Summer reset #2: Organizing your list
All fundraising starts with a list. Your database is one big long list of people who have supported you in the past and could consider supporting you in the future.
How well do you know this list?
When was the last time you studied its potential?
How confident are you that you are interacting with the right donors in the right way at the right time?
This summer is a great time to embrace your most powerful fundraising tool: organization.
That’s right. Organization.
Organizing your lists is the first step to gaining confidence that no donor is falling through the cracks, that you’re treating all donors well (but not necessarily equally), and that everyone on your team knows their part and is playing it.
Combined with an engagement plan that we’ll explore in our next webinar, list organization will ensure that every donor feels that their gifts are being used well (and as intended), that their partnership makes a difference, and that they personally have a role in the future of your mission.
The result will be increased donor loyalty, increased engagement, and increased revenue from your mission. Plus, a simpler, more satisfying job for you!
Follow along with this recording of our webinar last week or the recap below.
For additional support…
Download our free step-by-step guide to organizing your list
Get hands-on support through a discounted support package for your ‘summer reset’
Your database has more potential
Simply put, your database has more potential than you’re currently realizing.
In working with nonprofits from start-up to national organizations, we’ve yet to encounter a database where this fact wasn’t true. Every database contains donors who have expressed interest through a gift…but have never been given the opportunity to learn more about the impact of their giving. Every database contains donors who have been giving for years…but have never been given the opportunity to speak to someone about their motivations. Every database contains donors who are loyal but don’t receive weekly updates on the mission because they have been suppressed from direct response.
Your database has more potential.
And to give and engage to their full potential, donors don’t need fancy events. They don’t need cutting-edge technology.
They need you.
They need you to do all the things that you know are important to a great donor experience…
Provide timely acknowledgements (within a week at most)
Updates throughout the year (at least monthly) about how their gift is at work
Ways to get more involved and excited and inspired by your mission
Opportunities to meet other donors (such as small gatherings and interactive events)
Opportunities to meet with you (both in groups and 1:1)
…and so on
They need you.
Segmentation is the key to a better donor experience
The challenge, of course, is that there are way more donors in your database than staff and volunteers on your team.
If you try to reach them one-by-one—even just focusing on your top donors—you’ll miss opportunities for connection because there simply aren’t enough hours in the day. On the other extreme, if you only communicate with donors through mass channels, you’ll miss opportunities to create a truly personalized experience for donors.
Enter segmentation.
Segmentation is a fancy word for “organizing your lists.” It means grouping your current and prospective donors into a handful of lists so that you can create plans and experiences for groups of donors, rather than one donor at a time.
As we’ll explore during our next webinar on donor engagement planning, the benefit of this approach is that it becomes simple to provide a robust, inspiring baseline experience for your donors—in a way that feels personal and meaningful for the donor.
For the high-potential donors on your list, you’ll layer on moves management experiences that further elevate the experience. But with a plan in place for your high-potential donor segment, the donor will hear from you even when you get busy or have a big proposal to write or get pulled into preparing for a board meeting or…(gasp!) take a vacation!
Segmentation can be simple
In our technology-enabled world, segmentation has become an art.
If your organization has gotten the hang of it, it may be time to explore advanced options such as dynamic segmentation and predictive modeling.
For most organizations we’ve worked with, the immediate need is to start somewhere. The goal is to:
Create a shared vocabulary across fundraising, marketing, and communications
Develop integrated plans from a donor-centric perspective: Using all our assets across fundraising, marketing, and communications, what will the donor’s experience be this month?
Get relationship managers (major gifts, foundations, and corporate fundraisers) out of the business of creating a baseline experience and into the business of creating additional value for top donors that complements the baseline experience
To that end, we recommend a simple starter approach to segmentation. All you’ll need is:
Your donor database
Access to a wealth screening tool for individuals (contact us for support)
A little time to research if you have many institutions on your list
To start, pull a big list from your donor database to review.
