When nonprofit fundraising professionals focus on growth and consider new ways to expand their fundraising efforts, they often start thinking about how they’ll make major acquisition pushes. It makes sense to think about that; in order to grow, you’ll need additional support and revenue streams.
However, while acquiring new supporters is one path to growth, there are other sustainable habits that nonprofits can adopt to optimize their existing strategy and maximize revenue from their current infrastructure. These strategies help nonprofits retain more support and raise more funds over time. Once those strategies are in place, organizations can then start those acquisition pushes.
In this post, we’ll discuss the following strategies:
- Identify and track key fundraising metrics.
- Leverage smart donor segments.
- Reach your first-time donors.
- Focus on mid-tier supporters.
- Provide impact statements.
- Do more than ask for money.
Let’s dive in!
1. Identify and track key fundraising metrics.
How do you determine if your nonprofit fundraising strategy is going well or doing poorly? How do you determine what you’re going to push in your next big initiative or where your opportunities for improvement lie? If you’re not tracking the right metrics, your nonprofit runs the risk of prioritizing the wrong things and missing gaps in your current strategy.
The first way you can start maximizing your fundraising strategy is to identify and track key fundraising metrics.
Your nonprofit CRM is full of rich data about your supporters, fundraising campaigns, and total revenue, all of which allows you to track important metrics. The following image from Bloomerang’s CRM guide shows how you can use your donor database’s dashboard to view and continuously track those metrics.
As you can see, this nonprofit tracked their donor retention rate, total dollars raised, and campaign progress. Here are some other key metrics to keep in mind:
- Average gift amount
- Donor growth
- Percentage of recurring donations
- Donor lifetime value
- Number of donors
- Email open and click-through rates
Compile the metrics that are most important to your nonprofit. Then view them on a regular basis by incorporating them into your CRM dashboard (like above) or pulling monthly fundraising reports to review with your team.
The data discussed above is first-party data, or data that comes from within your organization. You can even go a step further and add third-party data about each of your individual donors to better inform your decision making and messaging. With boodleAI’s Enriched Analytics engine, you are able to append the predictive models that matter most to your organization to better understand your donors’ passions, interests, and preferences.
2. Leverage smart donor segments.
Donors are more likely to respond to messages that are written with them in mind, making this a key aspect of successful fundraising and retention strategies.
You can efficiently personalize your outreach efforts by leveraging smart donor segmentation strategies. We recommend using the following data points to create your segments:
- Recency of donation: When was the last time your donors gave to your nonprofit?
- Frequency of donations: How often do donors give?
- Type of donation: How are donors giving?
- Amount of donation: How much are donors giving?
- Reason for donating: Why do donors give?
- Interest in your nonprofit: What topics are donors most interested in?
From this information, you can create messages that will appeal directly to specific groups of donors. For example, an animal shelter might create a segment of supporters that includes people who care for dogs and another one for people who adopt cats. An organization might also reach out to donors who haven’t given in a long time and encourage them to get involved in a new way.
3. Reach your first-time donors.
Your organization should consider using the data from the last section to create a segment for first-time donors. Engaging your first-time donors presents one of the best chances for nonprofits to increase their donor retention rate.
Generally, the retention rate for new donors rests right around 20-25%. Meanwhile, after a donor has made their second donation, that average retention rate jumps to over 60%. Capturing that second donation (or golden donation) can help your retention rate grow dramatically.
Start by creating a dedicated segment in your donor database for your first-time donors. Then create a specific engagement timeline to engage those donors and gradually lead them to a second contribution.
This timeline should include more than just your second ask. Try building out the timeline to also include opportunities that thank them for their initial contribution and provide further educational materials about your mission. You might include the following as a part of this timeline:
- Calling donors to say thank you for their gift
- Sending a handwritten note to show appreciation for their support
- Sending a welcome packet with information about your mission
- Sending the most recent newsletter from your organization
- Inviting supporters to take an in-person or virtual tour of your facilities
After taking these stewardship steps, you can then ask these donors for a second contribution to your cause. By prioritizing stewardship, you’ll show supporters that you think of them as more than just ATMs; instead, you consider them true partners for your cause.
