5 Fundraising Trends for 2011

There's no way to accurately predict the future, but there are trends you can study to better prepare for the days ahead. At the Direct Marketing Fundraisers Association's year-end luncheon, veteran fundraising expert Roger Craver, founder of DonorTrends and editor of The Agitator, shared five fundraising trends to get on top of in 2011.

It's all about the connections
Citing statistics from an RSCG Global study and Morningstar, Craver concluded that people feel isolated and crave connections:

• 69 percent of people worry that society is too shallow, focusing on things that don't really matter.
• Today there are 130-plus socially responsible investment funds, up from 39 a decade ago.
• More than half a million people have loaned money to "working poor" entrepreneurs around the world via microfinance site Kiva.

It's up to fundraisers to provide those connections that donors desire, and technology is "the great connector, great enabler and great equalizer," according to Craver. To make the most of technology to connect with donors, fundraisers need:

• Better analytics — RFM is not good enough.
• Faster analytics — real-time and predictive.
• Integration with your CRM.
• Investment in a donor-relationship mind-set.
• Investment in innovation.

The rise of mobile engagement
Mobile is the fastest-growing channel of communications, and the mobile device is the most personal device people own, Craver said. Mobile is always with us and is far more transactional than the Web, providing vast opportunities for fundraisers.

According to Nielsen, smartphone adoption will increase by 50 percent by the end of 2011, and Convio projects a 90 percent growth by the end of 2014. Craver cited more mobile marketing facts:

• 54 percent of U.S. multichannel retailers will have mobile commerce within two years.
• Mobile marketing budgets are expected to rise 26 percent annually despite overall budget declines.
• Location-based features are projected to have the largest increase among mobile tactics, up more than 265 percent.
• Mobile spending increases of 141 percent on SMS and 137 percent on mobile video are expected.
• Mobile search is expected to be 20 percent of all search by 2012.

Furthermore, mobile transactions have been on the rise. In 2010, $158 billion was transacted through mobile payments. That number is expected to increase to $630 billion by 2014. According to PayPal, there was a 650 percent increase in Black Friday mobile payments from 2008 to 2009, and 52 percent of smartphone users have acted on advertisements within applications, Craver said — and mobile advertising is three times to five times more effective than online advertising.

When you consider these numbers and combine that with the $41 million raised for Haiti through the very limited text-to-give model, mobile provides a golden opportunity for fundraisers.

Better analytics
"RFM is not nearly good enough," Craver said. "How can you possibly build a relationship by only using and crudely applying three things about someone?" There needs to be collaboration and further insights to get a complete view of the donor.

"External attributes should be used to understand and predict future donor behavior," Craver said — geography, age, vehicle, home size, assessed home value, generations in household, net worth, mail-order donor, demographic cluster, etc. Craver then showed the difference between midlevel donors and legacy donors via the correlations of their external attributes.

The highest correlation to potential mid-level response:

• Home size
• Neighborhood home value
• Frequent credit card user
• Assessed home value
• Relative home value
• Demographic cluster
• Geography
• Make of vehicle
• Travel buyer

The highest correlation to future legacy gift response:

• Age
• Generations in household
• Net worth
• Household size
• Mail-order donor
• Dwelling type

Craver then shared a three-step process for combining donor data for superior intelligence:

1. Target: Identify a group of people taking the action you want to replicate, i.e., donors who have made a planned gift.
2. Model: Understand their common characteristics, and build a formula around those attributes.
3. Score: Use the formula to identify those likely to engage in the same behavior on your housefile based on similarities to target.

Down with 'donors,' up with 'customers' and 'connections'
Don't just look at donors as walking checkbooks and dollar signs. Connect with your donors and build relationships, Craver said. Treat them like customers, and have a focused stewardship plan. Communicate through multiple channels, and understand who's loyal and who's vulnerable to engage them appropriately.

Innovation and investment are key
"Invest to protect and upgrade your great asset," Craver said. Focus on stewardship and loyalty, midlevel donor programs, planned giving, effective reinstatement, etc. You must put in the time, money and planning to continue to grow your file.

"Experiment. Evaluate. And experiment some more," Craver added. Use analytics and predictive modeling with effective testing to take on new endeavors, whether it be in mobile or anything else.

Never stop investing and innovating to keep your mission alive.