Strategies Can Bolster Fundraising If the Economy Turns Rocky

Although economic growth and jobs data continue strong at the start of the year, many AccuList® nonprofit clients still express anxiety about the impact on charitable giving of higher inflation or even recession later in 2023. Here's the advice from fundraising veterans: Stay the course and avoid the temptation to cut back on direct mail or digital marketing. When fundraisers reduce the channels and frequency of donor requests, they cut opportunities for giving and erode long-term connections. 

A better way to offset economic drags is to increase the efficiency of donor acquisition and retention programs. For direct mailings, costs can be reduced by tactics such as modified package size and pre-sorting, as well as by greater mailing list efficiency. Using the best-performing vertical lists and modeled data can boost donor prospecting ROI, for example, while house donor lists can select out lower-value or lower-response segments. 

In tougher times, nonprofits also can't afford the waste of bad data. OneCause, a provider of event and online fundraising technology, found that only 18% of nonprofits reported having enough data and insights for cost-effective decision-making in 2022! So fundraisers should prioritize clean data—de-duped, complete, consistent, deliverable and actionable—for cost-effective targeting. 

Fundraisers also can take better advantage of the fact that today's donors are multichannel responders by coordinating direct mail with boosted social media outreach as well as online and mobile giving. In-person fundraising events are expected to make a comeback in 2023, too. OneCause reports 83% of organizations plan to hold at least one in-person event in 2023. Data supports that investment in event and online efforts: Over half of nonprofits surveyed reported generating 21% of operating budget from event and online fundraising in 2022. 

For help with donor acquisition, multichannel fundraising and data management, see https://www.acculist.com/fundraising/

Case Studies Offer Fundraising Mail Tips

As nonprofit fundraisers enter their busiest direct mail season, they may want to check out three case studies from the CharityHowTo blog, showing some basic ways to pump direct mail performance. Donor list segmentation is essential, and delivers dividends even for those starting from scratch. For example, the blog post cites the case of a new executive director at a human services organization that lacked results of historical appeals in terms of targeting and pieces sent. The executive director decided to develop a recency, frequency, monetary (RFM) segmentation and so exported the donor base and began to divide it into sections by last gift date, amount of donation (high to low) and most recent to older. In this case, the executive director broke out donors who had given a gift of $250 or more at some point; these "best" donors were going to receive the same appeal as the others, but the new executive director was also going to include a handwritten personal note with each letter and send the appeal by first-class mail. All other donors were broken out by recency, treating the 0-24 months donors as "active" donors, and then further segmenting for those giving below $100 and those giving $100-$249.99. There was a separate segment of "lapsed" donors defined as donors who hadn’t given in the last 3 to 5 years, and even a deep lapsed segment who hadn’t given in 5 years or more. Then all segments, coded for results tracking, were mailed a personalized letter and personalized reply form. Even though just starting out, results improved in terms of total donations and efficiency, with an overall cost of just $0.04 for every dollar raised (compared with an industry average cost of $0.20 cited by the blog). Plus, the nonprofit now had proven segmentation results for use in further improvement of efficiency and targeted messaging. Increased mail frequency is one way to increase donations, but nonprofits worried about costs and donor fatigue often err on the conservative side when deciding how frequently donors should be mailed. The blog cites the case of a homeless shelters executive director who was initially against mailing more than twice a year, even though they had some 65+ homeless people that they were supporting each day. Because they needed to raise more money, they finally tried adding two more appeals per year. Of course, the added appeals increased costs, but they also increased net revenue by 32%. The cost to raise a dollar with two appeals was $0.12, and with 4 appeals went up to $0.20, yet the overall net dollars after costs rose from $51,227 to $67,590. Finally research shows that donors who gave most recently are also most likely to give again. For doubters, try testing a segment of recent donors (0-3 months or 0-6 months). And of course, you will want to segment out those recent donors who give the largest amounts and offer special treatment, such as an appeal with a personal note of thanks for their gift and an indication that you’re just sending the latest appeal for their information only (even though of course you’re going to include a reply envelope). However, the case study of an environmental organization shows why hesitancy to re-mail a donor too soon is often misguided. The organization typically mails about 5 times a year; once someone reaches the $1,000 level, they go into a personal note stream. Results show that while the 7-month-to-one-year donors deliver the most net revenue and average gift, the next best performing segment is the recent 0-to-3-month donors in terms of net revenue and average gift! For a link to more details and charts, go to our website blog post at https://www.acculist.com/case-studies-show-how-nonprofits-can-improve-donor-mail-results/

