Data-Driven Fundraising Tactics for Upgrading Mid Level and Major Donors

It’s an understatement to stay that 2020 was an unpredictable year for everyone, nonprofits included. Last year the charitable landscape entered a crisis as it tried to tackle both the continuation of services and the industry's move to work remotely. A year of ups and downs for everyone, 2020 had both positive and negative effects on giving.

2020 saw an increase in online revenue, mostly from one-time and monthly giving, by 40% for COVID relief-related nonprofits and 22% for non-COVID relief-related nonprofits. The increase in donations resulted in a 26% increase in monthly revenue overall.

While these are encouraging statistics during a global pandemic, they need analysis against the other insights of 2020. For a holistic view of giving in 2020, we need to break down more of the metrics that matter. Based on AFP's Fundraising Effectiveness Project Q4, we anticipate seeing the changes in giving over the year 2020 below:

• Total number of donors is up 7.3%

• Donations are up 10.6%

• Donor retention is down 4.1%

These stats resulted from a low first quarter in 2020, which without the new statistics of the first quarter of 2021 would have made the conversation about new donor retention dire. What AFP's Fundraising Effectiveness Project Q1 for 2021 shows is organizations that emphasize retention, welcoming new donors, and inviting them to be a greater part of their mission were successful. Specifically, the report showed:

• New donors are up 3%

• New retained donors are up 12.9%

• Repeat retained donors are up 5.5%

• Recaptured donors are down 2.8%
  

2020 was a year of mixed results, but the data shows that donor retention needs to remain one of the main focuses in 2021 and beyond. Seeing the generosity and attention given to nonprofits during 2020 as the world dealt with the effects of COVID-19 was truly special. Converting the increased one-time donations into long-term growth requires a commitment to retention.

A Blackbaud study found that only two to three donors out of 10 make a second gift. If there is a focus on retention, and you can get that second gift from a new donor, the retention rate going forward increases to 60% on average. This study is supported by a donorCentrics Summit on sustainers, which had a few interesting statistics to look at for the fiscal year of 2020:

• Single gift multi-year retention was 57%

• Median retention rate for multi-year sustainers was 85%

• Retention rate for sustainers that donate for three or more consecutive years is 95%-98%

The major takeaway? It is essential to transform as many of your new donors into multi-year donors as possible, building strong donor loyalty and retention.

donor recognition and retention

There are many ways to engage a donor, but the most valuable methods are the ones that make them feel like part of the organization. This strategy is called "donor-fusion." One of the simplest but most effective ways is personalized thank-you letters. If sent within the first 48 hours, thank-you letters can have a staggering impact on retention. While there are many ways to thank a donor, the best include conveying the message that the donor is part of the team.

Donors prefer not to feel like an ATM. They want to feel like they are helping to accomplish the goal of your organization. In fundraising, we refer to this concept as donor-centricity. To put it simply: celebrate donors for the vital role they play in your mission and for what they have helped accomplish within your organization.

A powerful way to elicit that bond is to send a series of emails or other correspondence that communicate the impact of their donation. Examples include personalized emails targeted toward a specific group for upgrading based on capacity and affinity.

Here is an example of one animal welfare organization that successfully used a targeted approach to its donor base to upgrade its mid-level donors. Fundraisers looked at a specific group of their donors to identify those with the capacity to give and affinity for giving to similar organizations. These donors fit the following criteria:

• High net worth

• Current mid-level donations

• High potential discretionary spending

• Interested in their cause

• Preferred digital communication

• Emails opened at a higher rate

With this segment of their donor file selected, they created a series of personalized emails highlighting the impact donors have, which eventually resulted in five $100,000 donations from donors that had never donated over $2,500 annually. This type of segmentation is attainable through careful analysis of a file or a third-party platform, like GivingDNA, which can give you actionable metrics based on your files.

This story is an incredible result of targeted donor recognition. So, while the traditional form of wealth screening has been effective, understanding how your donors think and feel about the impact they are having is even more impactful. This data shows us two things: it is better to start your donor recognition plans sooner rather than later, and we need to ask the right questions to understand our donors.

understanding your donors

In 2020, we can see that there was an increase in donations across the board. But again, we need to look at AFP's Fundraising Effectiveness Project Q4 reporting to see what is influencing that.

• General Donors (under $250) had a 15.3% increase in 2020

• Mid-Level Donors ($250-$1000) had an 8% increase in 2020

• Major Donors (Above $1000) had a 10.4% increase in 2020

These are all significant numbers, but the one category that stands out is the major donors. They account for 85.1% of the dollars donated in 2020, which is why it is valuable to ensure you have a strong strategy for upgrading and retaining your most passionate supporters.

Mid-level donors can be upgraded to major donors, just like we saw in the example above if you know where to look. The next step in that process is understanding what motivates an individual to make a substantial financial commitment.

However, asking the right questions when you have a potential major donor in front of you is difficult. The temptation to have a pleasant conversation over having a more goal-oriented conversation is strong. There are important insights you can gather from asking the right questions.

