5 Top Donor Data Strategies for Fundraising in the New Year
As the new year begins, most nonprofits are taking a breath and collecting themselves after the year-end fundraising push. The first of the year is a time to reflect — and to look forward.
When planning for next year, you need your data from the past year as well as a plan for collecting and utilizing data in the future.
Chances are, you’re already tracking some important metrics. But are you making the most of the data you’re collecting to regularly improve your fundraising strategy?
This year, take your fundraising to the next level with these five smart strategies based on donor data:
- Zero in on prospect data.
- Examine donor and gift retention.
- Get smart with communications.
- Make the most of business connections.
- Explore alternate ways to give.
Ready to make this year the best yet? Let’s get into these top data-centric fundraising strategies!
1. Zero in on prospect data.
Data collection doesn’t start once a donor has made their initial contribution. In fact, one of the most important areas of fundraising strategy is outreach, particularly for major gift prospects.
This year, give your prospect research a boost by refreshing your standard prospect research profile, starting with these templates from DonorSearch.
Make sure you’re accounting for the following data points in your prospect profiles, whether you’re compiling them in-house or outsourcing to a prospect research service:
- Preferred name and title
- Contact information
- Marital status
- Charitable giving history
- Educational history
- Employment information
- Real estate and SEC ownership
- Hobbies and interests
- Community involvement
Pay special attention to markers of both wealth and philanthropic interest. Just because an individual has a lot of money doesn’t mean they will spend it supporting your organization. You have to build in charitable giving history and interests alongside estimated salary to ensure that you’re reaching out to prospects who are actually interested in giving to your nonprofit.
Major gift fundraising is only as effective as the data it’s built on. Make sure your prospect profiles are up to scratch before wasting time and energy reaching out to the wrong potential donors!
2. Examine donor and gift retention.
Bringing in new donors, especially major donors, is a time- and labor-intensive process. To ensure that all that effort doesn’t go to waste, your retention rates need to measure up. Keep your momentum from end of year appeal season going with a New Year’s resolution to get smart about your retention.
Not sure what to do with your donor data to tease out useful retention information? Let’s focus on one important metric, donor lifetime value.
Commonly abbreviated LTV, this metric measures the average total value of a donor’s total contributions to your nonprofit, from their first donation to their last.
To calculate LTV, follow this four-step process:
- Calculate donor retention rate. Divide the number of individual donors who contributed more than once in a year by your total number of individual donors
- Calculate donor attrition rate. Subtract your donor retention rate from 1.
- Calculate donor lifetime, or how many years a donor is likely to donate to your nonprofit. Dividing 1 by your attrition rate
- Calculate LTV. Multiply donor lifetime by the average total of an individual’s annual donations.
The higher your donor retention rate is, the lower your attrition rate will be and the higher your LTV will be. That translates to more value each individual donor brings your nonprofit during their “lifetime” with your organization.
Often, offering a monthly giving program can greatly increase your donor retention rate and, therefore, your LTV. Monthly donors are more likely to stick around than other donors, averaging around 85-90% retention rate.
Of course, you have to make it easy for your donors to commit to monthly donations. Choose donation software that can automate recurring donations, and include an opt-in checkbox on donation forms for all campaigns.
3. Get smart with communications.
The best way to improve your return on investment is to meet supporters where they are. Each donor is more or less likely to respond to solicitations on different platforms, and one of the most accurate indicators is age.
To increase the chances of your message being received, read, and responded to, segment your database by age and send asks specifically tailored to each group on the communication platforms they use the most.
Statistically, here are some guidelines for each generation’s communication preferences:
- Millennials prefer mobile communications, particularly text messages and social media.
- Generation Xers give online and check their email and social media profiles often.
- Baby Boomers and the Greatest Generation are most likely to respond to phone and direct mail solicitations.
These generalizations are helpful for guiding your general communication strategy, especially during big campaigns that involve reaching out to your entire donor list. But individual donors’ stated preferences should take precedence.
Make it a habit this year, if you’re not already doing so, to explicitly ask your donors how they would like you to keep in touch with them.
Retention is another benefit of smart donor communications. If you send messages across platforms that your donors don’t check often, they’re in danger of missing the message and forgetting about your organization. Don’t let that happen! Send messages where your donors will see them.
4. Make the most of business connections.One of the most worthwhile data points in your donor database is your donors’ employment information.
Corporate philanthropy, from matching gift programs to volunteer grants to sponsorships, is an important source of revenue for nonprofits. Corporations get the positive publicity of helping out a charitable cause, while your organizations benefits from the additional donations.
You should always keep information about where your donors work and their job title, for a few key reasons:
- Corporate philanthropy programs: Many companies offer to match the money or volunteer time their employees dedicate to charity. Encouraging donors to participate in corporate philanthropy can be difficult because of the general lack of awareness around these programs.
- Sponsorships and partnerships: If your donors own their own business or hold a C-level position at a company, they have more impact on that company’s philanthropic strategy. These donors are the best to approach for sponsorships or partnerships, especially when planning large fundraising events.
- Connections to prospects: Busy prospects are much more likely to respond to solicitations from people they know, especially individuals they’ve worked with before in some capacity. Enlist your current donors to reach out to the prospects you identify that are in their professional network.
By integrating the data you have about your donors’ employment history, you can make the most of corporate philanthropy without spending a disproportionate amount of time and money tracking down the most connected donors in your database.
Not sure if you can incorporate corporate philanthropy into your fundraising strategy? Take a page from university fundraising’s book.
When reaching out to recent alumni, a difficult group to engage in philanthropy, smart university fundraisers focus on corporate philanthropy as a way to collect funds without asking too much of their graduates. Solicitations focus on supporting the institution they love without having to spend money they don’t have.
5. Explore alternate ways to give.
You donor data doesn’t just help you get better at your existing fundraising strategies — it can also guide you to other ways for your donors to support your mission.
Online donations are just one piece of the puzzle. Constituents can support their favorite nonprofits through fundraising events, specialized fundraising campaigns, volunteering, corporate philanthropy, and other ways you might never have considered before.
Of course, you don’t want to jump into a new fundraising strategy in the new year without being sure that it will pay off. Get smart when expanding your ways to give by following these tips:
- Investigate your donors’ involvement with other nonprofits.
- Send out a survey to your donors asking which ways to give they would participate in.
- Take a cue from other similar charitable organizations in your area.
- Upgrade your existing fundraising with new technology.
If you’re launching a new way to give, publicize it widely! You want your donors to know what’s going on and be excited about it, especially if you decide to implement an idea your donors supported in the survey you sent out to them.
It’s important to check in with any new giving channels more often in their first year than others that have proven their worth. Schedule regular data crunching with your development team to make sure your new programming is still paying off.
Looking forward to the new year’s fundraising is exciting, especially when you’re ready to try something new. Make sure your next moves are informed by your donor data, and you can’t go wrong!
About the Author
5 Top Donor Data Strategies for Fundraising in the New Year
Sarah Tedesco is the Executive Vice President of DonorSearch, a prospect research and wealth screening company that focuses on proven philanthropy. Sarah is responsible for managing the production and customer support department concerning client contract fulfillment, increasing retention rate and customer satisfaction. She collaborates with other team members on a variety of issues including sales, marketing and product development ideas.