Article by Dan Pennell, CEO of WMtek
Non-profit organizations are not always known for their cutting-edge use of technology. In recent years, however, WMtek has seen a number of organizations push hard to get outside their comfort zone with time and money spent on web initiatives. Some have spent unprecedented percentages of their organizational budgets in an attempt to shore up their public-facing website and embrace new web-based technologies that will allow them to raise more money online and increase their recruiting efforts. At the onset, this seems good. Are we finally getting ahead of the technology curve? Maybe, but there seem to be some speed bumps that exist before you get to the high-speed straightaway you are hoping for.Speed Bump #1: We aren't being as aggressive as we think we are.
What percentage of your annual operating budget is exclusively dedicated to digital marketing and technology initiatives? Your organization is probably spending a higher percentage than ever before, but truth be known, it may still be a significantly lower percentage than most enterprise companies. According to a 2014 Gartner report the average was 10.2% with 50% of companies planning for an increase in 2015. It is assumed that companies whose exclusive use of web-initiatives is based on forward facing engagement activities such as sales and recruitment spend a much higher percentage of their annual budget than manufacturing or business-to-business corporations.
In addition, Gartner reports that enterprise organizations are investing more aggressively in their public-websites. This has resulted in total expenditures of $500 billion annually on digital initiatives, as well as 19% more annually on corporate websites than on digital advertising (such as Google Adwords, etc).
What does this mean for us? Let's put it into perspective.
If your organization grosses $30m annually, an equivelantly sized secular firm would be spending at least $3m every year just to stay on par with minimum growth expectations. But you aren't a secular firm, so you should be spending less, right? Maybe, but not necessarily. If you are a Missionary Sending Agency whose primary activities include fundraising and recruiting, it could be argued your digital marketing and web-based technologies budget should be as high as 15% of gross income.
The reality is, Christian non-profits have traditionally spent a much smaller percentage of their annual operating budget on digital marketing and web-based initiatives. In fact many still favor project-based, extra-budget fundraising to cover costs of their web-based initiatives rather than allocating a percentage of their annual operating budget for these efforts.
Why is this a problem?
For starters, funding an aggressive web-initiative this way may be comparable to purchasing a race car and not having enough money left for fuel, maintenance, drivers or a pit crew. It’s a great car, but it’s not going to accomplish anything without an always-on support staff and budget.
So, how do we know if we are being aggressive?
It kind of depends on our measuring stick. For many organizations, they are certainly being very aggressive if you measure current efforts against their own past. But, if the measuring stick is industry averages it appears that most are still failing to show up on race day.