There was a time when gauging a fundraiser’s success was a relatively straightforward process and conducting an in-depth analysis wasn’t the norm. At an in-person event, you could look at the crowd and gauge their enthusiasm or simply take note of the number of people registered for an event to know where things stood.
But not anymore.
Of course, we still look at these core metrics. But in recent times, thanks to the growth in technology, types of devices, and channels of communication, there are a whole variety of other metrics to track as well. For instance, elements like the number of viewers on the live stream, number of replays, level of engagement for each event, and more. Ever since the world has gone online, the number of important metrics to look at has also grown exponentially.
But on the flip side, it is important to remember that not all metrics are created equal. Some are, and always will be, far more important than others. Listed below are important key metrics that should be on your radar.
1. Fundraising ROI
Fundraising ROI allows you to see if a fundraising campaign was effective. It is easy to get the wrong idea when you’re just focused on gross revenue numbers. Unless you have a clear understanding of the cost of the fundraising efforts and see where else you might have invested the money, you can’t exactly understand how effective a campaign was.
The resulting number shows you how much you earned per dollar spent. Any number greater than 1 indicates profit and any number lower than 1 means loss.
If a fundraiser helped you raise $20,000 and cost $4,000, then you can calculate the ROI as:
20,000 / 4,000 = 5. This means for every $1 you spent, you made $5.
2. Landing page conversion rate
Your landing page conversion rate is a very important metric that shows the number of visitors that landed on the page and ended up donating.
A lower-than-usual landing page conversion rate means you need to test various elements on the page such as reducing the number of requested fields or improving the overall page layout.
It takes a lot of time, energy, and effort to get supporters on the donation page. The last thing you want is someone leaving it without taking any action just because they find it confusing or painfully long to fill out.
3. Donor retention rate
The donor retention rate shows what percentage of your donors are donating on a year-over-year basis. As a nonprofit or charity, it is one of the most important metrics that forms the basis of your organization’s stability. Unfortunately, many organizations don’t understand its value and don’t know what steps they can take to improve it.
For example, if you had 100 donors last year, and 40 of them contributed again this year, that means you retained 40 of your donors.
The calculation will look like this:
Donor Retention Rate = (40 / 100) x 100 = 0.4 x 100 = 40%
As a nonprofit, you should aim to keep your retention numbers as high as possible and keep retention costs low. Over time, both of these metrics should improve. Donor retention rates say a lot about your organization’s performance in various key areas including:
- Your communication channels and how effective they are;
- If your donor recognition efforts are hitting the mark; and
- Whether or not you’re using the right donation methods for returning donors.
If you’re not happy about your donor retention rate, look at your communication strategy—this is a good starting point to reevaluate your donor retention efforts.
4. Donor growth rate
The metric shows you how much your donor base has grown or shrunk over a specific period of time. Donor growth is usually a result of various factors combined. Dismal donor growth numbers indicate that it is not the only metric that is less-than-ideal.
This metric is eye-opening and allows you to take stock of your overall strategy. These numbers also put you in a position to address potential problems quickly and early on.
5. Donor acquisition cost
Understanding how much it costs to acquire new donors is crucial to determining where to invest resources and where to adapt.
You can look at your marketing or acquisition expenses as a whole and divide that number by the total acquired donors. To get even more specific results, calculate donor acquisition cost by marketing channel, campaign/event, or period of time to see which areas are giving you the highest return on investment (ROI) and take stalk of the areas that need more work.
Calculating the donor acquisition cost will help you —
- Understand how you can reduce overall donor acquisition expenses;
- Perform a cost-benefit analysis to identify the best channels for donor acquisition; and
- Appropriately plan and budget for future campaigns.
6. Email open rate, click-through rate, and opt-out rate
The email open rate is the number of people who actually opened your email. For nonprofits and charities who are able to figure out their baseline open rate, the easiest thing to do is to keep changing one element in the email at a time to see what works. This may include the subject line, time of sending the email, and how you address the sender.
The email click-through rate shows the number of people who clicked through to the links in your email such as your website or donation page links. You can obtain the correct rate by dividing the number of subscribers who clicked on a link by the number of emails delivered. If you are not happy about your click-through rate, tweak elements such as your calls-to-action (CTAs) or see how to personalize emails better with donor segmentation.
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The email opt-out rate refers to people who ‘unsubscribe’ from the email stream. Once email subscribers ‘unsubscribe’, your emails start going into their spam folder instead of their inboxes. This is a good metric to consider within your overall email strategy as it helps you take stock of each email marketing element and then improve it.
All of these rates together can help you assess your email strategy.
7. Website page views
Website page views refer to the number of times your web page was viewed. This metric offers great insights in combination with other metrics such as your landing page conversion rate. If you have a high click-through rate but low conversion, this indicates a problem in your web page’s content or design.
There are three main ways for traffic to land on your web pages:
1. Organically, through an online search,
2. Through social media channels and paid ads; and
3. Through referral traffic from third-party sites and links.
Overall, it’s important to know which sources your customers are coming from so you can optimize your marketing efforts accordingly. It is also crucial to know which pages on your website are getting the maximum number of page views—this would show you what is working, and what needs to improve.
8. Engagement on social media
Engagement on social media can be tracked via metrics such as the number of people who liked, commented, and shared your content, or the number of people who regularly tune into your live streams, etc.
But as a charity or nonprofit, engagement on social media isn’t just limited to these numbers. The real question remains, is social media engagement converting into dollar value especially considering the resources that you’re putting in?
Unfortunately, very few measure their daily or weekly activities on social media against their goals. And frankly, without it, you won’t ever know if your investment is bearing fruit.
The following metrics indicate engagement on social media:
- The number of fans and followers
- Engagement levels (comments, likes, shares) on each social post
- General public sentiment towards your cause and nonprofit organization
- Clicks to your website
- Conversion from social media followers to donors
9. Cost per dollar raised (CDPR)
It’s one thing to know the gross amount you raised during a fundraiser. But knowing how much you spent to raise that money is what will give you an accurate picture of where your fundraising efforts stand. CDPR is the metric that gives you a very clear understanding of whether you run a profit, a loss or stand at break-even.
For example, if your cost for a fundraiser was $3,200 that raised $7,000, your cost per dollar raised is calculated as $3,200 / $7,000 = $0.45. This means you spent $0.45 to raise every $1.
You can use this formula for a single fundraising campaign to see how effective it was or to assess your overall fundraising efforts to measure how well your nonprofit or charity is doing.
10. Average gift size
Calculating the average gift size is another key metric that will help you understand if your donor cultivation methods are bearing fruit. Your goal should be to increase the average gift size year after year. Average gift size can also be a helpful indicator while planning ticket prices for online fundraisers.
Here’s an example: If you received $35K in donations in a 12 month period, divide this number by, let’s say, 200 donors who helped you raise $35K. It will look like this: $35,000 / 200 = $175. This is the average gift size.
Once you have this number, you will need to compare it year by year to understand the performance of this metric. If you notice a negative trend, you should consider reworking on your donor outreach strategy.
Don’t rely on intuition alone about the strengths and weaknesses of your organization. Glean insights from hard evidence instead. Tracking these key metrics helps you make intelligent decisions and allow you to steer your organization in the right direction.
