6 Ways To Segment Donor Populations

Posted on 01/27/2019

No two donors are the same. Each one has had a different experience with giving that influences the way you should communicate with them. They do, however, all share one thing in common: none of them has either a 0% or a 100% chance of giving in the future.

Organizing past donors into segments allows you to create customized messages that increase the likelihood that they will respond to your appeals. While there is an unlimited number of ways you can subdivide your donor populations (e.g., interests, behaviors or demographics), a good place to start is to consider their giving record.

Here are six ways to segment your donors based on their giving history:

  • Current Donors are those individuals who have given in the present fiscal year. Since they’ve already been “counted” toward your participation goal, your messaging should focus on acknowledging their giving and its impact. While a traditional annual giving approach is to hold off on further solicitations for this group, it’s not uncommon for programs today to pursue additional gifts from current donors. If you do, however, it’s particularly important to let them know that you’re aware and appreciative of their recent support.
  • Prior-Year Donors are those individuals who gave during the last full fiscal year but who have not yet given in the current fiscal year. A term that’s often used to describe this segment is LYBUNT, an acronym which stands for “Last Year But Unfortunately Not This.” Generally speaking, prior-year donors are the most likely segment to renew their giving. Among competitive colleges and universities, approximately 60% of prior-year donors can be expected to give again in the current fiscal year.
  • Multi-Year Donors are a sub-segment of prior-year donors and are those individuals who have donated in more than one past year. This is important because the likelihood that a donor will renew their giving increases with each successive year that they donate. For example, someone who has donated in each of the past four years is more likely to donate than someone who has donated in each of the past two years. Among competitive colleges and universities, approximately 66% of multi-year donors can be expected to renew their giving. Moreover, the likelihood that a multi-year donor will renew their gift is over 80% once a donor gives for five years in a row. Therefore, a useful goal for any donor is to get them to the five-year mark as the “tipping point” in ensuring they become a consistent lifelong donor.
  • New Donors are another sub-segment of prior-year donors and are those individuals who made their first gift last year. New donor retention rates are usually much lower than the overall prior-year donor segment. Among competitive colleges and universities, approximately 26% of new donors can be expected to renew their giving. In the case of first-year-out graduates who made their first gift as part of their senior class gift campaign, it’s not unusual for fewer than 10% to renew their giving. For this reason, new donors represent a huge opportunity when it comes to increasing the rate of renewal as well as overall participation.
  • Lapsed Donors are those individuals who have given at some point in the past but who did not give in the prior fiscal year. A term that’s often used to describe this segment is SYBUNT, an acronym that stands for “Some Year But Unfortunately Not This.” Lapsing is the term often used to describe when a past donor misses or skips a year of giving. Among competitive colleges and universities, approximately 15% of donors who are fewer than five years lapsed can be expected to renew their giving. Within the lapsed donor populations are several sub-segments that deserve your extra attention: those who made a leadership gift before lapsing, those who made multiple gifts in a single year before lapsing, and those who had a streak of consecutive giving before lapsing. Each of these sub-segments is more likely to donate and more likely to upgrade than the lapsed donor population in general.
  • Long-Lapsed Donors are individuals who have given at some point in the past but have not done so in a significant number of years. In the same way that multi-year donors become more likely to give again with each subsequent gift, the likelihood that someone will donate declines with each additional year that they lapse. Once a donor lapses more than five years, the chance of them giving again the following year is often less than the chance of getting someone to give for the first time. This tipping point is commonly referred to as “the cliff,” and you should do your best to avoid letting your lapsed donors fall over it.

Segmenting your donor populations based on giving history will allow you to give each group the attention it needs, create more personalized messages, and allocate your resources based on your goals and priorities. While giving history certainly isn’t the only way to segment your target audience, it’s often the best place to start.

Want to learn more? CLICK HERE for AGN’s Webinar on Segmenting Direct Mail Appeals.

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Building Connections Between Students and Donors

Posted on 01/20/2019

One of the most common challenges for educational institutions is helping donors understand the impact of their support. Unlike some other nonprofit organizations where “need” may appear more urgent or severe, many schools struggle to convey to donors how modest gifts will make a difference as high tuition rates and big endowments overshadow their fundraising appeals. Even proud alumni and parents—full of positive feelings and a strong affinity toward their school—can often end up feeling like the institution is worthy of their support, but just not needy enough.

