The Problems with Email Fundraising

Because of the rate of technological innovation, many might imagine that email will soon become irrelevant. When nonprofit fundraising emails decline in performance, it’s easy to jump to the conclusion that this must be because email is losing efficacy.

However, the problem lies not in the power of email itself, but in HOW nonprofit email marketing programs are run. There are two main problems with many email fundraising approaches.

1. Even when fundraisers recognize the value of email, they often underutilize its capabilities.

According to Adestra’s 2015 Email Marketing Industry Census, email continued to be a major source of ROI for all sectors that responded.

  • Email ROI has jumped 53% in a year — delivery rates, conversion rates, open and click through rates have all increased since 2014.
  • 79% of charities ranked ROI from email to be excellent or good (up 13% from 2014).
  • Most every sector in the survey agreed that in five years, email will still be one of the highest channels for delivering ROI.

Based on the results of the census, it’s clear that email is and will continue to be a valuable strategy–and nonprofits agree.

Yet when we analyze their email performance in the study, nonprofit organizations scored poorly.

  • Nonprofits were found to spend the LEAST amount of time on optimization and strategy (8 out of 10 organizations spend less than 2 hours per week)
  • The majority of organizations are using less than HALF of Email Service Provider’s (ESP) functions
  • Nonprofits reported to have engaged in only 11 out of 15 email marketing tactics such as basic segmentation and behavioral targeting
  • Nonprofits were also found to be the LEAST mobile optimized –only 13% had a good to somewhat-advanced strategy
  • The effectiveness of nonprofit fundraising appeal newsletters was down 2% from last year

As you can see, there is definitely plenty of room for improvement. It’s not that email is no longer effective, it is simply not being used to its full capacities.

Email will continue to be a reliable channel, however in the future, the level of return will increasingly depend on how much strategic effort organizations choose to place on their approaches.

Nonprofits need to take a more ambitious approach to email marketing. This means collaborating with email marketing providers, choosing great email software (there are plenty of free software options) increasing efficiency, and investing more time to improve email programs.

2. Fundraising email engagement has dropped due to an increase in donation form abandonment.

An important key to getting the most out of email comes from understanding the REAL reason why email response rates have dropped.

The M+R 2015 Nonprofit Benchmark Study (surveying 84 nonprofits) shows that fundraising email engagement dropped in 2014 from the previous year because of the increase in donation form abandonment. Some notable stats from this study include:

  • Emails across the different nonprofit sectors were found to have an average 14% open rate and a 1.6% click through rate
  • Email fundraising click through rates were below 1% for all sectors
  • There was only an average of 13% page completion rate
  • Online revenue from email was below 30% in all sectors except one (environmental)

From this data, we can conclude that even when donors click through to a website page to complete a donation form, friction during the process often leads to abandonment. We can also see that there are issues in the emails themselves that are causing low click through rates. Subsequently response rates that have dropped not due to the properties of email itself, but to the shortcomings of nonprofit email marketing.

How to Fix These Problems:

  • Self-Assess: An easy place to start is to take a look at  your current strategy. How much time do you currently spend on email programs? Which marketing tactics do you currently use? Which ones would you be willing to try? Start small and invest a little extra time each week in identifying the right options to engage donors for your organization. Make sure to keep track of the results to monitor what’s working and what isn’t.
  • Experience donation friction for yourself: Walk through the giving process from the moment an individual receives an email, through the completion of donating. How many steps are involved? Would YOU follow through on the process or would you abandon the donation form? How can you eliminate steps to make the process smoother? One idea is to consider express payments–they ensure donors only have to deal with the hassle of filling out extensive forms ONCE. And in the future, if they don’t have to fill out multiple forms each time, chances are they will be more engaged in your emails and will be more willing to click through and give.
Additional Resources:
There is no shortage of advice for creating really effective email campaigns. At @Pay we’ve learned a lot from the leading providers’ blogs and recommend the following resources:

The Takeaways:

The drop in response rates is not occurring because email itself is losing efficacy. If nonprofits simply decide to invest more strategic time in improving their email program–that is taking the time to develop an effective strategy that produces RESULTS–and reducing friction on donation pages, they will increase fundraising email response rates and get the most out of their email programs. What steps do you plan to take to improve your email fundraising?

If you need some help developing an effective email strategy, make sure to check out our guides on nonprofit newsletters and church newsletters.

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