Post on 07-May-2015
description
Turning One-Time Donors Into Major Gift Prospects
May 5, 2010
Lawrence Henze, Managing Director & Senior Consultant Target Analytics
Your Presenter Managing Director and Senior Consultant, Target Analytics™,
a Blackbaud Company Author and Frequent Presenter on Fundraising and Nonprofit
Topics Law degree, University of Wisconsin – Madison 15 years as fundraising professional, plus 15 years as consultant to colleges, universities, nonprofits and
Fortune 500 companies on the use of predictive modeling in fundraising and targeted marketing.
Lawrence Henze| Page #3 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Agenda
The Challenge Ahead Stewardship Reprise A Commitment to Change A Commitment to Research
The Challenge Ahead:
Turning One-Time Donors Into Major Gift Prospects
Lawrence Henze| Page #5 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
The Challenge Ahead – The Myth of Sisyphus
Lawrence Henze| Page #6 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
The Challenge Ahead
As you recall, Sisyphus played some tricks on Hades and Persephone, and, as a result, was condemned for eternity to hard labor
Turning one-time donors into major gift prospects IS more likely However, like Sisyphus’ task, it will be painstaking and arduous at times Unlike Sisyphus, you can break the repetition and achieve results To do that, however, you will need to commit to change in your
development operation· And you will need to be patient
Stewardship Reprise
Turning One-Time Donors Into Major Gift Prospects
Lawrence Henze| Page #8 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Stewardship Reprise
April 21st webinar presented by David Lamb on stewardship Key points:
· Disaster giving is often impulse philanthropy· Philanthropy begins with repeat giving· Disaster giving can be done without knowledge of organization’s
greater mission· Stewardship and thanking need to educate new donors to
organization’s greater mission
Lawrence Henze| Page #9 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Stewardship Reprise: Sell Your Mission, Not The Crisis
Thank your disaster donors for their first gift Report the total giving from all disaster donors and also a separate total
for first-time donors Report the accomplishments enabled through this gift support Next, suggest what this gift support would do for organization and its
mission if these donors continue but redirect their support· Provide specific examples· For example, you could share what your organization learned from
Haiti that needs improvement and seek funds for that purpose Survey
A Commitment to Change:
Turning One-Time Donors Into Major Gift Prospects
Lawrence Henze| Page #11 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
A Commitment to Change
In addition to the stewardship issues addressed in David’s presentation, there are other significant factors that stand in the way of the development of loyal donors
Remember, loyal donors far more likely to evolve into major donors
Lawrence Henze| Page #12 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
A Commitment to Change
Look at your fundraising program outside of disaster solicitations Questions to ask yourself or your organization:
· How frequently do we solicit our donors?· Is retention rate important to our organization?· Do we spend significant time replacing lost donors with newly
acquired donors?· Do we respond to new donors with a thank you and a second gift
request combined?· Even if the second gift is made at that point, do these donors persist
for three or more years?
Lawrence Henze| Page #13 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
A Commitment to Change
The correlation between direct response fundraising and major giving strength is not strong
Wait! My organization utilizes direct response fundraising and we have major gift donors
Where do those major gift donors come from? The need to practice bottom-up fundraising
Lawrence Henze| Page #14 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
A Commitment to Change
The pursuit of more donors is not necessarily compatible with the goal to maximize gift support In fact, these goals may be conflicting
Are you willing to change a philosophy that focuses on donor acquisition?