One of the best ways to overcome this sentiment is to build meaningful connections between donors and those who benefit from their support. In the case of educational institutions, it’s often students who are most directly impacted by giving. Yet with geographic and generational barriers making it difficult to bring these two groups together, it’s crucial for advancement shops to find new and innovative ways to create connections.

The Charles River School in Massachusetts recently engaged students in a fun activity designed to show a special group of alumni and donors some love and appreciation around Valentine’s Day. The advancement team partnered with faculty members to have students make handmade alumni valentine cards as class projects. Every student at the K-8 school created a valentine with an element tied to their classroom curriculum. Younger students decorated their valentines with cut-out hearts, glitter, and poems, while the middle school students wrote letters to the alumni in their cards. The valentines were then sent to a targeted group of older alumni who enjoy receiving mail, as well as to recent campaign donors.

According to Rachael Singmaster, Assistant Director of Development at Charles River, the handmade cards were a big success. A number of the donors who received the cards responded by writing letters back to the students and—even though the initiative was designed to steward—one even made a gift. With a small alumni community, the team believes that personal touches like these are vital for the school’s continued success.

Nearly all institutions struggle to find unique ways to connect with donors, to ensure they understand that their gifts are very much needed. By involving students in these stewardship efforts, you can demonstrate this impact in a meaningful, interactive wayand, in turn, cultivate loyal donors who see firsthand that they are appreciated.

Want to learn more? CLICK HERE for AGN’s Webinar on Maximizing Annual Fund Stewardship.

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Increasing Giving by Faculty and Staff

Posted on 01/13/2019

Faculty and staff participation in the annual fund can be an important element of the success of an institution’s short and long-term fundraising efforts. Employees can not only be a significant source of gift revenue each year, they can also help enhance a culture of philanthropy on campus and set a good example for students (future alumni!) through their support. Additionally, it’s not unusual for employees who are properly cultivated to become major donors through planned gifts later in life.

Unfortunately, many educational institutions don’t do enough to encourage giving by faculty and staff. Some don’t solicit them at all, and those that do can end up with participation rates that average 10 percent or less. According to AGN research:

  • 32% of institutions don’t run a faculty/staff giving campaign at all
  • 47% don’t have any faculty or staff volunteers
  • 76% don’t have a formal committee/board to engage faculty and staff leaders

Understanding the importance of engaging employees in fundraising, The University of Delaware recently crafted an appeal that truly caught the attention of their faculty and staff, and made giving easy and memorable. The “Opening Doors” campaign was designed to increase participation by highlighting how employee financial support has a direct impact on UD students. The comprehensive, multi-channel effort included a letter signed by the student body president, who also happens to be a UD scholarship recipient. Campaign postcards were created so that students could write thank you notes to faculty and staff donors.

In keeping with the campaign theme, the team also designed special “door hangers” to help spread the word. The door hangers directed employees to “Display their Blue Hen pride” by posting them on their doors or in their cubicles. Sharing fundraising collateral in their spaces enabled faculty and staff members to show their support for giving back to the community while promoting the effort among their peers.

Launched as part of their spring fundraising push, the campaign was a big success. It raised nearly $1 million from more than 900 donors. Just as significantly, it helped to raise awareness among employees and students about the importance and impact of annual giving.

By distributing a creative visual as part of their recent faculty and staff campaign, UD motivated their employees not only to give, but also to help publicize the effort, in turn strengthening the culture of philanthropy on campus. Develop a memorable and prideful campaign specifically for the employee constituency at your institution, and you may find you open doors for greater support as well.

Want to learn more? CLICK HERE for AGN’s Webinar on Faculty & Staff Giving.

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3 Steps to Improving Your Appeal Letter

Posted on 01/06/2019

The 20th-century British novelist and poet Robert Graves once said, “There is no such thing as good writing, only good rewriting.” The world of annual giving is no exception, and this serves as a reminder that no appeal letter is ever perfectly written on the first attempt. Too often, however, time-strapped annual giving staff end up rushing and not putting enough effort into reviewing and revising their work. The truth is, a rewrite is often what distinguishes a good appeal letter from a great appeal letter.

Thanks to spellcheck and autocorrect, it’s easy to become a passive editor. Yet it remains critical to be a proactive editor, and it often takes several drafts to get things right. In the case of written fundraising appeals, editing must accomplish a number of objectives beyond just eliminating errors in grammar and spelling. It should also reflect on broader strategic questions before the piece is considered ready to send.