To segment them, we are going to think about two categories:
A handful of mutually exclusive core segments to which every donor in our database belongs
Additional special groups that some donors also belong to
How to approach your segmentation
The first step is to divide the donors in your database into your core segments.
The key here is to think in terms of future potential, not current or past giving.
For example, someone who is currently giving $1,000 a year but has a high wealth screen and has expressed interest should be classified as a ‘high-potential donor’—not a middle giving donor—even though they haven’t reached a major gifts threshold yet.
Someone who is currently giving $100 a year but has a mid-range wealth screen should be classified as a ‘middle giving donor’—not a ‘general donor’—even though they haven’t reached a middle giving threshold yet.
Why?
For most donors in our database, there is a big gap between their current giving level and their full potential. That gap is your growth opportunity—and your best growth opportunity.
So, when we create the segments where we’ll invest the most staff and volunteer time—high-potential, middle giving, and sustainers—it won’t be effective to choose only donors who have arrived at those levels. We have to choose donors who could arrive there. That way, we’ll invest our time in growth.
Below is a summary of how to approach the process. For detailed instructions, see our step-by-step guide to organizing your list.
Segment 1: High-potential donors
Segmentation starts at the top of the gift table. We’ll try to identify the 20% of donors that will drive 80% of our revenue growth.
Here, again, we are focused on potential, not giving history.
A high-potential donor is an individual, foundation, or company who meets two criteria:
Financial capacity to give a large gift (as defined by your organization, typically at least $5,000)
PLUS some other indicator of interest, philanthropic inclination, or propensity to give to your mission
In this ‘capacity plus’ approach, the capacity part is non-negotiable. Whether we see it in a wealth screening, giving to other organizations, net worth, or other indicators, we have to have some reason to believe that the person or organization has the ability to make a large gift.
The plus piece means that capacity is not enough. Just because you have money doesn’t mean you want to give it away. And just because you want to give it away doesn’t mean you want to give it to this particular mission.
To identify your high-potential segment, create a shortlist based on capacity alone. Then, review that list and choose the people with the most ‘plus’ indicators—such as known philanthropy, expressed interest in your mission, a high number of lifetime gifts, a high first gift, a high largest gift, very recent giving, giving directly to your mission (vs. to an event), connection to a volunteer, responsive to your outreach, etc.
Note that your high-potential segment should be small enough to manage through a combination of group touches and highly personalized moves management. Choose from your shortlist only your top opportunities. Move everyone that’s left over into your middle donor segment for now.
Segment 2: Middle donors
Middle donors are those with more giving capacity than your general donor pool. They require a hybrid relationship management strategy—direct response combined with personalized touches (though less intensive moves management than your high-potential donors).
Your middle donor segment is made up of two pieces:
Donors who could be considered for the high-potential segment (based on capacity, etc.) but that you don’t have bandwidth to manage through moves management
Donors with the capacity to give a mid-level gift (as defined by your organization, usually at least $1,000)
This list can be relatively long—typically 1,000-2,000 donors per staff person managing your middle giving program.
Segment 3: Sustainers
Sustainers are general donors who are particularly loyal to you. These are donors who give every month or every year, like clockwork.
The experiences you provide to this group will be geared toward retention primarily, while providing opportunities to grow giving and engagement over time.
If you have a monthly giving program, include all members here (excluding those included in the segments above).
Segment 4: General Donors
Everyone else in your database is a general donor. This is the only segment that you will not tag in your database. In other words, anyone who is not tagged to another segment is, by definition, a general donor.
General donors will be managed through your direct response program.
Typically, these programs rely on dynamic segmentation—meaning the segment is defined by matching the timing, content, and call to action of a communication with known motivations, interests, and giving patterns of a donor.
Get started
Our unusual summer is flying by—sadly, for those of us who are summer lovers! But there is still time to get organized for the year ahead.
Get started today on organizing your list, and you’ll discover that it becomes easier every day to create a great donor experience and grow your revenue.
Need help? Contact us. We’ll roll up our sleeves and help you get going.