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Where Have All The Donors Gone

Where Have All The Donors Gone

Is your year-end campaign ready to deliver? The latest Fundraising Effective Project stats show that total donors declined 6% in the second quarter, and revenue was down 7%. Don’t be part of the trend: our customized, affordable analysis will show you where your biggest opportunities are, and how to cash in on them!
Click here now to take advantage of our money-back-guarantee.
The cost of $600 for the analytics will be refunded to you if results don’t meet your expectations.
Donor Insight. Fundraising Action

It’s not all bad news.  Overall, 2018 revenue increased by 1.6%.  But realistically, a trend that shows fewer and fewer donors giving slightly more revenue is unsustainable and spells real trouble for the sector.

Where we left off

At the end of 2017 the sector saw an unprecedented fourth quarter that yielded 10% more revenue and 5% more donors as compared to 2016.  Then in the First Quarter report we began to think the sky was falling. We started the year down ( -6.6% )in the number of donors and down (-2.1%) in revenue through the second quarter of 2017.   Then,  after a tremendous 2017 Third Quarter that saw the sector ahead on revenue—up  +2.6% for the first three quarters.  We  even made some gains in the numbers of donors bringing the decline up to -4.3% year- over- year compared to 2016.

Perhaps  at the end of 2017 we were overly optimistic. Some experts felt those 2017 results exceeded expectations because of newly passed tax reform laws, others thought it could be related to the disaster response.

2018 Fundraising Peformance - Donor Retention and Revenue

Where we are now?

Unfortunately, we're still gazing out the window, looking for that reprieve to show up.  It's nowhere in sight.

The results from Q4 2018 are concerning.

🚩  Number of Donors are down -4.5% in 2018 compared to 2017.

🚩  Revenue is up 2.6% for the $1,000+ donors. Revenue is down  -4% for the $250-$999 group.  And down -4.4%  for smaller gift donors under $ 250.

Where will we go from here?

It is difficult to establish causality behind this trend, but Richard Rubin from the Wall Street Journal outlines how this may be related to the new tax law and the subsequent increase of the standard deduction. The data supports that claim as we have just witnessed the lowest fourth quarter in donations.

What can you do about it?

3 Action Steps:

  1. Benchmark your success
  2. Evaluate you acquisition and reinstatement investment strategies
  3. Set your goals and track monthly

Step 1:  Benchmark Your Success

A vital first step is to ‘know your numbers’.

  • Have you retained more donors than you did last year?
  • Has revenue increased or decreased?

If you don’t know, find out. We’re here to help if you need it.

Step 2:  Evaluate Your Investment Strategies

  • Are you balancing new donor acquisition with lapsed reactivation?
  • Are you spending enough on donor retention?
  • Do you know how many donors you need to retain so your file doesn’t shrink?

We can help.  Ask us to generate the 'Leaky Bucket' analysis and action plan for you.

Step 3:  Set your goals and track monthly

Be proactive and stay on top of the health of your donor file.  Set your goals [retention and value] and track monthly.

  • Retention
  • Upgrading
  • Revenue
(Blog courtesy of DonorTrends)

Putting Donor Identity into Practice

In our last issue of Donor Centric, we gave an introduction to the concept of donor identity and the role that it plays in not only donors’ decisions to give in the first place, but also in their motivation for giving.

If your organization is to maximize its ability to attract, reach, and resonate with donors, you’re going to need to narrow your focus and make donor identity a point of emphasis.
But how do you achieve that?

Here are two things your organization can start doing today, to ensure that you are putting your best foot forward.

1. Collect Data
The most obvious first step is learning about your donors! You can achieve this in a few different ways. First, check out your social media demographics. If you have a decent following on any social media platforms, use your platform’s analytics tool to start viewing what data is available on your followers. You might find that your followers, and the people who gravitate toward your organization, are much different than you had initially thought!

Next, issue a survey to your email list. If you don’t already have an email list – whether it’s through a newsletter subscription or otherwise – now is as good a time as ever to start putting this together. Send a survey out to those on your list, asking people to provide a little information about themselves. This might be in the form of a short questionnaire, a poll, or another method. You don’t need to pry into someone’s personal life for this to be effective. Learning about someone’s occupation, the country or state where they reside, and a few of their interests and passions can provide your organization with a wealth of insight.

Finally, just ask. Send an email to current donors only, and ask specifically why they decided to give to your organization. This will help you identify your organization’s greatest pull factors so that you can prioritize them when it comes time to make your next appeal to new prospects or lapsed donors.

 

Grassroot Communication | Donor Identiy

2. Diversify Your Appeal Strategy
Now that know a little more about your different donors, it’s time to start putting this information to use. But remember – the degree to which you will be able to execute this is dependent on your organization’s resources, as well as your willingness to do so. The vague blanket emails you might send to thousands of people at a time? It’s time to throw them out. It’s time to start diversifying, and you can achieve this in two different ways.

The first option is to use the data you have collected to segment your target audience into different streams. One group might consist of activists who are passionate and vocal about human rights or equality, for example. A second group might consist of people who have recently donated to a nonprofit. A third group might consist of people who are active volunteers at a shelter. Wherever it makes sense for your nonprofit to compartmentalize and start different appeals, do so! Now use this information to tailor each appeal to its specific demographic.

Another option is to make your next email or letter more inclusive. Perhaps you don’t have the resources to create appeals for 10 or 15 different groups at a time. But you can certainly make your appeal relevant to more people. We all can! For example, if your nonprofit provides shelter for animals, your letter needs to appeal to the different types of people you’re looking to convert into donors. For the passionate animal lover, you might want to include a heartwarming story of an animal that your shelter was able to save. For the person looking to adopt a pet, you might want to mention that you are housing animals that are in need of permanent homes.

Can you see why investing in donor identity is so important? If you don’t understand your donors and what motivates them to give, your appeal is going to be vague, dull, and ineffective. The result? You’re only going to have but a fraction of the impact that your nonprofit could have otherwise . . . Start learning about your donors and diversifying your appeal strategy today, and you’ll be well on your way to reaching and converting more prospects into donors.

The first step is finding out each donor’s identity and reason for giving. So how can we do that? Stay tuned for Grassroot Communications’ Donor Centric newsletter Here’s a clue: we can guess, or we can ask. We will discuss both in upcoming articles.

Amazon.com Recommends New Products; We Recommend New Donors

Ever wonder how sites like Amazon.com are able to recommend new products to you that they know you will enjoy?
One word: data.

Simply put, the site looks at your past search history, purchasing behavior- even likes on social media in order to predict what you may want to purchase next. Now imagine that very same idea applied to your organization for the purpose of finding new donors. By looking at prospects’ past voting history, giving behavior, even their political ideology, we can predict which citizens in your area are likely to respond to an appeal from your organization.

This is a powerful tool for acquisition campaigns; instead of reaching out to random people or blanketing an entire geographical area with generic campaign materials, we can;
• Target specific groups of prospective donors
• Send them personalized appeal letter
Thus, the same data that helps us track down high-quality prospects gives us hints on how best to approach, engage and convert those prospects.

This type of micro-targeted outreach is ideally suited for non-profits and advocacy organizations trying to increase their visibility, build their base of support, and grow their revenue. And it’s all made possible using predictive analytics.

When you think of donor analytics, think Grass Root Communication.