Year-end giving presents an extraordinary time for nonprofits to raise more money from individual donors than any other point in the year. It is also a time when fundraisers get too creative arguably, on the wrong things – and consequently spend too little time on the right things.
A quick gut check: If your planning is concentrated on answering any of these questions for your year-end campaign in the way I did when I had my first fundraising gig, now is the moment to pause all that creative ideation.
- What are the three bullet points I should put in the center of my one-page direct mail appeals that will compel each donor to give and give more?
- Should I change the envelope size and color to really, you know, grab attention?
- When should that direct mail appeal hit mailboxes – what’s the magic day between Thanksgiving and New Year’s Eve that no one will be thinking about the holiday?
While the preceding questions are critical design and production-related questions to inform any direct mail campaign, a single piece of mail to your entire database is not going to cut it this year.
Nonprofit organizations are no longer the ultimate arbiter of social impact and volunteering. Let alone giving. The vast amount of opportunities and content currently made available from for-profit, cause-consumerism intensifies competition for attention. This is a formidable challenge for any organization to address and overcome, especially a smaller one. They generally are not staffed or structured for rapid innovation nor are equipped to personalize their audiences’ experience in ways that YouTube, Netflix, and Spotify can. However, you can segment your donors in ways that these companies do their customers – and lift your engagement, participation, and gift rate in broadcast fundraising appeals.
Segmenting donors is the process of sorting your donors into groups based on similarities and then marking these donors in your database as a member of that specific group. But why do nonprofits need to segment their donors? The answer is simple: by segmenting your donors, you can better understand who your donors are, why they give to you, and how you can best communicate with them. Segmenting also allows you to approach your donors in a more personalized, meaningful way. If you are currently employing a “one size fits all” communication strategy, you need to keep reading.
Before jumping right into some of the different ways to group your donors, you need to understand a few important criteria for creating useful and successful segments:
- People in the segments need to be very similar to one another
- The different segments must be distinct from one another based on different preferences/needs/behaviors
- Over time, the segments are relatively stable
- The number of segments you make is manageable with your current resources
Keeping all of this in mind, we’ve laid out 6 common ways to segment donors that might work when you break down your donor database. Don’t fret if some of these won’t work for your nonprofit — it’s okay! The most important thing that you can remember when choosing segment categories is that they must be based on their ability to help you personalize a message to your constituents.
1) By preferred communication method: Different donors prefer to be contacted in different ways, and your nonprofit should respect that. Keep track of whether your donors prefer direct-mail, email, or phone communications, and then stick to reaching out in those ways. One benefit to adding a communication preference segment is that you can save on costs and will most likely have an improvement in response.
2) By preferred giving channel: This almost always directly correlates with how people prefer to be reached. If a donor prefers email communications, chances are they won’t appreciate receiving a solicitation for a donation in a pre-addressed, pre-postmarked envelope in the mail. Same goes for the opposite. Don’t send people who prefer direct-mail a letter that then asks them to go to a website to donate. Allow your donors different options of giving that best align with their preferred giving channel.
3) By annual giving level: Segment your donors by how much they have donated per donation period. If someone has made a substantially larger donation than others, they deserve specialized communications. You can also use this segment to identify which donors may be best to solicit for major gifts.
4) By new donors vs. recurring/monthly donors: Both of these segments need a little extra love in your communications, but for different reasons. New donors might still be on the fence as to whether or not they will give again, so you need to be sure to effectively communicate how much your organization appreciates their gift as well as how exactly their gift was used to improve the community. On the other hand, recurring/monthly donors need to receive steady acknowledgment and thanks for their commitment to supporting your organization in an ongoing way.
5) By demographics: It should not come as a big surprise that donors of different generations have different giving tendencies or that those of any other demographic segment are inspired to donate for different reasons. Break out your donors by age, gender, income level, etc. to get a better idea of who your donor is “on paper.” You can then use this information to tailor your communications. Not sure how? Say you have a donor’s address — it tells you what neighborhood they live in. You can then send them specific messages and invitations about events that are happening near them.
6) By donation frequency and timing: Try segmenting donors by have (and have not) given in the last six months or have (and have not) given in last 30 days. Sometimes lapsed donors have become lapsed because no one from the organization reached out to them for another ask. Re-engaging donors (both those who have and have not given recently) can yield not only additional gifts for your organization but also helpful insights into why donors have decided to not return.
This is by no means an exhaustive list of the ways you can segment your donors, but hopefully it gets the juices flowing on how you can start (or expand) donor segmentation at your organization. And remember, it may be very tempting to create categories for every single type of donor type or behavior. However, it’s best to keep your segments limited to what your goals are, and to that end, what your calendar year-end fundraising goal is.
If you don’t have a goal, you can’t really have an effective campaign, and especially not successful broadcast fundraising appeals. Lastly, consider the following steps, in sequential order, that are used by nonprofits who consistently raise more money year-over-year.
- Campaign’s fundraising-mission goal
- Forecast based upon last year’s results less donor attrition
- Resource allocation from budget
- Message and our general case for support
- Channels that will animate and deliver the message
- Segmentation and call-to-action for each
- Calendar for deployment
Don’t conflate campaign planning with campaign readiness – all of us, by this stage in November, should be putting more energy into ensuring we have the financial, human, and technological resources to “raise big” in the next few weeks.
Good luck and good fundraising, colleagues.