4. Focus on mid-tier supporters.
Too often, nonprofits focus on one of two things: their acquisition of new donors or their stewardship of major donors. Major gifts make up an important part of your revenue stream as many nonprofits raise 80-90% of their donations from just 10-20% of their donors. However, focusing only on these two groups of supporters will leave an important revenue source out to dry: your midt-tier supporters.
Nonprofits that focus on their mid-tier supporters take some of the pressure off of their major donor program while simultaneously feeding that program to steward new supporters. Here’s how:
- Mid-tier donors who remain engaged have the capacity to become your next major supporters. You can picture this engagement strategy as a stepping stone.
- Mid-tier donors have the capacity to provide substantial funding if stewarded and retained over time.
- Nonprofits can decrease their reliance on major gifts by increasing the percentage of revenue that comes from mid-tier supporters.
When you have a sustainable fundraising strategy, you’ll be able to grow more effectively. The first step to ensuring you don’t forget about your mid-tier supporters is to measure the health of this supporter group. Use your CRM to pull reports on the number of supporters you have in each supporter group. For instance, the following image shows Bloomerang’s sustainability pyramids:
Conduct effective prospect and wealth research of the supporters in your donor database so that you know who has the capacity to become new mid-tier and major supporters. Then steward them to the level at which they are most comfortable giving.
5. Provide impact statements.
When supporters give to your nonprofit, they want to know the service that they’ve helped provide actually benefits your mission.
Telling supporters about the impact their contributions had on your mission shows them that their gift made a difference and makes it more likely that they’ll give again.
Put yourself in a supporter’s shoes. You donated $200 to help provide school supplies for kids in underserved areas. Then you don’t hear anything from the nonprofit. But even if you’re indifferent about the lack of follow up, where is the motivation to give again?
On the other hand, let’s say the nonprofit sends you a letter that says, “Your gift of $200 helped provide 50 full backpacks with books, paper, and other school supplies for children like Johnny. Johnny wants to become a firefighter one day and his favorite subject is math. Your gift ensures he’ll be equipped for his math class.”
In this situation, you’ll be more likely to give again to help more kids like Johnny in the future because you see the value in your gift.
Fundraising Letters’ thank you letter examples demonstrate different ways you can show the impact of your supporters’ contributions. You can also use impact statements to encourage additional donations during the fundraising process by explaining the impact and value of a specific contribution. For instance, when asking for donations for school supplies, you might say, “An additional donation of $500 will buy the textbooks for an entire class of students.”
This gives your supporters a tangible action to take and encourages them to give again.
6. Do more than ask for money.
Never underestimate the power of not asking for money from your supporters. If the only interaction you ever have with supporters is solicitation, they’ll end up feeling like ATMs for your cause. Instead, create stewardship plans showing that your organization is putting in the effort to develop a true relationship with them.
A holistic approach to engagement keeps supporters coming back to contribute to your cause, retaining them for the long haul.
We recommend incorporating new stewardship activities into your regular outreach, including:
- Sending newsletters and informative marketing materials
- Personalizing all letters and emails
- Inviting supporters to stewardship events
- Inviting supporters to tour your organization’s facility
- Sharing testimonials of constituents
- Sending surveys where supporters give their opinions and taking those opinions into account when making future decisions
- Asking supporters to participate in advocacy campaigns
Gather data in your CRM about supporter engagement for each of these types of activities. From here, you can decide what your supporters are interested in and what activities may need to be improved for a better success rate.
Make sure your current fundraising strategy is optimized prior to focusing heavily on acquisition. With these tips, your organization will increase your donor retention rate and get the most out of your current strategy.
Prior to Bloomerang, he was the CEO and Co-Founder of eTapestry for 11 years, which at the time was the leading SaaS technology company serving the charity sector. Jay and his team grew the company to more than 10,000 nonprofit clients, charting a decade of record growth.
He is a graduate of Butler University with a B.S. in Business Administration. Over the years, he has given more than 2,500 speeches around the world for the charity sector and is often the voice of new technology for fundraisers.