Proper donor management is the key to effective fundraising. When you have accessible data about your donors that is stored well and easy to sift through, your nonprofit will have the tools you need in order to build relationships with those supporters.
Relationships, now more than ever, are key to lucrative fundraising strategies. Some donors find themselves, very much like many nonprofits, stretched thin financially. Other donors— those with capacity— may want to help, and are just waiting to be re-engaged by charities whose causes they are passionate about.
When your organization has strong relationships with these supporters, it increases the chances that they’ll choose to maintain their charitable giving.
Before you can expect to establish and cultivate strong relationships with your supporters, your organization will first need to store and leverage relevant data about those donors. This brings us back to the need for effective donor management.
Here at Bloomerang, we’ve helped thousands of nonprofits achieve their goals when it comes to donor data management. From this experience, we’ve put together our list of the top four donor management best practices for organizations to consider. These best practices include:
- Track donor engagement.
- Measure donor generosity.
- Track donor retention rates.
- Use data to improve fundraising campaigns.
Don’t forget that your nonprofit will need access to effective donor management software in order to effectively implement these best practices. Reading through Bloomerang’s donor database guide will help your organization invest in a solution that’s up-to-scratch.
Now, let’s get started with our favorite tips.
1. Track donor engagement.
Our first tip for nonprofits is to make sure you’re tracking all of your donors’ engagement metrics. This means that you should track fundraising data, communication detailsand personal information related to your organization’s supporters.
Many nonprofits have a tendency to put additional weight or emphasis on the fundraising information from their supporters, but it’s important to remember that all data is important for an effective strategy. This is especially true when you have relationships at the forefront of your mind.
Specifically, you should make sure you’re collecting and storing information such as:
- Donations made. Fundraising data is important to help your nonprofit get a handle on donors’ frequency of giving, average donation amounts, and campaigns supported. Recording this data can help your organization predict their future donation behavior and better appeal to them during certain campaigns.
- Email metrics. Keep track of the email campaigns Each of your supporters are a part of and how they respond to different emails. For instance, when a new supporter donates to your organization, you may send them a series of welcome emails. Depending on the content of these emails, you can learn about the donor’s interests based on which ones they open, read, and click-through.
- Events attended. Keep track of the events your supporters choose to attend that are hosted by your organization. This may include both fundraising and stewardship events that your nonprofit hosts. Make sure to also include information about any donations made during the event and activities they participated in.
- Phone conversations. Calling your donors is an incredibly important and valuable opportunity to establish a personal connection with your supporters. It opens up the floor for a one-on-one conversation that is next to impossible to accomplish over email or written communication. Call your supporters to thank them for their support and to invite them to upcoming opportunities for additional engagement with your nonprofit.
- In-person meetings. Even in a pandemic, some donors are still asking for socially distanced meetings. You can still host them using effective video conferencing software like Zoom or Google Hangouts. Be sure to record these notes in your CRM for reference. This way, in future conversations, you can make sure to touch on personal details and ask individualized questions based on the data. This shows supporters that you’ve been paying attention.
Engagement data helps nonprofits to better personalize outreach strategies with individual supporters. Plus, when a donor is highly engaged, they may be a good person to reach out to as a potential fundraiser for your next peer-to-peer campaign, for valuable input on organization activities, or even as a major donor if they have the wealth capacity to contribute one.
Make sure your donor database is designed to automatically store this key information in individual donor profiles as you collect it.
2. Measure donor generosity.
Donor generosity indicates the capacity of a supporter to contribute larger amounts to your organization. When a high level of generosity is combined with a high engagement history with your organization, that individual might be a good candidate for a major gift.
You can learn about potential donor generosity by prospect research. Prospect research shows nonprofits the wealth and philanthropic indicators that can be used to improve fundraising. These indicators measure two different things:
- Wealth indicators. Wealth indicators include things like real estate holdings, stock holdings, business affiliations, and political giving. All of these metrics are publicly available, so your organization could Conduct research on your own about each individual supporter in your database. But the far more convenient option is to invest in a prospect research tool to help you scan your donor database.
- Philanthropic indicators. Philanthropic indicators help you understand the likelihood that a supporter will want to support your particular organization. These indicators include things such as previous gifts given to your nonprofit, contributions made to similar organizations, and volunteer hours with yours or similar nonprofits.
