Lessons Learned from Haiti — Part 5: Turning One-Time Donors into Major Gift Prospects

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.


Agenda
 The Challenge Ahead
 Stewardship Reprise
 A Commitment to Change
 A Commitment to Research

Lawrence Henze| Page #3 © 2010 Blackbaud

The Challenge Ahead:


The Challenge Ahead – The Myth of Sisyphus



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


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



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:


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



 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?



 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



 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:


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



 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



 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



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



Research: Major or Mid-Level Giving Analysis

Years of Giving

4
Number of Mid-Level Donors

3

2

1

0
2 5 6 7 8 9 10 11 18
Years of Giving



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



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



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.



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



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



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



Research – Modeling Output



Contact information:
Lawrence Henze, 843-991-9921
lawrence.henze@blackbaud.com

Link to Blackbaud white papers:
http://www.blackbaud.com/company/resources/whitepapers/whitepapers.as
px



New Book Published on April 13 on Amazon.com
http://www.amazon.com/dp/0470539569/


Lessons Learned from Haiti — Part 5: Turning One-Time Donors into Major Gift Prospects

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