How Data Can Improve Your Nonprofit’s Response Rates
After many organizations received a fundraising boost during the pandemic, direct response professionals once again seem to be bracing for a decline. A recent survey by The Nonprofit Alliance found that nearly half of direct response consultants said their clients lowered expectations from 2022 to 2023, while less than 10% said they expected their clients to do more direct mail fundraising this year compared to last year. Nonprofits across the board are generally seeing fewer overall gifts but higher average gift amounts, leading some to increasingly shift resources toward major or midlevel giving programs.
Even so, direct-response fundraising remains critically important—both as a source of sustainable annual revenue and as a funnel for the cultivation of higher-level donors. In the face of inflationary pressure and constrained budgets largely out of your control, focus on what you can control and ask yourself how you can work smarter. Specifically, I suggest taking an assessment of how you currently use data to drive your direct response fundraising and what changes you could implement to become more data driven.
It might be much easier than you think, and it can materially increase the success of your direct-response program while also making it more defensible. Below are four simple yet highly effective ways that data can help you increase response rates.
1. Vary your frequency.
Too many organizations employ a “one-size-fits-all” solicitation strategy. Every constituent not already assigned to a major gift officer or special cultivation track gets X number of solicitations each year. This doesn’t reflect the reality that some people are highly unlikely to respond no matter how many solicitations they receive, while others will reward you for engaging them more frequently. I’m a strong believer that every mass appeal program should utilize at least one quantitative data point to inform who gets solicited more or less often.
It doesn’t have to be complicated or time-consuming. At Blackbaud, one of the services we offer is a “Philanthropic Likelihood Score” that uses licensed and proprietary third-party data to provide a directional prediction of whether an individual is likely to be philanthropic. It is expressed as a numerical value from 0 to 1,000. Here’s an example of how an organization might use this single data point to segment its audience for solicitation frequency:
|800 – 1000||6x per year|
|600 – 799||4x per year|
|400 – 599||2x per year|
|0 – 399||1x per year|
Alternatively, you can segment recipients using an internally calculated measure such as an RFM (recency, frequency, and monetary value) or engagement score. Anything is better than nothing. No matter what donor CRM or engagement platform you use, it should have at least basic segmentation capabilities that allow you to split your audience into a few different groups with varying solicitation frequency. Use them.
2. Know your target demographic.
Before any appeal, ask yourself: What is your target demographic?
- Male or female?
- Young or old?
- College educated or not?
If you have demographic data appended to your house file, you can use it to segment your best target audience for a given solicitation.
Additionally, understanding your audience demographics can present opportunities to increase responsiveness by deploying additional “flavors” of messaging. Let’s say you are a food bank trying to raise awareness (and funds) for food insecurity in your region. What if I told you that 40% of the households on your mailing list have school-aged children? Perhaps this sizeable audience segment would respond at a higher rate to a message that emphasizes food insecurity among children and its impact on learning and development.
Which demographic data is going to be actionable for your programs will depend on your mission and message. In addition to data vendors who can append certain demographic information to your file, there are also survey tools, digital analytics, and consulting partners that can help you understand the demographics of your constituents at a macro level.
3. Optimize your channel strategy.
Just as important as the message is the medium. There are people who will never respond to even the most compelling and well-targeted solicitation if it comes through a channel they don’t like or don’t use. For example, many people compulsively throw direct mail straight into the trash as soon as they recognize it as anything other than a bill or personal letter; if you don’t know who they are, they can be a huge drag on your response rate. Others are so inundated with emails that they don’t read most of them, and actually prefer direct mail. Ironically, 72% of teenagers and 20-somethings (digital natives to the core) get excited by what the mail carrier brings every day.
I contend that a one-size-fits-all strategy is inherently suboptimal. Simple segmentation to establish distinct groups with different channel cadences does not have to be complicated or time-consuming. Some data vendors can append your file with predictions of each constituent’s likelihood to respond to a given channel based on third-party data. Or you can use internal historical data to inform segmentation.
Furthermore, you should strive for an omnichannel experience whereby different touches through different channels work together to move constituents through your funnel. Do you know how many of the people who responded to your last direct mailer have visited your website in the past 30 days? How does that compare to your email respondents? Understanding how communication channels work together and where each one is most effective in the cultivation lifecycle will help you use them all more effectively.
4. Mix up your call to action.
A monetary donation is just one of many ways a person can support your cause. Often, another form of engagement is a necessary first step in the journey to sustainable financial support. Signing a petition, volunteering, crowdfunding, and promoting your content on social media are just a few of the ways a constituent can support your cause and develop a sense of partnership with you that will make them more likely to respond to future fundraising requests.
Analytics partners and consultants can leverage external data to help you prescribe the best call to action for each constituent. You can also leverage your own historical engagement data and your marketing tech stack.