Menu Close

Annual Giving

Using Donor Analytics to Develop Your Donor Engagement Strategy

Posted on by CFA

By Stephanie Brouwer, Senior Manager, Prospect Development

Gone are the days when nonprofit professionals and board volunteers convened around a table to hypothesize about a prospect’s inclination to give and ranked prospects based on recent giving history. While relationship insights and staff intuition remain important, there is both an art and a science to fundraising. Intuition (the art) combined with donor analytics (the science) will generate the best fundraising results. 

Where to start with donor analytics

If you are like many nonprofit professionals, you know your organization needs help with your donor database, but you may not be quite sure where to start. When I begin working with a new client, I help them define the problem they are trying to solve. Once we understand your challenges, then we can help optimize your data analytics and strategy to increase your return on investment. We often utilize data to prioritize which existing donors to ask for which appeal because it is more cost effective to cultivate people who are already giving to your organization versus acquiring new donors. 

CFA donor analytics can help answer:

  • How can my organization maximize philanthropic investments?
  • How can we optimize our organization’s database infrastructure to support our fundraising goals?
  • Is anyone on my team consistently tracking and recording donor engagement data such as event attendance and volunteer participation? 
  • How inclined are prospects to support our organization, and how does their inclination align with their wealth capacity?
  • Are there untapped pockets of opportunity in our database?
  • Is our organization staffed to properly manage the scale of giving opportunities?

Analyzing data to determine a donor’s inclination to give

Inclination analysis is a way to predict which prospects have the potential to move from having capacity to give to being likely to give with the right outreach, cultivation, and engagement. We use donor inclination scores to illustrate how willing and interested the people in your database are to give to your organization based on their past behavior. We develop the scores based on a customized, data-driven points model and project the potential size of gifts by combining this information with a wealth screening of your database. 

Here are examples of prospect prioritization used to prepare for a sample capital campaign.

The shaded boxes represent 176 prospects from a sample core prospect list with the greatest campaign potential. The blue section represents prospects for six-figure gifts. In this example, the “cold” and “very cold” prospects will need additional cultivation to determine if they are viable prospects for a major campaign, while the “warm” to “very hot” are more likely to be ready to make a commitment soon.

The range for these projections comes from the low and high range of the wealth capacity score, using a 5-year pledge commitment.

Most organizations discover through an inclination analysis that, on average, 75% to 90% of their donor database falls in the “cold” category. These may be lapsed or infrequent donors, but they are in your database for a reason. Many nonprofits solicit the same people again and again or buy data in pursuit of new donors instead of cultivating the “cold” prospects. Greater opportunity to move prospects from “cold” to “warm” exists when you increase engagement through strategic cultivation and donor communications. 

Check out our Donor Communications Guide to learn how changing or increasing your donor communications tactics can increase your return on investment.

Most development professionals rely on a “moves management” system to track cultivation of prospects along a continuum of giving. One person might be a past donor at risk of disengagement while another has steadily increased their giving over time. At CFA, we call this system the Donor Cultivation Cycle, and data analytics plays a key role in determining where your prospects lie within the cycle. Today’s technology tools bring increased accuracy to data analytics and can help you track when you have engaged with a prospect. 

  • Consultant Tip: Have one person on staff assigned as data manager or prospect manager. This role is especially crucial during any campaign outside of your regular annual giving effort. Ensure that this person is trained in the concept of moves management and how to maximize database tools.

Good tracking is key

How you collect, maintain, and track donor engagement informs how you determine and refine a donor’s inclination score. Tracking donor engagement is also a way to uncover trends that inform the next best steps to reach your goals. Tracking does not have to be cumbersome, and it must be done year-round. 

Many software applications will allow you to tag database records to enable you to match individuals with gifts and appeals. This is a great way to build new insights about your donors. For example, if you know that Donor A gave $100 through a text-to-give initiative but has never responded to direct mail solicitations, or that Donor B pledged $1,000 to a major gifts campaign at an event, and Donor C made a $25 contribution online from a postcard mailer QR code, then you can use this information to customize your outreach strategy and increase response rates.

  • Consultant Tip: If you are not sure which message will best resonate with a segment of your donors or prospects, start with an “A/B test”: send out two versions of a message — one that is heartwarming and one that is transactional — and track which gets a better response from which people. This can help you tailor future messaging.

When donor analytics is right for you

Taking a deeper dive into data analytics and donor inclination can be done anytime your organization is raising annual dollars and cultivating donors for special projects and future campaigns. For a capital campaign, I recommend analyzing your database and prioritizing prospects at least three to six months before you expect to launch a campaign.

CFA donor analytics helps shape fundraising strategy by harnessing the nuances of donor inclination, database training, and wealth screening, which can optimize moves management, cultivation steps, and best practices to increase donor engagement. 

Reach out today to see how CFA can help you harness data analytics in your fundraising strategy.

