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[ASK AN EXPERT] What Are The Best Ways To Identify Trends In My Data To Improve Annual Giving Planning?

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Our Ask An Expert series features real questions answered by Claire Axelrad, J.D., CFRE, our very own Fundraising Coach, also known as Charity Clairity.

Today’s question comes from a nonprofit employee who wants advice on how to start identifying trends and major and mid-level donors in their data. 

Dear Charity Clairity,

I am working on building a better annual plan for our organization. I need to start with our data, but I am not sure what the best way is to approach this. Do you have any suggestions about how to start digging through data to identify major, mid-level donors, trends and more in my data?

— Buried and need a shovel

Dear Buried and need a shovel,

You’ve asked a big question, and one that’s difficult to answer without knowing more about your organization’s donor base and fundraising pain points. That being said, let me give you some top-line pointers that hold true for organizations of all shapes and sizes.

Begin by getting a baseline for last year vs. this year.

The main things you want to focus on in building a better plan are:

  • New donor acquisition, numbers of donors and average gift size
  • New donor renewal percentage
  • Ongoing donor renewal percentage

With all of these donor segments, you may also wish to ascertain:

  • The percentage who made the same gift
  • The percentage who made upgraded gifts
  • The percentage who downgraded their gifts.

If you see a pattern of downgrades, you know you need to step up your stewardship game. A pattern of upgrades? Good for you! Keep doing what you’re doing with this group and pull out the upgrade segment for more personal attention.

To put a finer point on things, you can also break these results into segments for donors giving at different levels. If you find you’re doing a great job renewing and upgrading major donors, but your results with mid-level and other donors are flat, you know where you need to tweak your plan.

Establish donor and dollar goals for the coming year.

Be realistic, but also stretch a little. Don’t just pull numbers out of thin air. That’s why you started with your own baseline – so you could establish objectives like:

Determine what constitutes a major gift for you.

You can’t intelligently divide your donors into segments without determining dollar levels for each. Start at the top, because major donors account for the lion’s share of philanthropy.

What’s the top? You’re probably familiar with the 80/20 rule. Today, it no longer holds true. You probably need to lavish your greatest attention on an even smaller slice of your donor base. The most recent  Fundraising Report Card found, on average, 76% of philanthropy comes from less than 1% of all donors. The new “rule” is 76%/0.74!

But that may not hold precisely true for you. Every organization is different. Causes differ. Budgets differ. Geographic reach differs. So, you need to determine what’s going on in your nonprofit to know what’s reasonable. The quick and dirty way to dig into your data and identify your best prospective donors is a tip I learned from Jay Love, Founder of Bloomerang. He advocates the following:

Break your database down (look at the past 24 months) into 3 segments:

  1. Those who gave you 0% of your budget – STOP putting energy here! (I recommend purging folks from your mailing list after 3 years of attempting, and failing, to engage them).
  2. Those who gave you 10% of your budgetDevelop a communications plan, and stick to it.
  3. Those who gave you 90% of your budget – FOCUS the lion’s share of your time and budget here.

Whether your “rule” is 95/5; 80/10, 80/20, 70/30, your top donor segment is likely to jump out at you when you run the numbers. Take this “slice” and look for the mean and median gifts.

  • What is the range of your top donors’ gifts? Is one of the gifts significantly more than the others? For example, if you have one $25,000 gift and all the rest are $1,000 to $2,500, then $25K would be too high to set as your major gift threshold.
  • What is your average major gift? Does this feel like a good amount for your major donor amount? Or is it too skewed by a single large gift?
  • What is your median major gift? Does this feel like a better amount for your major donor amount? Or do you have more prospects here than you can reasonably manage? If so, the amount you’ve targeted as a “major donor” level is too low. Too few prospects? It’s too high.

Determine what constitutes a mid-level gift for you.

Of those who give you a smaller percent of your budget than major donors, also look at the average and median gifts.  Generally, anyone who gives above average is a good prospect for cultivation so you can inspire them to upgrade to the next level.

You can break this down by giving ranges as well. Objectives then might look like:

  • $100 – $499: Upgrade 50% of donors giving $300+.
  • $500 – $999. Upgrade 50% of donors giving $750+.
  • $1,000 – $2,499. Upgrade 50% of donors giving $2,000+.

The numbers I’ve provided are random. Do your own number crunching to establish your own ranges and renewal, retention and upgrade objectives within those ranges.

I hope this helps give you the shovel you need to get unburied from all your data!

Charity Clairity

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