Why is "Donate" is the 7th Most Expensive Google AdWord?

Search engine marketing company Wordtream published the following inforgraphic this week showing the 20 most expensive Google AdWords.

The 7th most expensive keyword was "donate", coming in just over $42/click. Doing some back-of-the-napkin math, we can see pretty quickly that something is up.

• The average online gift to a non-profit is $144
• A really, really good conversion rate is 10%
• "Donate" costs $42/click

Given the above, in a best-case scenario, a non-profit organization would be spending $420 for $144 in donations. The economics of keywords would dictate that most popular keywords would be bid up until they are barely at breakeven with the downstream return from conversions, but this isn't even close.

And there's nothing crazy going on here - Google "donate to charity" and you'll see ads from a slew of large, name-brand non-profits.

So what's going on? Well, there is a large external force at play in this market - Google Grants. Google actually gives away oodles of free AdWords credit to non-profit organizations. I suspect that many of these organizations just dump their Google Grants cash into obvious keywords like "donate", which drives up the price way past what it would be if these organizations were using their own money.

It works out great for Google - they appear generous by giving all this AdWords loot, but since the organizations appear it be using the grants to compete against one another, the actual impact to Google's bottom line is minimal. The grants cancel each other out.

This also means NPOs could be savvier about where to spend their AdWords dollars, granted or not.