Stephanie Brouwer, Senior Manager, Prospect Development

Stephanie has over 10 years of experience in prospect research, prospect management, and data analytics at both higher education and nonprofit organizations. At CFA, Stephanie’s responsibilities include establishing strategy, procedures, and processes for prospect research, prospect management, and data analytics. Stephanie is Blackbaud-certified in Raiser’s Edge NXT and Raiser’s Edge and has a master’s degree in library science. Additionally, Stephanie is a Gallup-certified Strengths coach and has a passion for helping others understand, apply, and integrate CliftonStrengths results into their lives and work.

Donor Cultivation Cycles: Major Gifts and Annual Giving

Posted on by CFA

Every nonprofit organization seeks to build relationships with people who share their vision and want to help carry out their work. By the same token, nonprofit development officers and volunteer fundraisers are keen to understand how to drive increased donor engagement to catalyze their organization’s mission. A solid method for a successful outcome is to follow a Donor Cultivation Cycle. 

In this article, we focus on two important types of Donor Cultivation Cycles: Major Gifts and Annual Giving. These cycles are often used simultaneously, but with varying prospect segments. Using these cycles will help organizations sustain and increase philanthropic support and cultivate repeat donors to become major funders over time.

What is a Donor Cultivation Cycle?

A Donor Cultivation Cycle gives structure to nurturing relationships between an organization and potential donors and helps systemize the solicitation of an individual or group of donors for philanthropic support. 

What are the Benefits of a Donor Cultivation Cycle?

Stability and Consistency. The time you dedicate to following a Donor Cultivation Cycle will help sustain the connections between your organization and your donors. Each time a donor “moves” through the cycle, you enhance their alignment with your organization’s mission and deepen their commitment to your impact. Over time, the goal is for donors to become consistent and visionary partners.

Timing. Understanding when and how to solicit gifts (and knowing how much to ask for) is the primary benefit of investing time into each step in the Donor Cultivation Cycle. Laying out a plan for each prospective donor will help you identify and leverage the most effective timing and ask amount for solicitation. 

Staff and Board Engagement. Aligning your board members, staff, and volunteers around your Donor Cultivation Cycle will arm everyone who helps fundraise with consistent messaging, goals, and milestones to guide relationship-building with donors and prospects.

Donor Engagement. Nurturing individual donors and showing your organization’s appreciation through communications, recognition, events, and one-on-one meetings leads to growth in their personal involvement and the likelihood of repeat giving.  

Donor Retention. Finding new donors is a necessary part of development work as donors lapse and new people wish to support your work, but it can take two to three times the amount of time and effort to secure new donors as compared to retaining donors. Calculate your donor retention rate by dividing the number of repeat donors this year by the total number of donors from the previous year. A drop in donor retention rate year over year can impact overall funds raised. 

Comparing Donor Cultivation Cycles

While there are similarities in the steps to raising dollars for major gifts and annual giving, the type of gift, giving cycle stages, and timelines are slightly different. Major gifts have a longer time horizon, whereas annual gift appeals must be concise to ensure the prospect connects and wants to give back during a specific timeframe. 

Download the Major Gifts Vs Annual Giving Donor Cultivation Comparison Chart

Major Gifts – Major gifts are philanthropic contributions that match the passion of a donor to a strategic initiative that is designed to move an organization toward its vision. Examples of major gifts include funding for construction, program expansion, or special equipment. A major gifts program builds connections with people who have the desire and ability to give at higher levels. 

Every organization sets different thresholds for the definition of what qualifies as a “major gift” based on the size and budget of their organization. A major gift could be $1,000 and above for one organization, and $50,000 or above paid out over three to five years for another. The throughline is that a major gift reflects meaningful philanthropy derived from thoughtfully cultivated relationships. 

A word of caution: When your attention is pulled to major gifts and other special campaigns, don’t forget your annual needs and your smaller donors. The annual operating campaign is the lifeblood of your nonprofit.

Annual Giving – Annual gifts are one-time contributions that fund operations, typically in the form of an annual fund. Annual giving is often the entry point to a donor’s philanthropic engagement with your organization. Annual donors are often an organization’s most committed supporters and can be the basis for future major gifts when cultivated and stewarded properly. Annual giving strategies are typically multi-channel (email, social media, direct mail, phone calls, etc.) and focus on reacquiring past donors and acquiring new donors to build a consistent and strong base of funding support. 

Where Outside Expertise Can Help

The CFA team helps clients work through the full spectrum of the Major Gifts Cultivation Cycle and the Annual Giving Cultivation Cycle, including segmenting and qualifying your donor pool to ensure you know which prospect falls into which category. 

When to Implement a Donor Cultivation Cycle

It’s never too early or too late to implement both cultivation cycles into your nonprofit development function. We hope the ideas above have helped you understand the process. 

Please contact us at Creative Fundraising Advisors if we can help you get started today.

