Two main focal points for nonprofits include donor support and employee satisfaction, including the retention of both.

The annual M+R Nonprofit Benchmark Study is an in-depth exploration of what’s changing for nonprofits and their supporters. The study is based on input from 135 nonprofits in various industries and sizes. The 2019 report revealed that one of the most profound findings was that online revenue for nonprofits grew by a meager 1% in 2018, which is a staggering decline from the record-breaking 23% growth reported in 2017 for many non-profits. This is the first time since 2005 that average revenue growth reported was in the single digits.

Why the flatline?

While there was still some growth in 2018, the momentum from 2017 was unable to be maintained and nonprofits have returned to a “normal” growth trendline. While this could be attributed to the political reaction, donor behavior in light of the new tax laws or other factors affecting constituents, double-digit growth is expected in 2019.

But that wasn’t the only significant finding in the report:

  • Digital ad budgets grew by 144% in 2018
  • Mobile and tablet users accounted for 48% of all traffic, 30% of gifts and 21% of revenue
  • Desktop users made 63% of all donations and accounted for 71% of revenue
  • On average 37% of online donors were repeat donors

Digital advertising

Digital advertising is an important part of a nonprofit’s effort to reach new audiences, attract younger generations, obtain new donors and prospects and for also re-engaging current supporters. The largest change in digital advertising was seen in smaller nonprofits, which tripled their investment in digital advertising in 2018, compared to 156% growth for medium nonprofits and 116% for larger nonprofits. Small nonprofits continue to gain valuable experience with digital advertising. The benefits of digital advertising are not just limited to fundraising, they provide for branding, educational campaigns, lead generation and advocacy, including signing petitions, completing surveys and quizzes and submitting email addresses.

Donor support and retention

Although mobile device users have narrowed the gap on online traffic, a desktop user is more likely to make an online contribution – and are likely to be larger amounts.

Overall donor retention rates are an important metric for nonprofits to track. Focusing on online donation trends, the 2018 online donor retention rate was 25% for those that who made their first donation in 2017, and 59% for repeat donors (those who gave in 2017 and one previous year). It’s no surprise the 2018 online donor retention for both groups were down when compared to 2017 levels when looking at the overall drop in the online giving. Although retention rates dropped for all giving levels in 2018, donor retention rates tend to vary by giving level with lower giving levels having the lowest retention rate.

Donors who engage in more ways than one tend to stick around longer and contribute more, so it is critical to build relationships with donors outside of online and social media channels. It’s important for nonprofits to gain an understanding of what motivates donors to provide support to their organization. Strategies for building relationships include hosting events, providing volunteer opportunities and regularly reaching out to keep donors updated year-round. Hosting engaging events allow nonprofits to get to know their donors face to face while providing volunteer opportunities allow donors to see how their donations are helping the organizations mission.

Employee satisfaction examined

Feeling valued, a sense of progress and confidence in the organization are among the critical factors that make nonprofit employees happy and, thus, create a superior nonprofit employer, according to The Nonprofit Times “2019 Best Nonprofits To Work For” report. The report includes information obtained by small, medium and large organizations. Small organizations (organizations with 15–49 employees) made up 18 of the top 50 rankings and including the number one ranking this year.

Traits of the top-ranked employer included providing employees with strategic work plans with clear expectations, outside certification training and strong benefits including 100-percent paid medical and dental premiums, wellness room and stress reducer kit.

The top drivers identified in the survey revolved around:

  • Employee development and resources, including employee recognition and employee training;
  • Leadership and planning, including confidence in the organization’s leaders and long-term strategy;
  • Culture and communication, including trust and quality being a top priority, overall engagement and type of work, colleagues, flexibility and benefits

About the Authors

Katie A. Allender

CPA
Manager, Assurance and Advisory

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