You’ve probably heard of the fundraising funnel before.
If not, I’m sure you’ve heard of similar concepts like “donation pyramid,” “sales funnel,” or “nonprofit marketing funnel.” Although slightly different, these concepts serve as various lenses to analyze the fundraising process.
Each funnel or pyramid serves the ultimate purpose of helping fundraisers turn prospects into prominent donors with a deep connection to the organization’s cause.
The fundraising funnel, presented below, examines the journey of a digital donor, going from prospect to repeat donor. There are four sections of the funnel:
- Website Visitors
- Email Subscribers
- First Time Donors
- Repeat Donors
Each section of the funnel has four components:
- Key Metrics To Examine
- Sector Benchmarks
- Best Practices
- Tips For Your Next Campaign
The funnel will predominantly explore the digital donor journey because there is much more benchmark data available for digital giving. Without accurate sector benchmark data, it’s difficult to assess your fundraising performance.
Before we dive in, I want to make it clear that each donor’s journey is different. While some may donate without subscribing to your newsletter, others may be on your subscriber list for years before donating.
So, don’t take the continuity of the funnel too seriously. A well-made funnel isn’t a funnel at all: it’s full of cracks and holes that represent opportunities to give at each section. This structure provides you with a diversified and optimized system with which to solicit digital donations.
The best way to use this resource is to compare your performance to the sector benchmarks in each section and experiment with the best practices to make improvements where needed.
Alrighty, let’s get to it!
4 Stages of the Fundraising Funnel
1. Website Visitors
I’m focusing on digital fundraising because the donor landscape is rapidly changing.
Online revenue grew by 32% in 2020. Even more impressively, online revenue for hunger and poverty organizations increased by a whopping 173% from 2019.
While this staggering increase was partly influenced by the COVID-19 crisis’s displacement of face-to-face giving, online revenue had already been increasing steadily since 2016.
Although your next major donor probably won’t just stumble across your website and make a $1,000,000 online donation, it’s crucial to take your nonprofit’s website traffic seriously. You need to have a well-maintained website that is easy to find, navigate, and donate on so you can diversify your revenue and grow your donor base reliably.
Here are two metrics that are crucial to monitor to improve website traffic success.
Organic Website Traffic Rate
Chances are some prospects will stumble on your website and be swept off their feet by the slick homepage, powerful mission statement, and the beautiful faces on the “Our Staff” page. These folks are your organic traffic.
Organic traffic is the key to finding new donors online.
How to Improve Your Nonprofit’s Organic Website Traffic Rate
If you find your organic traffic isn’t quite up to par, the best way to improve is to start a blog! On your blog, publish impact stories and encourage guest authors to write about topics related to your cause. For more information on boosting your organic traffic, check out SEM Rush’s article on five ways to improve nonprofit search engine optimization (SEO).
Main Donation Page Conversion Rate
Once visitors are blown away by your website, they have a decision to make. To donate, or not to donate, that is the question. We are skipping slightly ahead in the funnel by examining a donation rate, but as I said initially, a good funnel has optimized donation opportunities at each stage.
The lovely folks over at M&R Benchmarks have provided us with a benchmark for how successful nonprofits convert visitors to donors. Overall, nonprofits have a 21% conversion rate. However, there is a high degree of variance between cause areas. Again, check out M&R Benchmarks to see what you should expect.
How to Improve Your Donation Page Conversion Rate
The focal point of conversion is the donate button. If you find you’re lagging behind your cause area benchmark, follow these five simple best practices:
FamilyPromise provides a great example of a donate button. The button fulfills each of the best practices above and even integrates an arrow within their design, subtly communicating action.
To support your monthly giving campaign, experiment with adding a “monthly” option to your donate button. Check out Keela, a nonprofit software with an awesome recurring donation functionality that gives you the tools to sign up new monthly donors with the click of a button.
2. Email Subscribers
After prospects visit your website, whether they donate or not, they may want to learn more about the work your organization does. Email communications are an excellent way to welcome, update and nurture prospects.
You’re likely familiar with email metrics from your experience using nonprofit CRMs or email marketing services like MailChimp and SendGrid. Whatever the case may be, there are a few metrics you should pay special attention to so you can increase email engagement and donations.
The first metric to study is the open rate, which simply measures the percentage of your email recipient list that opens your emails.
The average nonprofit email open rate across all-cause areas and email types is 21%. When looking specifically at email types, the rate for newsletters is also 21%, and the rate for fundraising emails is 18%.
How to Improve Your Nonprofit Email’s Open Rate
Personalize your emails! Recent studies on personalized messaging revealed that recipients would open and read emails 26% more if they contain relevant and personalized subject lines. It was also found that personalizing your communications can help increase email revenue by a staggering 760%!
Benchmark: 0.7% - 1.7%
Once a supporter opens your email, they should be prompted to take action by reading more on a topic or donating. The percentage of recipients that click on a hyperlink, CTA, or donate button makes up the next metric we’ll look at: click-through rate (CTR).
The average CTR is 1.7% for newsletters, and for fundraising emails, it’s 0.7%. To put these tiny percentages into context, the average revenue per 1,000 fundraising emails sent is $78.
How to Improve Your Nonprofit Email’s CTR
For emails, timing can be everything. Start by limiting your communications between 10 a.m. and 2 p.m., and experiment with your timing based on engagement. Also, keep in mind that your donors may be scattered across different time zones. In your CRM or emailing software, segment donor communications based on time zone, and you may see an uptick in engagement.