Fundraising Challenged by Gen Z, E-mail, AI

For nonprofit fundraising, 2019 will be another challenging year. Successful direct marketers will need to adapt to changes in demographics, technology and donor targeting, to name just a few trends recently cited by the Donorbox Nonprofit Blog. For example, Donorbox is sounding the alert ahead of the next demographic wave. While the Millennial generation is still the biggest cohort in the workforce, Gen Z is arriving. Born after 1996, they now make up an estimated 27% of the population and will account for 40% of all consumers by 2020. How are they different? The "2017 Global Trends in Giving Report" found that Gen Z members are interested in giving to many different causes, especially those involving youth, animals and human services. But to win the attention of these digital natives, messaging must be concise and engaging, offering an immediate experience that cuts through the marketing noise they routinely filter out. Gen Z is also the first mobile-only generation, so website, e-mail and donation forms must all be optimized for mobile. Meanwhile, remember that today's donors expect a personalized, targeted approach that takes into account demographics, giving history, etc. That means segmenting donor and prospect lists for specialized messaging to account for generational differences and other demographics. It means tailoring the "ask" to the prospective donor's income and giving history. It means refining giving/donation pages to highlight projects and wording that will resonate with the target donor group. E-mail is a channel that can be easily personalized, and despite its recent bad rap, a revisit of e-mail strategy is worthwhile. Research shows that donors willing to donate through e-mail rose from just 6% in 2012 to 28% in 2018. Second, low-cost e-mail has an ROI of 122%, much higher than direct mail, social media and paid search. Finally, fundraisers need to make more use of Artificial Intelligence (AI), perhaps by creating a chatbot to interact via messaging services like Facebook Messenger, Slack, Telegram, etc. to handle donations, register members and distribute information about programs and services. AI also can personalize donor journeys based on real-time behavior to encourage contributions and can weaponize data for more cost-effective donor development. For example, a donor's giving and volunteering history, event attendance, affiliations, relationships, and data from wealth screening tools can all be analyzed to predict a potential donor’s likelihood to give a major gift. For more, see our website blog at https://www.acculistusa.com/fundraising-challenges-include-gen-z-e-mail-ai/

Nonprofits Enter Year-end Fundraising Season

With a third of annual giving occurring in December, over half of nonprofits starting year-end plans in October, and direct mail the leading fundraising channel, October often sees final tweaks to direct marketing plans. So nonprofit marketers may want to check their current campaigns against the four-step master plan recently offered by fundraising consultant Gail Perry on her blog. Step 1: Set goals for each donor segment, and don't forget lucrative leading-donor annual gifts, lapsed donors and board members. Step 2: Select channels for a multi-pronged appeal, integrating direct mail, e-mail, telemarketing, social media, website, and video creative--and design a consistent message for all. Step 3: Gather resources and set a budget. Step 4: Set a timeline and calendar. Of course, smaller fundraisers often bemoan budget limitations at this point. A guest post by Damian O'Broin for the Institute of Fundraising offers a bracing response. Greatness is not a function of size, it’s a function of attitude, he argues, citing donor surveys. The things that matter most to donors don’t depend on big budgets and lots of staff but on good, donor-centric fundraising practices: thanking promptly and properly; showing progress and impact; getting to know supporters and responding to their needs; empowering supporters; and asking consistently. Even modest direct marketing campaigns, assuming they are well targeted, can use these practices to boost response. For details and tips of Perry's year-end master plan, see our complete blog post at http://www.acculistusa.com/nonprofits-crucial-year-end-fundraising-drives-have-begun/