ARTICLE
4 Tips for Small Shops to Find Donor Prospects
Topics -
Everyone wants new donors, right? So how do you get them?
Bottom line: gifts are the result of effective engagement. The fantasy of finding rich strangers we can lure into giving generously to our cause is seductive and tempting. In reality, paying to interrupt complete strangers with an uninvited ask and thinking they’ll go from stranger to a donor can amount to magical thinking.
According to Roger Craver in his book Retention Fundraising, “The average nonprofit has a 60-70% chance of getting additional gifts from current donors, a 20-40% chance from a lapsed donor and a 2% chance from a prospect.”
Ouch.
A wise friend in fundraising once told me, “Finding new donors is like going fishing. You need bait and a good place to fish.”
So where can you find donor prospects? Let’s start with your data. As tempting as it is to think about all the new donors you haven’t met yet the truth is most organizations have all the prospects they need, they just need to convert them. They also likely have all the donors they need, they just need to retain and upgrade them.
It’s tempting to fantasize about new donors. It’s like the difference between ordering a cheeseburger or getting a kale salad. Sure, kale is popular and kind of “having a moment” right now. But while we all know we should eat more vegetables that cheeseburger is really tempting. Retaining donors and upgrading donors is like eating our vegetables. Fantasizing about new donors is as tempting as that juicy cheeseburger.
Start with Your Data
I feel like the mom who put healthy snacks in their kid’s birthday piñata (which I did once) telling you to analyze your data because I’m sure you’d rather have a bright shiny toy to use for prospecting instead. But if you want more donors you should start by asking yourself where you got your best donors. Do you know what acquisition channel or strategy has yielded you your best donors?
Calculating Donor Lifetime Value
Not sure where to start? Start by calculating your donor lifetime value. Donor lifetime value is the same as “customer lifetime value.” It’s essentially the approximate value of a donor (or customer) to a business or “the total net contribution that a customer generates during his/her lifetime on a house list.” How is it helpful? Donor lifetime value is the prediction of how much money you can expect to receive from a donor in their lifetime of giving.
How do I calculate it? It is not calculated by individual donors but by an average of your file. For example, if your average donor has been on file for 5 years, gives an average of 3 gifts per year, with an average gift amount of $25 your average donor lifetime value is $375. You can also calculate it for a segment of your file, for example by giving level (annual fund donors, major donors etc) or by acquisition channel. Knowing your donors’ lifetime value helps you make educated, informed decisions about investing in acquisition or retention. If you know the lifetime value of your annual fund donors is $1,000 then you can feel confident investing $100 to acquire a new one.
4 Strategies to Convert, Upgrade and Retain Donors
1. Survey your file.
How many times in a typical day are you invited to take a survey? The for-profit world has this mastered, especially when it comes to customer satisfaction surveys. Does it work? Their customer retention rates dwarf ours. They know if they want to retain customers they have to be constantly collecting and acting on feedback. The nonprofit world? We don’t do it nearly enough.
Here are 3 examples of nonprofit surveys, and tips on how to use donor satisfaction surveys to find donor prospects.
What can you learn from a survey?
Gathering useful insight about your donors and supporters is easier than you might think. It’s the same way you get to know your friends. All you have to do is ask—and listen. Surveys provide information on:
- Who your donors are (demographics)
- What interests them (which programs, services, projects and/or beneficiaries they care about)
- How satisfied they are (worth knowing since satisfaction is the #1 driver of donor loyalty!)
- How to segment your appeals based on their interests
- Which donors are good upgrade prospects (by virtue of who responds and how)
- Who your planned gift (and major/capital gift) prospects are
2. Segment and personalize your communications.
We are sitting on a lot of data about our donors we rarely use. Personalization boasts a wow factor and the gift of feeling known by us is one of the greatest gifts we can give our donors. Nonprofits who segment and personalize their donor communications based on frequency and recency of giving, reasons for giving, interests and other demographic information enjoy higher retention rates. If you need help getting started download this guide.
3. If you aren’t marketing planned giving opportunities to your file, start.
Bloomerang just published a new eBook on prospecting, loaded with low-hanging fruit, tips, and the first truth bomb from Tom Ahern who notes that the average major gift is $5,000 and the average bequest is $32,000. Here’s another truth bomb from Viken Mikaelian, founder of Plannedgiving.com “Only 5% of the nation’s wealth is in cash. The other 95% is in assets like stocks and property.”
4. Plan the donor journey.
Follow a solid, actionable plan to welcome prospects (and acknowledge and thank new donors) properly. Once you capture their eyeballs you need a thoughtful plan to convert these people to your cause. Nowhere is this truer than with a first-time donor who has just given to your cause! Most stewardship plans I see organize touches based on the amount a donor gives. Meaningful attention is reserved only for donors giving large gift amounts. Donors don’t know what kind of love and attention is waiting to reward if they give higher gift amounts. Not only is that a mistake, it’s a one-way ticket to a horrible donor retention rate. The trust is donors admit to under giving with their first gift. If you don’t currently have business rules for stewardship download this sample stewardship plan now to start planning the donor journey.
What if I am brand new?
We all have to start somewhere. (Trust me I know, I started a nonprofit in the living room of my apartment with $500 and a credit card!) If you are at the very beginning with no donors start with volunteers, board members, your board members network, stakeholders in your community, people who care about similar causes, current clients (or recipients) and their network.
Want to share what strategy yielded you your best prospects? If so, share below.
Get a Database Health Check with Bloomerang!
Comments