Leveraging Campaign Data to Manage Your Digital Budget

Leveraging Campaign Data to Manage Your Digital Budget
Date Published
02/08/2018

Most nonprofits are keenly aware of where their budgets are allocated and smart about how they choose to spend them. But one thing many nonprofits struggle with is how to plan for their digital fundraising efforts. Nonprofits may have a budget for fundraising but are not always sure how much to allocate for their digital campaigns. Even more of a challenge is deciding where to invest their digital budget to generate the best results.

The truth is, there is no “one size fits all” formula nonprofits can follow to help budget for their digital efforts. What has worked well for one organization may not necessarily work for another. Nonprofits are unique in their services, missions, and audiences – and their fundraising programs will differ, just the same.

While there is no standard for how much nonprofits are spending on digital fundraising, revenues from online fundraising grew by 14% in 2016 and are expected to continue to increase through 2020.

If you’re an organization that is growing your digital programs, we recommend taking a deeper look at the funds you’re budgeting for digital compared to your overall program. Consider where you can reallocate funds from lower performing direct mail campaigns to target new audiences via online channels.

Digital fundraising is producing larger returns, year-over-year, and if you’re looking to develop a more effective fundraising program, you’ll have to continue to invest more in the channels that are generating returns.

If your organization is new to digital, consider increasing your year-end budget by 10 to 20% to pilot a digital campaign. This way, you’re giving your organization the ability to grow its reach to donors it may not have exposure to otherwise. We recommend you at least implement an Email and pilot Facebook program this year. In the age of digital transformation, if you’re not leveraging the channels your donors are migrating to, you will be losing out on these opportunities to competitors.

After you project how much you plan to invest in digital programs, you’ll need to consider how you can effectively manage your budget to grow these programs efficiently.

Here are some tips for how to budget to grow your digital fundraising program:

If you have run digital fundraising campaigns in the past, our best advice is to take a deep look at the data from your campaigns. This will help you get a better understanding of where and when money was spent, and what efforts were most productive.

Nix any efforts that did not work:

We suggest you reallocate funds from campaigns that did not perform in the past. Any campaign with less than a 1% conversion rate should be reconsidered. These funds should then be used to invest in other digital tactics.   

Build out a budget for programs that performed best, based on your goals:

As fundraisers, our primary goal is usually to generate donations. And, ideally, we want to target audiences that convert at the highest rate.

Start by looking at the campaigns and ad segments that performed the best. First, determine the efforts that had the highest conversion rates. Then filter your efforts by those that generated the highest average gift. Consider replicating at least the top 50% of digital campaigns that have worked for your organization in the past. Then model a budget that allows you to improve these over the next year. Were there underleveraged channels that had a positive return? Consider committing additional funds to these efforts. They are your proven strategies and should be leveraged, accordingly.   

Include operational costs in your budget:

To build a comprehensive budget, break down the costs you expect to incur in management and creative fees; as well as your media spend. This will vary greatly depending on the channels you’re investing in and the size of the audience you’re trying to target, but will give you a more accurate view of how you’re spending money.

Innovate:

If you’ve run digital programs in the past but are not sure what channels you should be investing in, start thinking about the maturity of your current digital fundraising programs.

According AFG’s recent survey, “The State of Digital Fundraising 2017,” many nonprofits shared which digital channels they are leveraging. The technology adoption curve, below, demonstrates where these organizations stand in terms of digital maturity. If you want to grow a more robust and effective fundraising program, you’ll need to invest in new channels. Digital marketing is an iterative process, and your campaigns will improve as you splice up what has worked best and optimize those efforts in each channel. This is how you build out a true multichannel approach to your fundraising.

Leveraging Campaign Data to Manage Your Digital Budget

We recommend that you try allocating your remaining budget across these channels. Depending on your audience size this may not be possible, but there are always ways to test new tactics without wasting your budget.

Kill failing tests quickly:

As you move through the year, it is important to actively manage your budget. This means, no setting and forgetting as you move through campaigns.

If you are testing a new tactic that is not converting, you should pause it. Reserve these funds for more tried and true methods. Don’t be afraid to allocate funds then pull them away from a tactic that’s not generating revenue. This will only maximize your budget. You need to try new things to succeed, but the great thing about digital is you can track results in real-time and react to campaigns that are not performing.

If you consider these tips when planning and managing your budget, you’ll be forced to think long and hard about where the true value lies in your programs.  You’ll be more prepared to leverage the proven work your team has done while also reaching new donors through more innovative means.

If you have any questions about how you can best plan for digital in your upcoming fundraising programs please contact the Allegiance Fundraising team today.

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