i team

TACTIC SHEET:

Advanced Annual Giving
Gathering and Deploying Information

What: Deeper levels of information-gathering on individual donation habits might bring you behavioral insights that cause you to change your approaches to annual giving!

Approach: Instead of looking at all of your annual donors, select your top fifty from your list, using length of time as active donors, and begin there. Simply select those donors who have been on your donor list for the longest, as active donors. There is no magic to selecting your first choice of donors to look at. It’s a test group. Gathering knowledge about donors is always a good idea and freshness of information could be more important than the number of people on your test list. The important part of this approach is to open your eyes and look at how your donors are behaving.

The Objective of This Whole Thing: To get a better handle on how your donors behave, and how you might adjust your annual solicitation approach, balancing the goal of increasing the ask with the objective of building a long term donor relationship.

Next steps: After you have a handle on your first round list of donors, begin by putting that “test group” through its paces:

Return On Investment. Since measuring ROI requires that you wait from 12 to 24 months after the donor is initially acquired, your first test group of donors will qualify, since you chose those top 50 donors based on how long they have been giving to your organization. Start by putting this list through the ROI process. An outline of the process is available at our i team new england consulting website.
Response Time. For many years, I have espoused the use of the RFM Analysis (recency, frequency, monetary value) as a tool to indicate the propensity of a donor (or group of donors) to continue giving to organizations. This is still important. But there is some evidence that adding response time to the mix (how long it takes for a donor to send a check after a solicitation is delivered) is an equally valid and accurate predictor. An outline of the process is available at our i team new england consulting website.
Create Your Own Donor Classification. We tend to label donors by their most recent activity or inactivity, such as LYBUNTs and SYBUNTs, or with some wealth screening rating that we get from the vendor that sold us the service. Why not measure your donors’ long term relationship (loyalty index) by classifying them as loyal (no immediate danger), tipping (on the fence) or risky (must be watched closely)? You might also consider creating your own Passion Index as another classification that measures your donors’ relative passion for your organization. An outline of the process is available at our i team new england consulting website.
Do All Good Things Come to an End? Is there a natural life span of a donor relationship? Are we content with being in our donor’s hearts as one of his/her top five charitable organizations? As long as we do good work, deliver on our mission, and continue to impact our stakeholders, are we guaranteed support from this same core group of donors? Setting aside variables and drilling down to a plain vanilla survival analysis requires hazard probability --the chance that a donor who has given and engaged, and related to you for a length of time is going to lapse or expire sometime soon. The single biggest indicator that something is wrong, (maybe because your ask strategy is too aggressive, your message is flat, or your impact is not resonating, as examples) is that you have a statistically significant dip in the number of donors and revenue during the same campaign period.