In the final part of our 2021 fundraising trends series, the focus is on who are the right donors for your organization, meeting them where they are, and remaining flexible as situations change throughout the year.
- Gaining the Right Donors
Acquisition efforts focus on growing and replenishing your donor base. Smart acquisition efforts run deeper than gaining a high number of new donors and focus on long-term value. With a misguided fundraising strategy, you run the risk of draining your organization’s time and resources, starving your nonprofit and forcing reductions in your programs and services.
Why it matters:
Even a nonprofit organization must pay attention to the profitability of its acquisition efforts. The success of your mission requires making the most of your time, money and opportunities. The wrong message, channel, or list will result in the wrong donor mix. It is entirely possible to drive vast numbers of new donors but still produce financially strained outcomes. It happens all too often.
Donor lifetime value is calculated as the initial gift, minus acquisition costs, subsequent gifts and minus cultivation costs. If each donor, regardless of contribution, represents $50 in acquisition costs, then gifts below $50 can’t generate a positive return until later in the donor lifecycle — provided those donors are retained. Even if retained for multiple years, the smallest gifts can result in a net loss that may never be recovered.
Acquiring a few sizable donations may prove unproductive and prohibitively expensive. But focusing on a large number of very small gifts will also drain dollars and starve your mission. The figures may look promising — but the math doesn’t work. Ultimately, it is a balanced mix of small, medium and large gifts — weighted to mid-value donor prospects — that creates a path to a predictable, positive return and the net dollars to fund your mission.
What we’re watching:
One of the largest factors that impact donor retention and donor lifetime value is securing a second gift. When a first-time donor makes a second gift, they are no longer giving impulsively but actively deciding to support your mission. Targeting first-time donors with multi-channel special messaging can increase the chances of obtaining a second gift and retaining them as a donor.
Nonprofit organizations like yours understand stewardship at their core. Commitment to the goals of your nonprofit is also a commitment to prudent financial decisions and responsible investments. All donations and advocacy matter — including financial gifts large and small, gifts in kind and giving of time through volunteer hours. That being said, it’s important to remember that roughly 20% of your prospects and donors have 90% of the ability to fund your mission. - Be Where Your Donors Are
Whether donors connect via Zoom, Instagram or TikTok, digital marketing has become more critical than ever to nonprofits. As many of us learned during the pandemic, engagement does not have to be face-to-face for donors to feel linked to the organization’s impact.
Why it matters:
The move to a more virtual world in 2020 underscores the need to double down on your efforts and meet supporters in the places where they spend the most time online, and 50% of all web traffic comes from mobile devices. Twenty-seven percent of donors say their approach to giving has changed due to technological advances that provide convenient tools for researching and funding charitable projects and organizations.
We must also consider the significant shifts and updates coming to the major channels like Facebook and Google and the new privacy restrictions introduced on the Apple iPhone.
What we’re watching:
Nonprofits like yours can leverage these statistics by ensuring their content and donation pages are mobile-friendly.
What’s more, in 2021, 5G will dominate as the service rolls out nationwide. Faster networks make it easier for mobile users to connect to web-based apps, load webpages and stream live video. Consider adding one of these channels into your mix:
- With over 1 billion active users, Instagram should be a go-to in your fundraising and marketing mix.
- Last April, TikTok launched a new set of donation stickers, which enable users to raise awareness and funds for their favorite causes via their TikTok clips. And with over 100 million active users in the U.S., its increased popularity deserves consideration.
- SMS is making a comeback, with 75% of consumers now saying they are comfortable receiving organizations’ texts.
Your staff, boards, advocates, volunteers and donors expect to engage with your content, share it with their family and friends, evaluate and understand the impact of their giving and give again through their preferred channel. Take a close look at your mix, and make tweaks that continue to optimize your budgets and efforts by channel.
- Be Flexible
The biggest lesson learned in 2020 was that having a strategy is excellent, but the ability to adapt and change your plans at a moment’s notice is essential.
Why it matters:
While 2020 was an unpredictable year for quick and unexpected changes, becoming more flexible is a good strategy anytime. After all, things keep changing, and none of us know precisely what the years ahead will bring.
Flexibility is not about making it up on the fly — it’s about continually evaluating what you’re doing and how it’s working and making changes as you go. As you draft your fundraising and communications plans, consider not only what might need to change, but how you might know when it’s time to make a change.
What we’re watching:
We’re looking back on 2020. What worked? What didn’t? What were the biggest challenges your organization faced? Don’t be afraid to change the “we’ve always done it that way.” As Barbara Kingsolver said, “The changes we dread most may contain our salvation.”
The COVID-19 pandemic era has been one of the most challenging times we’ve faced as fundraisers, but that doesn’t mean we can’t learn from it. In many ways, we saw people join together in the face of hardship like we’ve never seen before.Now is the time for your organization to learn, adapt and capitalize on these key themes. Follow these trends for 2021 and seize the opportunity to create more meaningful relationships with existing donors, acquire new ones and achieve fundraising success!
Over 30 years of success in sales, multi-channel development and innovative fundraising have earned Summit Marketing a reputation as one of the nation’s most effective integrated direct-response marketing agencies. We produce strategies and tactics that inform, engage, inspire and move people to action.
