ROI in Digital Fundraising and Online Giving

Digital investment
How much should you spend on your digital fundraising program in 2009? In 2010? I know you’d like me to give you a nice, round number … but you know that wouldn’t be realistic. It really does depend on your organization and its goals. What I can provide you with are some provocative questions you can take back to your team for a spirited debate.

Two of the most important questions: What percentage of your overall income will flow through digital channels, and what is your cost per dollar raised by channel? If your answer to the first question is 5 percent, you’re going to have a very different attitude toward digital budgets vs. if it's 50 percent. When digital fundraising starts to outperform other channels, perhaps it’s time for a shift in spending allocations.

To simplify matters, the primary categories of investment are people and tools.

People
Do you tend to outsource, or would you prefer to hire in-house?

This is an important question to confront as you consider the human resources that go into a good digital program. A quick Google search will demonstrate the abundance of service providers who will help you optimize your Web site, blog, podcast, e-mail campaign, etc.

What I’ve found is that there is an abundance of highly intelligent talent born after 1985 that is eager to change the world. Find those folks and get them on your team.

Tools
This is likely the area of greatest cost variance among the fundraising organizations I know.

To be clear, a basic set of tools would include Web site, e-mail, digital fundraising systems and database. Some organizations decide to build their own tools; others purchase or rent tools built by others. If you purchase tools, you’ll pay up front; if you rent, you’ll pay over time. There also is a growing divide between tools that run on computers managed by the organization and tools that run on computers managed elsewhere.

Any way you look at it, your digital ROI should beat every other direct channel at your disposal … hands down. In comparison to your phones, your mail and your canvassing, every dollar spent on digital should produce more dollars for your cause.

Why? Because the average gifts will be higher, and the cost to get each gift will be lower. As an added bonus, you’ll be saving many, many trees!

Philip King is the president and CEO of online fundraising solutions company Artez Interactive.