Taking control of your annual fund may increase the likelihood of disaster donor retention AND major donor development
If you solicit more than you thank and steward you are not creating a favorable major giving environment
A Commitment to Research:
Turning One-Time Donors Into Major Gift Prospects
Lawrence Henze| Page #16 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
A Commitment to Research
Assumption: you have retained and/or converted past disaster donors in the past
What do you know about these individuals – have you attempted to distinguish the characteristics of retained disaster donors to those who quickly lapse?· This is the starting point for understanding loyal, transitional and
major donors Don’t be concerned about the time it takes to do the analysis, or, in other
words, do not rush to solicit again
Lawrence Henze| Page #17 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
A Commitment to Research
Quick analyses based on data Attempt to distinguish these donors by:
• Zip code or SCF (sectional center facility, first three numbers of zip code)• Time lapse between first and second gift• Initial gift amount• Package that yielded second gift
So, if you get donors that match these simple characteristics, you may identify these prospects for different stewardship and solicitation strategies
Lawrence Henze| Page #18 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
A Commitment to Research
Higher level investigations Identify major or mid-level disaster donors in your database
· Donors with a first gift coming in response to disaster relief and subsequent giving rising to mid or major level
If this number is really small, identify major or mid-level donors from any source
Lawrence Henze| Page #19 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Research – Past Giving Trends
First define major/mid-level giving to your organization It is important that the amount is real to YOUR organization, not what
you want it to be – base the analysis on what your reality is So, for purposes of discussion, let’s assume that it is $1000-$5000 Let’s look for the number of years donors have contributed prior to
reaching “mid-level” Plot and analyze the results
Lawrence Henze| Page #20 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Research: Major or Mid-Level Giving Analysis
0
1
2
3
4
2 5 6 7 8 9 10 11 18
Nu
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f Mid
-Lev
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ors
Years of Giving
Years of Giving
Lawrence Henze| Page #21 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Research: What Did We Learn?
Findings· For example, these donors make an average of 9 annual gifts prior to
reaching major donor status· Establish a threshold, such as 6 annual gifts, to identify potential mid-
level prospects· Change stewardship efforts to cultivate better relationships with
these prospects at earlier stage· Personal thank you and cultivation program
Lawrence Henze| Page #22 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Research: High-End Analysis Through External Data
Data to append to your file:· Census· Cluster data
• Equifax Niche data• Acxiom’s PersonicX• Nielsen’s PRIZM
· Wealth· Summarized credit data
Lawrence Henze| Page #23 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Research: Donor Profiling with Niche Clusters
Household level clusters http://www.equifax.com/consumer/marketing/en_us Group people by life stages
· 26 Niches ranging from the young and wealthy "Already Affluent" Niche to the least prosperous "Zero Mobility" Niche, these clusters provide a picture of your prospects and donors and make it easier to craft the kind of targeted communications that make people feel like you are talking to them individually.
Lawrence Henze| Page #24 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Research: Donor Profiling with Niche Clusters
Applications of cluster data· Append cluster codes to your entire database· Segment donors and non-donors by dominant clusters· Analyze the distribution of codes
• For example, 77% of retained disaster donors are described by 9 of the 26 clusters
• 56% of retained disaster donors with mid-level giving to your organization come from 4 clusters
• 65% of the initial donors not retained are described by 7 separate clusters
• These results suggest different strategies
Lawrence Henze| Page #25 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Donor Profiling with Niche Clusters – Drilling Deeper
Further application of cluster data· Determine solicitation frequency or aggressiveness by cluster
performance· Craft messages by cluster· Use clusters to segment responders by channel:
• Direct mail• Telephone• Email• Personal solicitation
Lawrence Henze| Page #26 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Research: Predictive Modeling and Segmentation
Accurate and reliable methodology for segmentation of prospects by likelihood and ability to give
Scores based on characteristics of current and past donors Build a model on disaster donors who became mid-level or major donors Score new disaster donors against the models Concentrate high-end stewardship and cultivation activities on new
donors with highest likelihood scores
Lawrence Henze| Page #27 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Research – Modeling Output
Lawrence Henze| Page #28 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
Contact information:
Lawrence Henze, 843-991-9921
lawrence.henze@blackbaud.com
Link to Blackbaud white papers:http://www.blackbaud.com/company/resources/whitepapers/
whitepapers.aspx
Lawrence Henze| Page #29 © 2010 Blackbaud
Turning One-Time Donors Into Major Gift Prospects
New Book Published on April 13 on Amazon.comhttp://www.amazon.com/dp/0470539569/