Reshaping Donor Strategy in an Increasingly Competitive Giving Environment
According to Giving USA’s annual report, charitable giving by individuals dropped by 1% in 2018, pushing the proportion of total gifts by individuals to its lowest point in the last 50 years. This drop in individual giving has left nonprofit organizations with the challenge of attracting donations in a shrinking pool of givers.
To win in an increasingly competitive landscape, nonprofits must deepen their understanding of who donors are, what is important to them and how to best reach them with marketing efforts. Here, we’ll talk about some of the qualitative and quantitative methods successful nonprofit organizations are using to get these answers and forge winning acquisition strategies.
Surveys: Ask Donors What’s Important to Them
Surveys can be a powerful tool for understanding donor preferences and perceptions of your brand. At ForwardPMX, we frequently develop surveys to discover why people might give or might not give to an organization. A common theme amongst donors is that they find organizations are unclear about how their contributions will be used.
Naturally, donors want to feel that their money is being used on the missions they support, and if they don’t see evidence of that or if they don’t see how your organization plans to accomplish its mission, it drastically reduces their likelihood to give. We have leveraged these types of findings to help clients improve clarity of purpose and create materials designed to engage and sustain donors.
Surveys can also be helpful in identifying a winning brand position or donor message. Testing various value propositions for marketing can help your organization avoid “groupthink” and save money on costly creative development.
On a recent project, we helped a leading nonprofit in impaired driving prevention reshape its messaging strategy for donor acquisition. Before the survey, the prevailing opinion within the organization was that they needed to position themselves in a stronger manner, emphasizing their fight to bring perpetrators to justice. But during the survey, we found that most donors preferred messaging about how the organization helps victims get financial assistance and how they work with leading tech companies to prevent incidents in the future. The client is now testing victim-focused messaging and can avoid costly creative development and media testing on a message that is unlikely to work.
Audience Partners: Segment Donors to Optimize Media Targeting
While surveys are an effective way to better understand donors, they are certainly not the only tool at your disposal. Tracking donor metrics and trends, and combining that information with audience partner data, can be a powerful way to segment donors and prioritize outreach. We have worked with many clients to segment donors by lifetime value (and other KPIs) and then append audience characteristics to better understand who those donors are and what makes them likely to give.
In a recent project, we worked with a leading human rights organization to identify donor segments for media targeting. After appending their donor data to third-party audience data, we found that their core donor segment, an older demo group, had declined by over 50% in the last 10 years. The group was aging out of donating, and the organization had not been able to replace them effectively. However, we also found a younger demo group with a high average gift total who were growing in the file, but were not being reached with media at enough scale to make a significant difference in donations. Together with the organization, we helped create a media plan to reach this younger demo with the right message and right media channels to improve acquisition.
For organizations interested or already undertaking this type of audience segmentation, we would recommend working closely with media and agency experts to determine which partners best meet your audience and acquisition goals. There is an ever-growing list of partners and audience characteristics available for purchase, and media agencies often have broader experience in working with and evaluating those partners across multiple nonprofit and for-profit clients.
Testing: Keep Learnings Cost Effective
Discovering opportunities in your acquisition programs is often half the battle. Nonprofits are understandably constrained in the amount of money they can spend on marketing. Even if a survey or analysis points to a need for shifting strategy, there is always risk in change, and nonprofits (again understandably so) are often averse to risking funds on new creative, media and audiences. That is why we recommend that testing at a smaller scale.
Running A/B messaging tests in cost-effective channels can help you identify efficiencies and support broader expansion. Prioritizing outreach to a small sample of potential high-value donors can mitigate costs and still achieve statistically significant results if structured correctly. Again, working with impartial experts can help you structure testing correctly and set up measurement in a way that will inform your path forward in donor acquisition.
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