To help guide you through the important review and editing process, consider employing these three steps after completing the initial draft of your next appeal letter:

  1. Review it from the viewpoint of the donor. Is it an interesting story? Does the beginning capture the reader’s attention? Is the case for support clearly articulated? Does it create a sense of urgency to make a gift? You should feel confident that your readers will be drawn in and come away with an understanding of why and when they should make a gift.
  2. Make sure it’s properly “aligned.” Is the tone fitting for the person reading it? Does the messaging feel consistent with the institution’s brand? If there is a comprehensive campaign underway, is it tied in? Look for the letter to check these boxes and, if needed, make adjustments to word choice or phrasing to give the appeal an appropriate and cohesive feel. 
  3. Proof for flow and technical errors. Are sentences and paragraphs easy to read aloud? Is the piece free of spelling and grammar errors? Are names, titles, buildings, and other details correct? Have you made the most of emphasis techniques (such as bolding, underlines, and post-scripts) to highlight the key points without causing distractions or making the page seem too busy? As you wrap up content revisions, don’t forget to take the time to ensure the whole piece flows well and reads accurately.

Like most any skill, your appeal writing will improve if you revisit it again (and again) after your first try. Ensuring that you are clearly and compellingly communicating your message in a way that fits with your overall brand is just as important as checking for typos. Write well, but using these three tactics, rewrite even better.

Want to learn more? CLICK HERE for AGN’s Webinar on Writing Effective Annual Fund Appeals.

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Announcing AGN’s New Sample Library

Posted on 12/30/2018

AGN is pleased to announce the launch of our new Sample Library. Comprised of submissions from the recent Best in Annual Giving Challenge, the library showcases great work from hundreds of participating institutions, featuring direct mail appeals, emails, scripts, stewardship pieces, volunteer materials, webpages, advertisements, giving day and crowdfunding collateral, and other special campaigns. A few of our favorites include:

  • Delaware’s Faculty & Staff Door Hanger Effort
  • UCLA’s Laurel & Hardy Crowdfunding Campaign
  • Charles River School’s Stewardship Valentine
  • Columbia’s Giving Day Origami Mailing

In celebration of all of this inspiring work, access to the Sample Library is currently open to all. Each one contains images and important details such as the effort’s audience, goals and results. Those that are particularly creative, innovative, or high-quality have been noted with a “star” and will be featured in upcoming AGN articles, case studies and webinars.

After February 8th, the Sample Library will be accessible only to AGN Plus Members.
AGN’s research team will continue to add new samples and ensure that the library grows and serves as a valuable resource. Click here to learn about the benefits of AGN Membership and guarantee your uninterrupted access to the new Sample Library.

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4 Ways To Be A Better Listener With Donors

Posted on 12/23/2018

Are you a good listener? Effective fundraisers need to be. Listening helps you learn more about a prospect’s history with an institution, their personal passions, and their philanthropic motivations. Strong listening skills can also help build rapport with donors and increase your credibility during meetings.

But listening is not a passive activity. There is a difference between just hearing what your donors are saying and actually listening to them. Active listening involves asking probing questions and making connections with your prospect. When you listen well, you are better able to align donor interests with the right philanthropic opportunities.

So how do you improve your listening skills? Consider these four tips to help master the art of listening during your next donor meeting:

  1. Ask open-ended questions. These will force your prospects to think, help them engage more in the conversation, and uncover a deeper understanding of your prospect’s connection to your institution and interests. Use follow-up questions that start with phrases like “tell me about that…” or “how so?” to peel back the layers.
  2. Use body language that demonstrates listening. Making eye contact, nodding your head, and maintaining a similar posture are all expressions of interest. Mirroring the prospect’s pace of speech, style, and even tone of voice can also help them feel more comfortable during the conversation.
  3. Restate what you have heard to clarify. Repeating back what you hear shows that you are actually listening and gives the prospect an opportunity to clarify and correct, if necessary. Employing phrases such as “what I’m hearing you say…” or “it sounds like…” can help you better translate their feelings into opportunities or delve deeper into a topic.
  4. Limit your own speaking to 25 percent of the conversation. Talking too much prevents you from gaining insight into your prospect. Whether you are naturally extroverted or just feeling nervous, resist the urge to fill lulls in conversation with words. Remember that the meeting is not about you, it’s about the prospect.