List Growth & Unsubscribe Rate
Benchmark: 3% & 8.8%
Those shockingly low CTR numbers tell you the importance of casting a wide net with email messaging. To maintain the size of your net, you need to steadily increase your email list growth while decreasing unsubscribe rates.
The average list growth for organizations during 2020 was 3%.
How to Improve your Nonprofit Email List Growth Rate
To maintain list growth, apply the donate button best practices to your website’s “subscribe” button. Additionally, sign donors up for your newsletter following their first donation. If your CRM has automation features, you can do this automatically.
While increasing list growth, it’s crucial to minimize your unsubscribe rate: a metric that measures the amount of your list that unsubscribes from email communications. In 2020, nonprofits averaged an 8.8% unsubscribe rate.
How to Reduce Your Unsubscribe Rate
Personalizing your email communication to the needs of the individuals on your mailing list is one of the most effective ways to reduce unsubscribe rate. To personalize your communications, segment your donors and offer them the opportunity to customize the frequency they receive emails.
Benchmark: 0.05% - 0.29%
Perhaps the most critical email metric, the donation rate, measures the percentage of your list that donate from an email they receive. For emails sent to established donor audiences, the rate is 0.29%. For prospect audiences, the rate is 0.05%.
How to Improve Your Donation Rate
To increase your donation rate, consider setting up an email drip campaign. Email drips are a tech-enabled strategy that nurtures your audience, keeps them engaged, and drives them to donate. By planning out a series of emails in advance and scheduling them to send automatically, you save time writing emails reactively and on an ad hoc basis.
The marketing blog Pinpointe compiled a long list of statistics on drip emails with some mind-blowing stats:
- Drip campaigns generate 80% more sales but cost one-third less to produce.
- Email open rates are 80% higher for drips over your regular off-the-cuff email.
- Automated marketing resulted in a 451% increase in qualified leads. That’s not a typo, 451%.
The best practices I’ve outlined above can be effectively translated to your next Giving Tuesday campaign. Segmentation will be especially effective. Try segmenting your email list according to levels of engagement (donor, volunteer, member, subscriber), gift levels, or demographics.
Keep in mind that you can apply these tips to other email types like advocacy and fundraising campaign emails. Also, schedule your emails in advance. This will help you craft your overall strategy, making sure everything ties well together.
3. First Time Donors
Once a prospect has visited your website, subscribed to your newsletter, and begun to feel like they’re a part of your mission, they may just choose to donate. Although prospects may give at any stage of the funnel, now is a logical time to discuss what to expect from your first donors.
Unfortunately, there isn’t much data on the average first-time gift amount that online fundraisers should expect. However, M&R Benchmark found that In 2020, the average one-time gift amount was $97. As one-time donations are usually first-time donations, it isn’t too much of a stretch to assume the amounts would be similar.
How to Secure More First Time Donations
You’ll need to find the right platform to accept donations, preferably one that integrates seamlessly with your website.
The most popular platforms for accepting online donations are Paypal and Stripe. Both Paypal and Stripe offer nonprofit discounts and, compared to other payment processors, they make it easier for you to recoup a more significant percentage of your donations.
I know this may be obvious, but it’s vital to prioritize major gifts. But, it’s not just important because the gifts are bigger. Fundraising Reportcard found that donors who give less than $100 have a retention rate of 19.8% retention rate.
Conversely, donors who give $5,000 or more have a 38.64% retention rate. When going after major prospects, you’re not only investing in their first donation, you’re investing in your future.
4. Repeat Donors
To make up for the lack of research on first-time donation amounts, let’s take a look at an equally important statistic: first-time donor retention rate.
Fundraising Reportcard has calculated that the average rate of retention for all first-time donors, not just digital donors, was 18.68% in 2020. For repeat donors, taking into account all donation mediums, their retention rate is 53.1%.
Digging more into digital donors, in 2020, the retention rate for 2019 first-time online donors was 25%. For donors with a previous giving history, the retention rate was 63%.
How to Secure More Repeat Donations
As you can see, the difference in retention rate between first-time donors and repeat donors is quite different. This is why it is so important to set up an efficient stewardship plan that relays a donation’s impact back to the donor.
One of the best ways to demonstrate impact is through communicating KPI progress.
If you’re looking for a reporting tool that’s a bit more comprehensive, then KIT is perfect for you. KIT’s presentation-ready report builder analyzes your data and allows you to build custom reports by selecting metrics, filters, and time frames of your choice. Or, harness the power of KIT with key industry reports, available in one click. Book a demo today to see how KIT can change the way your show impact.
Once you have built a relationship with a repeat donor, they may be an excellent candidate to champion a peer-to-peer fundraiser. It’s been demonstrated that individuals more dedicated to a cause will be better peer-to-peer (P2P) fundraisers.
For example, returning P2P fundraisers can secure up to 3.5 times the contributions of first-time participants. Consider your stewardship efforts as an investment in the fundraising potential of your star donors. After all, what drives future participation in your peer-to-peer campaigns is building relationships with each and every donor.
As I said initially, this isn’t the perfect funnel; if it were, it wouldn’t reach its full potential. This is a tool to analyze your digital fundraising strategy that’s perforated with donation opportunities at each section.
Use the benchmarks featured to hone your practices and the best practices to strive for and surpass the expectations of your cause area. Now get out there and raise some money.