How to Activate Your Strategic Plan for Fundraising Success

Posted on by CFA

Reading your nonprofit strategic plan, I bet you will discover that philanthropy touches every section as it should. After all, a strategic plan identifies the impact an organization seeks to make along with the philanthropic resources required to achieve fundraising success. I would further wager that if you shared your plan with a major donor, it would inspire confidence in your organization and lead to deeper engagement and investment.

Benefits of Strategic Plans to Fundraising

Development professionals love strategic plans because they provide ready access to goal-oriented language for grant applications, solicitation letters, and prospect conversations. When I worked at The University of Chicago, my first initiative was our strategic plan which became our team’s field guide and provided metrics for which we could aim. Another benefit is volunteer engagement. When Board members or donors do not know how to engage in an organization, being a part of the strategic planning process allows them to learn more about the organization and align their passions and expertise with their needs.

What the Expert Says: Q&A with Kathy Graves

I talked with strategic planning expert and Creative Fundraising Advisors (CFA) Partner Kathy Graves of Parenteau Graves about how nonprofits can activate their strategic plans to help improve fundraising results. 

Liz Jellema: How do you recommend organizations measure development success within the strategic plan? 

Kathy Graves: First of all, development is only one facet of strategic planning. Secondly, while KPIs (key performance indicators) are important, numbers are not everything. The actual measurement of success is how many people maintain and deepen their engagement with and commitment to your organization as you live into your strategic plan. It helps to be more expansive in how you measure success. 

LJ: Should the strategic plan always push development to raise more dollars? 

KG: Most plans aim to raise more money, but that’s not the goal. The goal is to have an impact, to improve our world. It’s vital to name the result you seek before discussing how much to increase fundraising. Your strategy doesn’t have to be about raising more every year. It’s more important for philanthropic dollars to implement meaningful change. During the pandemic, some organizations saw new service areas grow exponentially and raised more dollars to deliver them. But many organizations are returning to or revisiting their original vision. For example, our human services clients find it important to stabilize lives by providing food and housing. Still, they are raising money to address systemic barriers that can lead to more significant permanent improvements for people. 

LJ: Many strategic plans are three or five years long. How do you recommend an organization’s Board and staff stay engaged and adjust for continuous improvement?

KG: Strategic planning is like personal training. You don’t stop exercising when you achieve your goal. Likewise, organizations cannot consider the strategic plan as a finished project and tie a bow on it. You must keep putting it at the center of your daily work. 

Ensure a few staff members are the key inside drivers—leaders who activate, monitor, and report progress. Everyone from entry staff to Board members owns the plan, but ultimately it needs key leadership to push it forward. 

The bottom line is that if you haven’t looked at the plan in three months, that’s a red flag. Set aside time monthly, quarterly, and annually for review. I also suggest that the plan be discussed at every Board meeting—share metrics and KPIs manageable for organizations to obtain and essential for organizational leaders to measure.

LJ: How can you use the plan to engage your major donors? 

KG: People want to give to success. One measurement of success is that you have a clear plan. Have confidence in your plan and show what you’ve accomplished.

A strategic plan is a terrific outreach tool. Utilize the plan as a runway for conversation. You might ask to sit down and share your progress with a prospect once you complete a one-year review. During the meeting, point to places where a prospect might provide dollars or expertise to help your organization reach its metrics and goals.

When you remain confident in your mission and plan, it will instill confidence in your donors that you can utilize their funds well. 

LJ: What formats have you seen work best for organizations to share their strategic plan? 

Do not send anyone a 28-page document! The operating plan can be long and detail-oriented, but that’s not what you’ll show most people. Brevity illustrates that you know what you’re doing and where your organization is going. Summarize your organization’s mission, vision, values, and goals on one page. I coach our clients to focus on three-to-five goals that are going to be the most critical drivers of success. 

Final Thoughts

Strategic plans are helpful when talking to prospects to illustrate that your organization has a plan and is acting on it. Are you prepared to share your plan with your Board and prospects? Reach out to CFA to learn more about our strategic planning services. We would enjoy helping your organization develop its next strategic plan. Contact us today!

Check out these sample nonprofit strategic plans:

The McNay | Cookie Cart | Hennepin Theatre Trust | Everybody Dance LA

Liz Jellema

Liz Jellema

Chief Operating Officer, CFA

Liz oversees CFA’s operations, culture, values, talent, marketing communications, and financial performance. Liz joined CFA from the University of Chicago where she served as Director of Operations and Strategic Initiatives for the Rustandy Center for Social Sector Innovation at the Booth School of Business. Liz enjoys translating strategy into growth for CFA’s portfolio of mission-driven clients.

Kathy Graves

Kathy Graves

Partner, Parenteau Graves

Kathy heads Parenteau Graves’s strategic planning. She is an award-winning writer, co-author, teacher, and recipient of the Changemaker Award from ARC Twin Cities. Prior to forming Parenteau Graves, Kathy served as marketing and public relations director for The Minnesota and Virginia Operas and on the staff of U.S. Senator Gary Hart. She also was the arts writer for the Southwest Journal for seven years and a Mondale Policy Fellow at the Humphrey School of Public Affairs.