Listening is hard work. Whether you are a seasoned fundraiser or someone new to the profession, it takes effort to keep donors talking. By focusing more on what your prospect is saying, you’ll be better able to align their interests with opportunities. So set your agenda aside and open your ears—you’ll be well on your way to a stronger and more productive donor relationship.

Want to learn more? CLICK HERE for AGN’s Webinar on Listening to Donors Strategically. 

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A Low-Cost Approach to Renewing Donors

Posted on 12/16/2018

Acquiring new donors is an expensive proposition. And with increasingly tight budgets, annual giving teams have to carefully consider where they are allocating their resources. To maintain high return on investment, it is important to ask the question: where do you invest, and where should you cut back?

One area to consider scaling down is your renewal appeals. Your loyal donors don’t need to be convinced to make a gift since they already have—they already love you. Data shows that donors who give year after year are more likely to continue to contribute, so sending pricey multi-page, glossy appeals may not be necessary.

An invoice-style appeal, sometimes called an “Ugly Betty,” remains popular among annual giving programs due to its simple, no-frills design and low production costs. It doesn’t contain a wordy case for support or compelling pictures. In fact, it looks more like a billing statement than a traditional fundraising piece.

Auburn University sends this type of appeal to their loyalty society members each year. The mailing is printed in-house and is personalized with last gift amounts and gift allocations, so donors can see their previous areas of support. The response card also includes complete contact information, which the team has found to be very effective in eliciting updates. Donors seem to prefer correcting their contact information if it’s printed, versus filling in the blanks when asked.

According to Susan Cowart, Auburn’s Director of Parent and Annual Giving, this type of appeal makes sense for their loyal donors. While graphics and bold images may seem better, a simple letter still does the job. Auburn’s Foy Loyalty Society appeals raise over $400,000 a year, and pre-populating contact information yields 75 percent more updates than their other mailings.

Creativity counts, but consider the best place to use it. Acquiring new donors and stewarding your existing donors are great places to invest your time and resources. But today’s donors are busy, and a simple approach may be the best way to convey an important message to your most loyal supporters: it’s time to renew your gift!

Want to learn more? CLICK HERE for AGN’s Webinar on Rethinking Direct Mail Appeals.

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5 Tips to Make Your Email Appeals Stand Out

Posted on 12/09/2018

Email inboxes are perpetually full these days. And even though email offers a relatively easy and low-cost way for institutions to solicit constituents, it doesn’t always capture a prospective donor’s attention amid all of the other marketing noise and clutter. If your email gets overlooked in a busy inbox, there’s simply no way it can be effective. But as soon as your email is opened, your chances of securing a donation improve.

So how do you influence prospective donors to read your emails? The battle for their limited attention span starts with the subject line. As it’s the first (and quite possibly the only) thing they’ll see, it’s important to be strategic and choose your words carefully. Keep in mind that your constituents are likely getting dozens—if not hundreds—of other emails each day, so making sure your subject line stands out is critical.

Here are five tips for creating more compelling subject lines that will lead your prospects to open your email appeals:

  1. Grab their attention – Be concise and direct, like a newspaper headline. Pull them in and make them want to read more. Ask questions that generate curiosity, like “Is your name on this list?” Or use numbered phrases: “6 reasons you should donate today.”
  2. Make it relevant – The point is not to trick someone into opening your email. The point is to get those who will be interested in what’s inside to open it. It’s better to have a lower open rate and a higher click-through or conversion rate than the other way around. If you have a video to share, preview that with a subject line like “Watch this video!”
  3. Create urgency – Use deadlines. Let them know if “time is running out” or if it’s their “last chance” to get their gift matched. Year-ends and challenges provide natural opportunities to create a sense of urgency.
  4. Beware of spam filters – Certain phrases or characters can cause your emails to get flagged as mass emails and automatically dumped into junk/spam folders where it’s likely your constituents will never even see them. To avoid this, try not to use words like “free” or “exclusive” in your subject line, and limit excessive special characters or text in all capital letters.
  5. Keep your eye on the prize – If you are sending an email with an ask, don’t get too bogged down in other metrics. When you A/B test, you’re searching for the subject line that yields the most gifts and revenue, not necessarily the one with the highest open rate.