The right questions have some intrinsic qualities that you should keep in mind:

• Questions are purposeful, and the answers get noted strategically 

• Questions seek to find a deeper connection between the donor and the organization

• Questions allow donors to see themselves as central to the solution

• Questions allow room for follow-up questions 

These questions will result in a fulfilling conversation and make the donor feel valued and appreciated. This strategy is a compelling way to motivate major donors and create donor fusion. Making them feel heard and understood is essential to establishing long-lasting relationships with your donors.

While 2020 was a challenging year, it showed that in difficult times, people are still generous. They still care about the work that your organization is doing for causes they find important to them. That is what the numbers show, without a doubt.

When it comes to donor retention, fundraisers should focus on recognizing, thanking, and celebrating the donors whose contributions make achieving your organization's goals possible. Bring them into the conversation, show them what you are doing, and you will see that they will respond to that in kind. Through understanding your donors, their affinity, and capacity, you can upgrade donors and retain them for longer. 

If you are looking for ways to improve your organization's donor recognition programs, big or small, Eleven Fifty Seven can help. Eleven Fifty Seven offers custom designs built to fit your budget and engage your donors. With over 50 years of experience and over 3,000 partnered organizations in the United States and Canada, Eleven Fifty Seven is ready to help you achieve meaningful donor recognition. 

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This post was contributed by Rebecca “Becca” Segovia, a seasoned fundraising executive with a strong vision and passion to help nonprofits reach more donors and raise more dollars to further their mission. At Pursuant, Becca is a creative leader providing guidance across client services, marketing and sales to help nonprofit organizations achieve breakthrough results. She has a special affinity for omni-channel and relationship-based fundraising strategies aimed at increasing donor lifetime value and nonprofit health.

Donor Recognition: Physical And Digital Ways To Say Thanks

Donors make your mission possible. Your donors believe in your nonprofit’s mission and feel it’s worthwhile to give their hard-earned dollars away because they know it’s going to a good cause. However, while your donors likely aren’t expecting a physical return on their donations, a simple thank you can make all the difference in letting a donor know their gift was seen and appreciated. 

Almost all nonprofits know that showing appreciation is important and take steps to improve how they thank donors. Thanking donors creates a connection between your nonprofit and your supporters, which builds a support base for your nonprofit and encourages future donations. 

Of course, your donors don’t form meaningful connections to your nonprofit overnight. Managing donor relationships is an ongoing process that requires regular check-ins and maintenance. For this reason, donor appreciation is an investment that needs to be nurtured. However, like with any course of action that requires time and money, it can be done strategically, creating the most impactful experiences for your donors. 

To help your nonprofit brainstorm new (or optimize current) donor recognition strategies, this article will go over how to make the most of a few common ways nonprofits let their donors know they care:

1. Write an appreciation email

2. Send a donor thank-you letter

3. Build a physical donor recognition wall

4. Host an event for your donors

Donor loyalty and retention increases through ample and timely donor appreciation. Maintaining the donors you already have is one of the most effective nonprofit fundraising strategies. Remember, you are not thanking your donors just because it’s the right thing to do (which it is!), but because donor recognition is a key opportunity to strengthen donor relations and retain your donors by showcasing their philanthropic contributions.

1. Write An Appreciation Email

Email is most nonprofit’s bread and butter when it comes to communication. Sending a thank you email is so common that your donors might expect to receive one. Of course, this also means that appreciation emails are so routine that your nonprofit can stand out by putting a little extra effort into specializing your thank you emails.

While every donor should receive a personalized email, it’s impractical to write out an email to every donor. Instead, to ensure your emails arrive immediately after a donation is sent, use your nonprofit’s CRM to track your donors’ information and automatically send thank you emails. 

Your thank you emails should obviously express your nonprofit’s gratitude, but there are a few other goals to keep in mind when drafting your emails. Donor appreciation emails should:

1. Thank donors for their contribution. There’s no tricks here—a thank you email should include a profuse and heartfelt thank you. While the goal is to get donors to continue giving, this is not the place to ask for another donation or employ usual fundraising strategies such as creating a sense of urgency. Make sure gratitude and thankfulness are always the focus of a thank you sent in response to a donation. 

2. Confirm the donation and payment amount. Thank you messages over email can also serve an additional purpose: they let donors know their donation was received. This is why you should set up an automatic thank you email in response to donations. Donors want to know where their money is going and might get nervous about giving if their payment isn’t confirmed. 

3. Include personal details. Donors will give your nonprofit a few details about themselves when they donate. While you should avoid overwhelming donors with questions, you should make use of the information you do acquire to create thank you’s tailored to each donor that include their name, gift amount, and (if applicable) the specific campaign they donated to. 

Check to see if your nonprofit’s CRM comes with thank you letter templates. If it doesn’t, or the base ones aren’t to your liking, there are plenty of resources like this one that provide options for a variety of donor groups. When working with templates, be sure to customize them with specific information about each donor to help give your emails a personal feel.

