A Quick Overview: Donor Segmentation for Fundraising Appeals
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Since we all know one size doesn’t fit all when it comes to fundraising, most development professionals struggle with personalizing communications year-round, and this is especially true for fundraising appeals.
In a perfect world, every single donor would receive a personalized communication from you highlighting mission activities they care about and how they can make a difference.
Since we’re not living in a perfect world and we don’t have endless amounts of resources, segmenting is the next best option for personalizing communications.
Segmenting is simply organizing all of your supporters into groups or categories and ensuring your communication is customized to their interests, preferences, and giving abilities.
For example, it would be inappropriate to ask a new donor that gave $25 to your organization this year to make a year-end appeal gift of $5,000. It might happen! You never know! But the chances are slim, so it makes more sense to grow your relationship with each segment of donors and make appropriate asks that are most likely to result in a gift for your next initiative.
Another example is mailing a donor a letter asking for support when they’ve given exclusively online for the past three years. If they prefer electronic communications, then send them a request via email and save your organization the cost of a “snail mail” letter.
The whole concept is to meet people where their interests and affinities lie and make a compelling ask that is specific to them. By taking the extra time to segment your audience you’ll find greater success in your fundraising efforts.
Consider these strategies for segmenting your supporters:
Segment by last giving timeframe
Lapsed donors – Lapsed donors are individuals that gave a year or more ago. At some point they were motivated to support your organization. Did they drop off because they weren’t asked this year or for another reason? Customizing your message by letting them know they’re missed and needed is a great place to start.
I gave to a nonprofit every month for a few years. When I switched jobs, I called to talk with a staff member and cancelled my monthly membership. We talked about why I was cancelling at the time. Since then, they’ve called me several times to ask me to return. However, they never asked me if my situation has changed and what would motivate me to return as a monthly donor. In the time since I cancelled, they’ve drastically changed the content of their messages to one I disagree with.
If a staff member started the conversation with learning more instead of jumping into an ask, they could’ve learned more about my passion and interests and adjusted their ask appropriately. Instead, I just decline to return each time they call.
Taking the time to get to know your donors is crucial – time consuming, but crucial. Lapsed donors already care about your cause – so spend the time to find out why they left and try to nurture their return before investing in brand new donors that you have to convince to care about your cause.
First time donors – Many donors who gave a gift to your organization for the first time are simply testing the waters. They want to see how you communicate your impact and need and feel as though their support matters.
Before you make an ask for a second gift you should always report back on how their gift was used to move your mission forward. It could be through a newsletter, snail mail letter, email, or with note or phone call from a volunteer. Think of first time donors as a new friend – one you need to get to know and cultivate before jumping into a big commitment.
Monthly donors – These donors are arguably some of your most passionate supporters. Take into consideration how you’ll ask them for additional support if they’re already giving to your nonprofit every month. Perhaps you can ask them to increase their monthly gift by $5 or take advantage of a matching gift opportunity that will double their impact.
Segment by giving amount
Sorting your donors by total giving amount in the past year is a great way to make an appropriate ask amount. For example, major gift officers may ask you not to solicit your top level donors with a year-end appeal at all because they’re currently working on an ask that is much larger than what the appeal would generate. Considering the best personalized, individual strategy for major gift donors is essential and important to the donor’s experience with your development team.
Alternatively, your mid-level donors and under should be segmented to ask for an appropriate giving amount based on their average gift amount. As in the example at the top of this blog, consider customizing your giving amounts on the envelope or website landing page based on your donor segments. Oftentimes you can create dynamic web links that you can customize (aka different links go to different donors based on how you segmented the list).
Determining which donors are considered major, mid-level and under will be different for every organization. Look at all of your donors and the amount they give in total for the year as well as individual giving amounts. Coming up with an average individual gift and average annual gift will help you create the various levels that make sense for your nonprofit.
Segment by group
Board members – Your board members should be investing in your mission annually already. Therefore, you may need to alter your fundraising ask to acknowledge their tremendous dedication to your mission and share why they should give to your latest appeal. Alternatively, you may want to ask one or two board members to participate in a matching gift for the appeal, in which case you may need to exclude board members from the outreach OR challenge them to match their peers’ gifts. There are many strategies to soliciting board members, but it’s important to identify these members in your database and be able to include or exclude them from lists. Don’t forget about past board members as a group as well!
Volunteers – People give of their time, talent and resources in many different ways. Some people are very passionate about donating their time, but would also consider a gift if asked. Segmenting these individuals is a great way to recognize and appreciate what they already give to your organization before making an ask.
Legacy members – Not to be forgotten, are the supporters that have acknowledged that they have your organization listed in their will and/or are participating in an annuity gift (or the like). Addressing their tremendous commitment in your ask and making them feel appreciated for their future gift will go a long way in securing immediate gifts through various appeals.
There are many additional ways you can segment your donor base: by communication preference (text, mail, email, etc.), by demographics (age, gender, geographic location, etc.), by affinity/cause (think love of cats vs dogs or youth programs vs elder care programs, etc.), and by past activities (ex: event attendees, tour attendees, peer-to-peer donors, etc.).
This blog focused on fundraising appeals, but all of these segments should also be used for great stewardship strategies. Don’t forget to thank your donors between asks and remind them of the impact their gift has made.
If your database is in desperate (or just slightly frantic) need of clean-up to give you accurate results to segment your audiences, we can help! We work with nonprofits frequently to clean up their data, add fields to track various segment points, create reports based on segment interests, and train and empower staff to pull this data for various appeals and mailings.