This is part four in a six-part series. Read part one, part two, and part three.
In part one of this series, I outlined my top six fundraising strategies for 2021:
- Investing in digital-first fundraising and marketing communications
- Mastering online user experience and messaging
- Mastering relevant content marketing
- Mastering personalized, customer-centered philanthropy facilitation, especially mid-level and major donors, to increase your donor lifetime value
- Mastering an analytic approach to strategy and planning
- Internalizing and externalizing an organization-wide culture of philanthropy
In this post, I’ll explore the fourth strategy.
Master personalized, customer-centered philanthropy facilitation, especially mid-level and major donors, to increase your donor lifetime value.
Make this the year you truly master personalized, customer-centered mid-level and major donor philanthropy facilitation. While donor acquisition is essential, donors are valuable to you based on their lifetime value. Sadly, on average, one-time gifts have no monetary value at all. They actually cost you money! You need to prioritize how you can increase your donor lifetime value by using a variety of strategies that increase donor retention and upgrades.
It’s going to be easier to increase your donor lifetime value if you begin with those who make a higher-than-average gift. That’s not to say you don’t value smaller donations; of course you do! Yet as you consider your allocation of resources to facilitate philanthropy, pay greatest attention to the types of strategies that will turn first-time and habitual donors at above-average giving levels into thoughtful and passionate donors at ever higher giving levels.
To move donors to the next level, you’re going to get the biggest bang for your buck working from a Pareto Rule perspective. Your nonprofit may be different, but I can’t think of any organizations I’ve worked with who didn’t receive the lion’s share of giving from a small group of generous, devoted supporters. The ratio may not be exactly 80/20 (i.e. – 80% of the giving comes from 20% of the donors), but it’s definitely going to be top-heavy.
Here are useful strategies to consider when engaging with folks who’ve already demonstrated a high level of commitment and loyalty with their above average gift amount or by giving more than once.
- Move more mid-level givers to higher levels of giving.
- Encourage donors to give monthly in order to upgrade them.
- Use peer-to-peer fundraising to upgrade the donor’s value.
- Promote bequests.
Move more mid-level givers to higher levels of giving.
Between new donor acquisition and major donor cultivation, solicitation, and stewardship, what happens? Usually not enough. Perhaps you put in place a series of mailed and emailed “touches” for non-major donors, lumping $25 donors together with $500 donors. Perhaps you don’t do anything more personal with these folks until they rise, of their own accord, to your major gift level.
This is a BIG missed opportunity. You’ve likely got great major donor prospects hiding inside your own donor base, and you’re essentially treating them like they don’t matter. As a result, a significant amount of mid-level donors never rise to their greatest potential.
What if you were to begin to look at your mid-level donors as the transformational fundraising opportunity they are?
A good place to begin is to set aside your assumptions about why donors give at the level they’re currently giving, as well as your expectations around what they’ll give in the future. Many of these donors are giving out of habit. You may unconsciously be reinforcing this habit by the way you treat them—or, shall I say, the way you don’t treat them.
Sure, making a habitual $500 gift seems like a good thing. In theory, yes! But consider if the donor is capable, interested in, and willing to be persuaded to give more. If you put in place strategies to guide the donor toward a level of giving that feels truly joyful, you’ll also increase your donor lifetime value for this supporter.
Tip: Be as personal as possible. It’s the one thing that can set you apart and help you build a donor relationship that lasts.
Consider that mid-level donors have given at an above-average level without much cultivation. They’ve shown an interest in what you do, capacity to give at a level above your average gift, and have essentially “qualified” themselves to be treated with some extra attention.
Your job now is to build a bridge between mid-level gifts that come in via direct response (mail, email, or website) and future larger mid-level or major gifts that will be made once you’ve lavished some personal attention on your donor via personal email or text, a phone call, or a face-to-face visit (in person or via Zoom). Put a dedicated customer-centric staff person on the case and start reaching out to these donors ASAP.
Encourage donors to give monthly in order to upgrade them.
There’s no better donor retention or upgrade strategy than a monthly giving program. In fact, on average, monthly donors retain at 80–90% vs. well under 50% for one-time donors. The other good thing about monthly giving is it’s very customer-centric. It’s convenient for donors and makes it easy for them to give more than they otherwise might have felt possible. After all, for most people $25/month sounds much more approachable than making a $300 gift.
Besides being more loyal than the average donor, monthly donors are six times more likely to leave you in their will. That’s because they’re typically engaged over a long period, so your cause stays top of mind for them.