2. Send A Donor Thank-You Letter

It might seem old fashioned, but direct mail carries a special, personalized touch that email has trouble replicating. Some of your supporters, including older, major, recurring, and other high-impact donors, typically prefer physical mail over an email as well. 

However, it’s important to recognize that direct mail has a longer delivery time, and research shows that donors who receive personal thank you’s within 48 hours are more likely to become recurring donors. This doesn’t mean mail should be discounted, only that it should be paired with other immediate strategies such as email. This means that when you prepare your thank you letters, be sure to consider the contents of your initial thank you so you don’t end up repeating the same phrases and words of appreciation. 

For high volume mailing campaigns, consider looking into direct mail fundraising partners. GivingMail’s guide to nonprofit direct mail outlines a few areas to consider when evaluating service providers:

• Cost. Donor recognition is an investment into future donations, but it shouldn’t divert funds that could go to furthering your mission. Compare direct mail prices to find a service that meets your nonprofit’s needs without straining your budget. 

• Experience. Your direct mail service provider needs to know what it’s doing to be an effective partner. For small nonprofits, your direct mail campaign is one of your most effective advertising channels, so take the time to review what services other nonprofits use and why. 

• Adaptability. As your nonprofit grows, you’ll have new mailing needs. Along with thank you letters, your direct mail service should accommodate fundraising letters, event invitations, and volunteer outreach. Your direct mail service should also be a resource that can answer any questions that may come up as you start sending out your thank you letters.

Direct mail thank you letters are also a great opportunity to get your board involved. Recruit board members to sign your thank you cards, especially ones going to major donors. This personal outreach shows your donors that your nonprofit is as invested in them as they are in your mission.

3. Build A Physical Donor Recognition Wall

Major donations can warrant more than an email or a card. While every donation is appreciated, donors who give thousands of dollars to your nonprofit should be recognized through a more permanent means, such as a donor wall. 

Donor recognition walls are special spaces that reside in your nonprofit’s facility and celebrate your top supporters by listing their names or group by giving levels. Thanks to their lasting visual power, donor walls are popular for honoring major donors, large contributors to capital campaigns, or planned gifts. 

Compared to emails and thank you letters, donor walls take time, planning, and a more significant investment. In addition to listing your donors’ names, your donor wall should also represent your nonprofit’s brand and accommodate the necessary space for adding future donors. Consider the following aspects of your wall before starting construction:

• Who is being recognized. Even the biggest donor walls can only accommodate so many names. Be clear about who is being recognized and why—whether it’s based on a certain donation threshold or a specific campaign.

• Wall budget and scale. Your wall is a more significant venture, but it’s an investment in your most generous donors. Some donor walls are simple displays, while others offer a more engaging experience that encourages visitors to explore to find their names. 

• Promotion. The donors your wall recognizes will only appreciate your effort if they know the wall exists. Consider hosting an in-person event with featured donors or live-streaming the unveiling if gathering together isn’t a practical choice. 

Your nonprofit may not have experience about how implement a donor wall, but that’s pretty common, so don’t worry! Get inspired by looking at how other nonprofits recognize their major donors. Employing a designer or consultant can also help your nonprofit pin down a design strategy that will capture your nonprofit’s brand while still giving your donors center stage.

4. Host An Event For Your Donors

While in-person gatherings aren’t practical right now, hosting an event is still a memorable way to celebrate your donors’ contributions. These events usually act as send offs for major campaigns and serve to recognize the largest contributors. 

Here are a few common donor recognition event types:

• Concerts are a fun and classy way to stop and have a bit of fun with your donors. Consider what tone you want to establish for your event and pick your music ensemble accordingly. Reach out to local musicians in your community or consider partnering with nonprofit music organizations who might also be interested in connecting with donors. 

• Galas bring people together to enjoy good food, drinks, and entertainment while having fun dressing up. Galas also lend themselves to toasts that recognize specific contributors, so prepare and schedule speeches beforehand to ensure major donors receive an extra thank you during the night. 

• Virtual events may seem less glamorous than other appreciation events, but they also allow your nonprofit to recognize a wide group of donors no matter where they are in the world. 

Donor recognition events are an investment of resources, but retaining major donors allows your nonprofit to fundraise more effectively in the long-run by maintaining current donor relationships instead of starting from scratch over and over again. 

According to Bloomerang’s report on donor retention, 9% of donors stop giving because they can’t remember who they donated money to, while another 18% stop due to poor service or communication. An event that sticks in your donors’ minds can be the difference between a continued giving relationship and an abandoned one.

Wrapping Up

Donors want to see your nonprofit fulfill its mission, but they also want to know their support is appreciated. Thanking donors not only lets your supporters know their gifts are being recognized, but it has the potential to create a relationship that lasts for years between your nonprofit and your supporters. 

Donor appreciation can take several forms. Emails, letters, donor walls, and events all make an investment in your donors that in turn inspire them to continue supporting your nonprofit.

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This post was submitted by GivingMail, a direct mail company that is powered by people—people whose drive is to help charities fundraise. We've been doing this for 70 years and have helped hundreds of the world's largest charities raise millions of dollars.