Data-driven Fundraising Ideas for Nonprofit Organizations

Data-driven Fundraising Ideas for Nonprofit Organizations

TGG recently hosted a roundtable on nonprofit fundraising. We invited our clients and other nonprofits in the community to discuss strategies for increasing donations, expanding their donor base, and appealing to millennial donors.

The forum was moderated by Steve Goldstein, a Consulting CFO with TGG. Steve not only serves some of our not-for-profit clientele, but also founded and runs his own non-profit, Starfish Asset Fund, which provides low interest loans and financial education for transitioning foster youth.

We’ve compiled some of the takeaways from the roundtable because we believe these insights apply to a broad range of not-for-profit organizations.

The agenda covered many aspects of marketing, with an emphasis on using technology and data to improve results.

There were many great discussions and actionable items that can be applied by any nonprofit organization intent on realizing their mission. We have summarized a number of the top takeaways:

Segment Your Target Audience by Donor Behavior.

Segment your target audience and tailor your communications to each specific donor group. Think beyond the obvious segments (age, gender, income, new/current donor).

Try to segment along behaviors that will influence people to donate. Leading organizations send different messages based on time since last donation, amount of last donation, whether they had volunteered in the past vs general interest, where else they donate, activities they participate in and other specific behaviors.

By segmenting in new ways and tailoring the timing and the message specific to the group, several organizations at the roundtable indicated that they have seen both increases in dollars raised and the number of active donors.

Perform a Churn Analysis.

A churn analysis can help you see which segments are falling short. This type of analysis is often utilized by larger and more sophisticated for-profit businesses, but it need not be complex. Analyze churn by:

  • Donor retention rate (by meaningful segments such as annual dollar amount)
  • Donors increasing donations (by segments)
  • Donors decreasing donations (by segments)
  • Donors who attended xyz event vs those that didn’t (by amount)

Technology makes this analysis much easier and less time intensive than it used to be. It’s often a function of taking the time to determine what is most important for your organization to analyze. Once you have this information you will find that tailoring a specific message to these people will often result in an effective donor strategy (see next tip).

Tailor Your Message.

Many organizations specifically noted issues reaching millennials. Some saw success when they focused on telling a personal story versus overarching facts and figures. Showcase real people and real stories. Using different types of media, such as video or podcasts to showcase the personal impact of the story was also noted as having a positive impact.

Another consideration was messaging related to specific causes or funds (for those that oversaw organizations with multiple donation options).

Many nonprofit participants found that the percentage of donations tied to specific causes vs the general fund had increased significantly in recent years. This trend is most pronounced with the youngest age groups. Use this knowledge and trend to your advantage by tailoring the right message to the right audience and offering donors a choice in their giving.

Mobilize Your Advocates.

Many attendees (but not all) asked or required their Board to get the word out in a meaningful way. We discussed a number of ways that organizations could better use those that they had a relationship with – this ranged from volunteers to employees to current donors to followers on social media. Nearly everyone agreed that they could do a better job in this area of tapping into their most powerful advocates to share their message with their networks.

Engage on Social Media.

There was a wide range of social media usage within our group. Some effectively used social media as their primary communication tool and used more than one channel (Facebook, Twitter, Instagram, LinkedIn, etc) to achieve different goals. Others barely had a presence at all.

Some spend real dollars on social media campaigns and others spend nothing. The majority of the group agreed that they should dedicate more time and attention to this area – even if direct mailings still provide the greatest ROI today – because it will continue to gain importance as time goes by.

Design Digital Messaging for Mobile First.

The world has gone mobile, especially for younger donor groups. Most of your communication will be viewed on a mobile device. Many organizations still design for the desktop first and do not pay attention to how messaging renders on a mobile device. The paradigm should be reversed–design for mobile first.

Make It Easy!

One of our favorite moments (because it was so actionable) from the session was when we were discussing an organization’s challenges in reaching new donors, especially younger ones. The organization had been engaging more on social media and thought they had a great message in a recent email campaign. Unfortunately, the results were not what they had hoped.

While the group was debating “why,” we recognized that they had not included a one-click “Donate Now” button in the email. Instead the recipient had to click to a website to learn more, then find the donations page, then decide what cause to donate to, etc. etc.

Make it easy to support your organization. Include a one click donation button. Make sure the button is “above the fold.” You might limit donation options (causes and dollar amounts) and offer lower amounts that will appeal to your target audience.

Consider Recurring Donations.

One of the ideas that nonprofits can take from their for profit counterparts is the idea of recurring payments and auto-renewals.

Position charitable giving as a smaller monthly payment (less than the cost of 1 latte per week!) versus a larger one-time donation is successful. Many organizations at the roundtable were already doing this.

However, many for profit companies (e.g. magazine subscriptions) take it a step further by auto-renewing a membership each year – essentially replacing an “opt-in” option with an “opt-out” one, which encourages long-term members at a much lesser renewal cost and effort – leaving more time and energy to focus on new donors.

Everyone agreed that it is important to be open and forthright about the policy, but were excited to at least test this idea.

Test. Test. Test!

Finally, the advice that wove its way through the conversation most often was: test everything. Try different variations of creative, copy, and headlines. Most importantly, test different asks and calls to action. A/B testing is incredibly easy with technology. You should consider adopting a “continuous improvement” mentality.

Many marketers refer to this as “wash, rinse, and repeat.” Keep testing to understand what works best for your audience. The goal of every test should be to learn something, this empowers you to then tweak something else and see if your success rates improve.

Fundraising for nonprofits, just like direct marketing for a for-profit business, is a continual challenge and requires continuous improvement. There are always new ideas to try and lessons to be learned from others.

Many of the same best practices, tools and tricks apply across both spaces, while some are unique to nonprofit organizations. We hope that you are able to find at least one idea to test (and test again!) in your organization.

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