Don’t underestimate the importance of thoughtful subject lines for your email appeals. And don’t try to figure out the right one without doing some research. Watch the private sector, ask colleagues for input, and do some A/B testing of your own. This might take a little extra time, but it’ll be worth the effort. An email appeal can only be effective if it’s opened, and a strong subject line is the first opportunity to catch your donor’s attention.

Want to learn more? CLICK HERE for AGN’s Webinar on Email Strategy for Annual Giving. 

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Having Fun with Donor Incentives

Posted on 12/02/2018

Offering small token gifts to donors is a familiar strategy for annual giving programs. Aside from serving as a way to say thank you, little “tchotchkes” can help keep an institution top-of-mind in their daily lives. Equally important, they can also function as an incentive for donors by providing them with something tangible in return for their support. But some of the more common tactics—like calendars, address labels, and car decals—can get old year after year.

American University (AU) recently found a way to introduce a little fun and humor into their fiscal year-end solicitations by launching a more creative incentive campaign. During the month of June, alumni, faculty/staff members, and parents received appeals offering a pair of AU-branded socks for donors who made gifts of $35 or more.

The team used lighthearted messaging that played up clever sock humor, proclaiming to recipients that “You + AU = The Perfect Pair.” Puns were injected throughout the appeals, inviting donors to “put [their] best foot forward” and “show [they] were head over heels for AU” by making a gift. Though the appeal was sent by the central annual giving program, donors were encouraged to support any area that “knocks their socks off.” The campaign was promoted primarily through less expensive digital channels, including targeted emails, paid social media posts, and pop-up advertisements on high-traffic websites. Donors were directed to a campaign landing page where they could learn more about the offer and make their donation.

The sock campaign was a big success, generating 141 gifts and nearly $40,000 in revenue. According to Katelynd Anderson, associate director of annual giving at AU, nearly half of these gifts came from young alumni, which is typically an underperforming group. The campaign was also a great tool for acquiring new donors and reactivating lapsed donors, with nearly half of the respondents falling into one of these two categories. And while many of the gifts (especially those from new and younger donors) were at or around the $35 threshold, it helped generate higher gift amounts as well as leadership donors. In fact, the average gift was a higher-than-average $278.

From address labels to tech tags, donor incentives should be used strategically to drive results and thank loyal donors. These incentives—and the campaigns that promote them—can leverage fun and humor to catch the attention of your audience and engage your constituents in a new way. So get creative and put your best foot forward; you might just find yourself floored by the results.

Want to learn more? CLICK HERE for AGN’s Webinar on Communicating with Young Alumni About Giving.

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Finding the Right Appeal Frequency

Posted on 11/25/2018

One of Aesop’s great fables is about a shepherd boy who repeatedly tricks nearby villagers into thinking a wolf is attacking his flock. Time and time again the villagers come to his aid only to discover that he doesn’t really need their aid. In the story’s tragic ending, a real wolf finally does appear. When the boy again cries out for help, the villagers ignore him and the sheep are eaten by the wolf.

Besides offering the important lesson to always tell the truth, this story also has an application for annual giving professionals: be wary of asking too often. But understanding that donors usually don’t give unless they’re asked, many annual giving programs struggle to determine the right frequencies for solicitations.

There’s a lot of noise and competition out there for limited philanthropic dollars. An aggressive strategy can keep your institution (and its need for support) top of mind for your constituents. The more often you ask, the more likely it is that your appeal will be heard. Being assertive can also produce better results. There is, in fact, a correlation between higher appeal frequency and higher participation rates.

While frequent appeals draw more attention to your institution, they can also create donor fatigue. The more you ask, the more you risk alienating your prospects over time. It doesn’t take much for someone to click the unsubscribe link in your email or request to be taken off your call list. Asking too often also risks causing your constituents to lose interest in all of your communications—appeals and otherwise.

The optimal frequency depends on a number of factors including your budget, school culture, and goals. Ultimately, good solicitation and segmentation strategies consider more than just appeal frequency; they also balance method, message, and timing. What, how, and when you ask are just as—if not more—important as how often you ask. You’ll know when you’ve found the right balance for your audience when you start noticing a trend toward positive results.

Want to learn more? CLICK HERE for AGN’s Webinar on Segmenting Direct Mail Appeals.

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