Tip: Growing your revenue from a monthly donor program isn’t hard; it just takes commitment. Entire books are written on this subject (two of the best are Monthly Giving Made Easy by Erica Waasdorp and Hidden Gold by Harvey McKinnon, ), so this article won’t cover the “how to” landscape. Just know you’re missing a huge money boat if you don’t prioritize monthly giving as one of your core fundraising strategies. You can grab some other quick tips here.
Consider securing a matching gift from your board to inspire folks to join your monthly giving program. This might be a dollar-for-dollar match or you could simply set a goal for the number of new and upgraded monthly donors you wish to secure then suggest to your constituents that if you reach that goal the additional board match will be applied.
- Use peer-to-peer fundraising to upgrade the donor’s value.
Use peer-to-peer fundraising to increase donor lifetime value.
Along with a monthly giving program, a peer-to-peer strategy is my second favorite tool to add to your fundraising toolbox. This is the quickest, most direct way to create awareness, generate involvement, acquire new donors, upgrade existing donors, and capture donor research. Why? It leverages the power of current donors in two amazing ways by:
- Having them reach out to their networks—opening doors to potential supporters you’d otherwise never have met
- Transforming their single $100 gift to the equivalent of a $1,000 gift when ten of their friends join them in giving at that level
One of the greatest benefits of the digital revolution is how it’s opened up access to networks you’d never previously have hoped to reach. Today, tapping into current supporters’ personal networks scales relationship building.
People don’t care so much what you have to say. They care more about what their peers have to say—about your organization, about the cause, and about the community they are creating. This holds especially true for younger generations. You must begin thinking about strategies that engage your supporters as active promoters and advocates.
How does this work? You set up a user-friendly system ahead of your campaign, one that is so easy to use they can simply push a button, more or less, whenever they want to fundraise on your behalf. There are numerous companies who will build online, customizable peer-to-peer fundraising pages for you (e.g., see here and here). They’ll even integrate these pages with your social media accounts so folks can instantly spread the word about your campaign.
These are generally the most transformational gifts your cause can receive because, for most people, they’re the largest gifts they’ll ever make. In fact, a well-run legacy program can raise far more money than a typical major gifts program. I once heard fundraising guru Tom Ahern say, “If you’re not doing this, you don’t have a fully-fledged fundraising program.”
Bequests are transformational for the donor too because they’re personal. After all, The gift represents the donor’s wealth earned over a lifetime and the way they want their values to live on after they pass.
If you’ve put developing a legacy giving program on the back burner because you’ve thought it’s too complicated, today is the day to bring your pot front and center.
Legacy giving is not complicated. Most such gifts come from bequests, and these are something everyone understands. If your organization has been around for 10+ years, you should have a bequest program; you’ve earned it by virtue of the fact you’ve been in business this long and folks are relying on you to continue. Bequests and other types of legacy giving are a way to future proof your mission.
Just like any other kind of philanthropy, the biggest reason folks don’t make legacy gifts is because they aren’t persuaded they’re necessary and they aren’t asked. This is why you need to consciously prioritize bequest giving as one of your front burner strategies.
One study reported by fundraiser Stephen Pidgeon asked a sample of typical middle-class donors, “Would you consider putting a gift for charity in your will?” More than 90% said yes! However, when asked if they’d already put a gift for charity in their will, fewer than 10% had done so.
Persuade those who want to keep legacy giving on the back burner by sharing research from several studies revealing:
- Donors who received a letter directly asking them for a bequest were 17 times more likely to give a bequest than donors who were not asked.
- Donors surveyed by The Partnership for Philanthropic Planning found 70% of donors who made planned gifts did so because they were asked.
One way to have a meaningful, personal conversation with a donor is to ask them what legacy they would like to leave the world. People love to talk about themselves, and this gets them talking about their values. Since all fundraising is a value-for-value exchange, this can be a meaningful way to guide folks toward a discussion of their philanthropic priorities.
TIP: Donors don’t have to be super wealthy to make a bequest; reach out to all your mid-level and major donors. You can also go beyond these folks to anyone who’s been especially loyal as a donor, volunteer, or user of services. Just commit to putting the word out there that you value legacy gifts. Tell folks what a bequest can accomplish, and how much you’d be honored to partner with them to make a lasting difference in your community and the world.
Want to learn more about taking donors to the next level? Rather than winging it, it helps to be taught by the best in the business. And that’s where the Veritus Group Certification Course for Major Gift Fundraisers and/or the Certification Course for Mid-Level Donors may be just what the doctor ordered.
Check these out if you’re losing donors, the long-term, lifetime value of your donors is nothing to write home about, your donor file overall is shrinking, or your major donor program is stagnant.
The post Top 2021 Fundraising Strategies: Increase Your Donor Lifetime Value appeared first on Bloomerang.
This article originally appeared in Bloomerang. See the original article here.