Learning to Love the Unallocated 

By Nick Ellinger, Chief Brand Officer 

The new Giving USA 2024 report is out and, as always, The NonProfit Times summarized it well in their Donors Gave More, Inflation Deflated It piece. But there’s something weird when you dig into the numbers.  

Overall, nonprofit giving was $557.16 billion. When you total the amount given to each subsector (religion, human services, education, health, public society benefit, arts/culture/humanities, international affairs, environmental/animals, and gifts to foundations), the total is $598.16 billion. 

How can the total of sectors equal $41 billion more than the total amount of giving? 

Because those behind the Giving USA report are smart, honest researchers, they disclose and footnote how: There’s a group of “unallocated” donations that happen to be negative this year. As Giving USA says, in their FAQ, “All Giving USA figures are estimates … Estimates done in different ways should not match.” 

Simply put, doing this stuff is hard. (As someone working on Moore’s upcoming 2023 Year in Review report, all I can say is +1 to that.) 

It’s also vitally important. Gift allocation across various channels was a central discussion in yesterday’s executive session on Generating Additional Revenue Through Donor Surround Sound with The Nonprofit Times, American Heart Association, Disabled American Veterans, National Civil Rights Museum, and Moore. 

As Moore’s own Janet Tonner said in that discussion, we shouldn’t budget or strategize by channel just because it’s neat and looks good in a spreadsheet. People are people, not mail donors or online donors or what-have-you; every touchpoint adds to or subtracts from someone’s likelihood of giving. 

However, we still need to know the value of each channel and each communication. Those days when we could act like seven-year-olds playing soccer, gathering around the ball that happened to be the last touch someone received, are long gone. In a world where (for some organizations) over half of the gifts given by those under 50 because of mail happen online, simply looking at where someone gave is a recipe for misinvestment. 

So, we must test. A great example is a recent study in Germany of digital ad buys by Save the Children. They randomly assigned postal codes to either receive or not receive ads. Then, they measured what happened to donations in those postal codes, regardless of the channel. It turns out that digital ads work. Those postal codes had a 14% increase in revenue and 1.45 Euros out for every Euro put into advertising. 

Note: The researchers don’t know which communication or channel caused any individual to give. But they can answer the question of whether digital ads are a good place to put your next dollar (or Euro). In this case, the answer is yes. 

Does it matter that these individual donations are unallocated? A little. You want to be able to allocate the marketing mix each person gets in ways that are specific to that person. 

But not a lot. GI Joe underestimated things: Knowing how to invest that last dollar is more than half the battle. It’s far more important to determine what drives revenue generally and turn those dials effectively.