Raise More By Segmenting Donor Data and Targeting Messaging

Gauging success isn’t necessarily about comparing ourselves with others, but is instead characterized by the effort we make to improve over our own past performance. Fundraising to support the mission of nonprofits is no different.

A few markers of success we may consider are:

Strengthened relationships with current donors and prospects. This goal is based more on observation than qualification through data, but can be glimpsed in each of the success measurements below.

Donor attrition rate. The number of supporters who gave financial gifts at one point but who have ceased to support the mission financially. The average donor attrition rate hovers around 60% every year. Said another way, the average donor retention rate is generally about 40% annually. This is an abysmal number to target though — if 60% of your friends left every year, you’d be in a pretty sad state of affairs! Organizations that are achieving 40% donor retention rate should be pleased that they are in line with the industry standard, but should absolutely aim for achieving much higher donor retention.

New donor acquisition rate. This number shows how many new donors are gained each year. If your organization is making a concerted effort to reach individual donors at a more grassroots level, then this measurement is certainly important. It is a tricky one though, because you absolutely want to expand the number of supporters your mission has, but you do not want to do it to the detriment of current supporters. So, if you have a high rate of new donors, but an abysmal attrition rate, it is time to make some changes.

Average yearly gift. It is a positive sign if current supporters increase the amount of their gifts to your organization each year. It signals that you are doing a good job stewarding relationships and showing supporters the impact that their financial gifts have on people’s lives. Increased average yearly gift may also mean that you’ve received more large gifts that lifted the total average.

Communications. When considering how people react to your communications, open rates are important, but you should aim for positive engagement rates. It is good to evaluate your email and text open rates to see what types of communications, subject lines, and day and times of distribution work the best for your various audiences, but click-through rates and donations as a result are ultimately what you need.

Social media engagement. Numbers are also important on social media, attested to by numbers of followers, comments, re-shares and funds raised on each individual platform.

The thing that all these success measurements have in common is communication. How do you share your nonprofit’s messages, and are you reaching the right people with the right message? Let’s look at how you can identify various groups to segment with your donor management systems (DMS) so that you can tailor messaging specifically to them.

One Message Does Not Fit All

One of the more important concepts we can understand when communicating with financial supporters and potential supporters of our nonprofits’ missions is that one message does not fit all.

There are several types of communication mistakes that give your donors the impression that you have not taken the time to know who they are. 

One example is to send an email thanking someone for attending an event for which they never even registered. If you have an event, do your best to only thank people for attending who were actually there. Sometimes it can be cumbersome to separate out who was registered versus who actually showed up, so you may decide to cover your bases with a note like, “If you weren’t able to make it, here were some of the highlights.” But you should at least separate out people who never even registered before sending your follow-up email.

Another example is to mail or email with the salutation “Dear Friends.” Organizations may be unsure if their donor data has correct names and spellings, has consistent capitalization or has salutations for each donor. Whatever the reason avoid using something as generic as “Dear Friends” at all costs. This is especially true for current donors. If a person has given to your organization three times in the last three years and they then receive a “Dear Friends” direct mail piece, you’re showing that you have not made the effort to know or appreciate them.

Segmentation Preparation

What should you do in order to send the right communications to the right people? Segment! The ability to successfully segment data in your nonprofit’s DMS relies on having good data in the system.

A DMS is an amazing tool when it is used to the fullest. To be able to segment your lists in ways that are helpful to fundraising, your DMS must have:

• Clean and accurate contact information.
• Name of campaigns, funds and/or appeals. How each of these is defined will vary dependent upon which system you use, but this allows you to identify which gifts came as a result of which efforts and compare the success of those efforts year-to-year
• Records of each donor gift given. This can include:
  • Gift date
  • Gift amount
  • Name of campaign, fund or appeal that was the catalyst for the gift
  • Gift type (e.g., cash, in-kind)
  • Any designation associated with the gift (did the donor ask to restrict its use?)
• Source fields to assist in identifying audience interest. Was it a referral from a board member, someone you met at a community event or a response to a magazine or social media ad? Communications can be sent to groups based on the source of their introduction to your nonprofit.

Segmentation List Examples

Now let’s take a look at the types of data dissection that will be useful to you. You will most likely need to learn to create filters in your DMS to pull lists based on different characteristics. 

New donors. You should contact and thank new donors in a variety of ways when they first give a gift (this does not require list segmentation). You may also then want to send a specific type of appeal to these new donors at some point during their first year of engagement, at which point, you will want to pull a list of “first donation date in this calendar year.”

LYBUNT.  These are donors who gave “last year but unfortunately not this” year. This is a very popular list segmentation because it shows known supporters who are likely to give again if you’ve been a good donor steward. Some organizations wait until close to the end of a fiscal year to appeal specifically to LYBUNTs. Smart nonprofits drill down a bit further and send renewal communications based on gift dates. For example, if a donor gave in February last year, the organization will send a renewal appeal to them in January asking them to repeat or increase their gift again this February.

Years of consecutive giving. Years of giving consecutive gifts are a true signal that the donor believes in your organization and wants it to be successful in delivering on its mission. These donors can be singled out for specific thank-you and recognition opportunities. Additionally, donors who’ve given in small amounts for many years are the best planned-giving prospects, so you may also want to target messaging specific to planned giving.

Area of interest. Your organization may have an array of programs that people have shown interest in or given a restricted gift to in the past. This type of list gives you the opportunity to tailor a message to people with that specific interest.

Unique campaigns. People may be donors to or have shown interest in a specific campaign, such as a capital campaign for a building or major capital investment. You will want to maintain the ability to separate out this list to send updates and related future appeals.

Characteristics. Depending on what information you have tracked in your DMS, you can also segment lists by certain characteristics. For example:

• By age of donor/prospect for specific topics of interest to young supporters
• By zip code or town if you are inviting people to a gathering by area or region
• Potential for major gift donation, based on previous giving and donor research

Method of communication. If a supporter interacts with you the most on a specific social media platform, it may be worth noting this in a field that you’ve added to the database to track this communication preference. This will enable you to target certain supporters on the specific channels where they interact with you the most. Additionally, you can target communications based on which campaigns and appeals sent via specific communication channels resonated with specific donors in the past. An example of this would be to target new messaging to anyone who opened and or gave in response to a specific past email appeal.

Volunteers and vendors. Don’t forget, volunteers are your best donor prospects because you know they already care about the organization. Tracking volunteers in your DMS will enable you to pull a list of volunteers to be used for specific communications. Likewise, vendors that your nonprofit engages on a regular basis are also prospective donors to the organization.

These are just a few examples of ways you can segment records in your DMS in order to target specific messaging to unique groups, such as donation renewals and increases, location, area of interest, and relationship with the organization.

When you first start segmenting data and creating unique communications and appeals for various groups, it can feel a bit overwhelming. But once you begin to see the increased response rates, it will become clear that people appreciate communications that show that the organizations they support have taken the time to get to know them and to appeal directly to them. Personalization over generalization leads to better outcomes every time.