Last week, The Chronicle of Philanthropy released a report that predicted charitable giving will grow 3.6% in 2017 and 3.8% in 2018. This is good news. However, the report made clear that these gains will not be evenly distributed across the nonprofit landscape.
How can you ensure you get your fair share of this growing fundraising pie? Here are three quick suggestions:
1. Explore new prospect identification techniques. Many nonprofits are challenged by a dearth of new names and aging donor files. One interesting solution to combat these challenges is a new, privacy-compliant method that enables you to identify anonymous browsers to your website — people who are highly interested in your cause. (See Best Donor Acquisition List Ever.) In some circumstances, over 90% of the names generated from this prospect identification technique are brand-new to the nonprofit — and often decades younger than the NPO’s existing donors.
2. Leverage machine-learning models. In 2017, highly efficient targeting is essential. We’re finding that machine-learning models perform significantly better than regression models. (See 5 Essential Considerations for Nonprofit Modeling.) With machine-learning there is virtually no limitation on the amount of data you can examine, and you’re not running hypotheses as to which variable will drive a step-change in performance. Machine-learning puts every available piece of data to work on an aggregated basis — and the insights are continuously refined and updated.
3. Consider a trifurcated fundraising approach. In the past couple of years, the growth in charitable contributions has been largely driven by major donors. This phenomenon has been terrific for some nonprofits, but is not a panacea for all NPOs. Therefore, in 2017, most nonprofits should…
- Redouble their focus on major donors
- Find new efficiencies in their mass mailings and acquisition efforts
- Place a newfound emphasis on mid-level donors
We find that mid-level donors are often the best source for future major donors. While the universe of prospective major donors is often only 5-7% of the mid-level donor file, treating these donors differently can make a huge difference in their retention and overall donation behavior. (See Fixing Donor Inequality for more information on this topic.)
I hope these ideas are helpful and you have your best year ever!
Don McKenzie is President & Chief Growth Officer of Innovairre Communications, which supports more than 500 nonprofit organizations around the world. Contact us at Answers@Innovairre.com, and follow us on LinkedIn and Twitter.