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Direct Mail Key to Nonprofit Donor Retention Research Finds

May 31, 2011
CHARLESTON, SC—May 31, 2011—Blackbaud has announced the publication of its “2011 donorCentrics Internet and Multichannel Giving Benchmarking report,” which features research on nonprofit online giving in the context of an integrated direct marketing program. The report also includes an extended analysis on the value of multichannel giving.

Developed by Blackbaud’s Target Analytics company, the report finds that although multichannel giving has become a popular objective of nonprofits as a way to build constituent support, it is not widely practiced. The large majority of donors give through only one channel and use only direct mail as their vehicle for donations.

According to the report, the only donors who do significant multichannel giving are new donors acquired online. Large numbers of these donors switch to direct mail giving in subsequent years. This is the group of donors for which multichannel giving is crucial for garnering repeat gifts and realizing true long-term giving potential.

“The Internet is becoming an increasingly important acquisition channel but has not proven to be as effective for retention,” said Rob Harris, Target Analytics’ director of analytic products and a co-author of the study. “It is the ability of online-acquired donors to use another channel—that is, to start giving through direct mail—that significantly boosts the long-term value of this group of donors. The most successful organizations have integrated online and offline marketing teams and CRM systems to develop effective multichannel communication strategies that can maximize donor value.”

The research also finds that for donors already on file, evidence of past multichannel giving is not a predictive factor for future retention or long-term value. Traditional direct marketing segmentation variables such as recency, frequency, and gift amount are far more predictive.

Other key findings about online donors include:

• The majority of gifts are still received through direct mail, although it has become increasingly common for new donors to give their first gift online.

• Online-acquired donors are significantly younger and tend to have higher household incomes than mail-acquired donors.

• Online-acquired donors tend to give much larger gifts but have slightly lower retention rates than mail-acquired donors.

• In aggregate, online-acquired donors have much higher cumulative value over the long term than traditional mail-acquired donors. However, long-term value varies depending on the donor’s origin gift level, and the substantially higher gift amounts given by online-acquired donors can mask issues with retention.

The data presented in the report comes from the most recent transactional data available for the 28 organizations participating in Target Analytics’ donorCentrics online benchmarking service in 2010. The organizations that participate in these online benchmarking groups are prominent national nonprofits covering a range of sectors, including animal welfare, the environment, health, human services, international relief, and societal benefit.

The complete report, including a list of participants in the 2010 online benchmarking groups, can be found at www.blackbaud.com/multichannel.

About Blackbaud
Blackbaud is the leading global provider of software and services designed specifically for nonprofit organizations, enabling them to improve operational efficiency, build strong relationships, and raise more money to support their missions. Approximately 24,000 organizations—including The American Red Cross, Cancer Research UK, Earthjustice, International Fund for Animal Welfare, Lincoln Center, The Salvation Army, The Taft School, Tulsa Community Foundation, Ursinus College, the WGBH Educational Foundation, and Yale University—use one or more Blackbaud products and services for fundraising, constituent relationship management, financial management, website management, direct marketing, education administration, ticketing, business intelligence, prospect research, consulting, and analytics. Since 1981, Blackbaud’s sole focus and expertise has been partnering with nonprofits and providing them the solutions they need to make a difference in their local communities and worldwide. Headquartered in the United States, Blackbaud also has operations in Australia, Canada, Hong Kong, the Netherlands, and the United Kingdom. For more information, visit www.blackbaud.com.

Source: Blackbaud.

 

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