By understanding the wealth data about your supporters, you can craft more specific asks that are within the financial capacity of the supporter. When you craft your fundraising asks, you can keep this information in mind.
Save the data you find in your donor database. You may also choose to choose a CRM solution that integrates with a prospect research solution, such as Bloomerang and DonorSearch. This way, generosity information is automatically saved in the relevant profiles for each of your supporters.
3. Track donor retention rates.
Remember what we said about building relationships with donors? It’s incredibly important to maximize your fundraising strategy. One of the reasons relationships are so important is because they can help increase your donor retention rate.
According to this guide, the average donor retention rate for nonprofits rests around 45% (as shown in the image below). However, just a small increase in this percentage rate can drastically increase the total revenue your organization earns as a result of fundraising.
Work to build your donor retention rate until it’s far above the national average. There are several reasons to do this:
- It is less expensive to retain donors than it is to attract new supporters. It cost about ten times more to attract new donors than it does to retain your existing supporters. This is because those who have given to your organization before have a known connection to your mission. Meanwhile, when you search for new supporters, you have to find supporters with this connection.
- Donors tend to donate more over time. Therefore, the longer you retain supporters with your organization, the more they’re likely to contribute. This is because they perceive their connection to the organization to grow stronger as time goes on.
By tracking your donor retention rate as a part of your donor management strategy, your organization can make sure you’re doing everything you can to increase and improve upon this important metric and use it to raise more.
Plus, you can see the impact that different strategies that you implement have on your retention rate. For example, if you add an additional three stewardship campaigns to your outreach calendar, start calling donors to thank them for their contributions, and increase the overall communication with supporters, you can expect your retention rate to increase.
If you implement new strategies to build relationships with supporters but see no change in your donor retention rate, you might need to re-adjust those strategies.
4. Use data to improve fundraising campaigns.
Donor data is important for your organization’s overall fundraising initiatives. However, it’s crucial for your fundraising campaigns. Donor data can help your nonprofit develop a concrete plan that will ensure you reach your goals, especially when it comes to large-scale fundraising campaigns.
For example, if your nonprofit is hosting a capital campaign, you may develop a gift range chart depending on the capacity of your development team and your historic fundraising success. These charts depict the number of gifts of certain sizes that your nonprofit needs to achieve its overall fundraising goal.
It might look something like this: If your nonprofit is trying to raise $100,000, you may need one gift of $50,000, two gifts of $10,000, and six gifts of $5,000. These charts work especially well when your nonprofit is raising money for the quiet phase of your campaign.
You may also use your donor data to:
- Define donor segments. Segment your supporters based on similar data points in your donor database. For example, you might create a donor segment of the supporters in your database who give at the same donation level or that attended the same fundraising event.
- Find major donors. When you find a donor with both high engagement metrics and high wealth capacity, you may have found an adequate prospect for a major gift. Be sure to conduct additional prospect research and steward these individuals to increase the likelihood of achieving a major gift for your next campaign.
- Personalize fundraising asks. No matter the campaign you’re fundraising for, personalized messages are bound to resonate with your supporters better than impersonal communications. Therefore, use the data in your database to make sure you’re using supporters’ preferred names and contact information as well as discussing their individual interests.
If your nonprofit is struggling to find the best ways to employ the donor data that you’ve stored and organized, then you might consider investing in a nonprofit consultant. Consultants can help organizations like yours define their needs and craft strategies to fulfill those needs. Bloomerang’s list of top consultants is a great place to start if you’re interested in nonprofit consulting.
Once you’ve improved your fundraising campaigns using the data you’ve collected, continue storing the data! If you’re committed to growing and raising more and more revenue, your nonprofit should set processes that ensure all of your data is organized and stored both now and moving forward.
Donor management is at the center of nonprofit organizations’ effective fundraising strategies. With an effective system in place, your nonprofit can make the most of this tool and improve your overall approach to donor relationships. These four tips are just the start. Good luck!
Author: jay love, Co-Founder and current Chief Relationship Officer at Bloomerang
Love has served this sector for 33 years and is considered the most well-known senior statesman whose advice is constantly sought. 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.