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By chris

Quick and Dirty Guide to Finding New Donors

This post was written by Jeri Alcock, CFRE, West Coast Sales Manager at DonorSearch

We get it. Although fundraising is worthwhile work and a deeply satisfying endeavor, it’s not the easiest job in the world. When looking for donors, it sometimes feels like you’re losing a game of hide and seek. You know the donors are out there, but you can’t find them.

This guide is going to equip you with the tools to yell “olly olly oxen free” and reveal all the donors you’ve been looking for who have been right under your nose.

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By chris

[Guest Post] The Top 3 Biggest Donor Management Mistakes

This blog focuses on the world of prospect research and various related fundraising topics. To diversify our subject matter, we like to feature the work of our friends and colleagues in the community. Join me in welcoming Timi Paccioretti of Little Green Light and please enjoy her post on donor management.

The Top 3 Biggest Donor Management Mistakes

Small shop development offices are notoriously short-handed and over-worked. When you’re tasked with everything from writing copy for your newsletter to organizing a $10M capital campaign, it’s not surprising that finding time to manage your donor database is hard to come by. However, a well-maintained and utilized donor database is at the heart of every successful development operation. So, finding the time to invest in its upkeep can reap huge rewards in the advancement of your organization’s mission. By tackling these three donor management mistakes, you’ll be well on your way to having a strong, strategic development program at your nonprofit.

#1: Underestimating the key role a donor management system plays in the advancement of your organization’s mission

A recent report from Software Advice, a company that hosts reviews of fundraising software, found that 52% of nonprofit organizations are using Excel or Google Docs rather than a dedicated donor management system to run their development efforts. Unfortunately, these methods not only make it difficult to uncover trends in giving patterns, which are instrumental in developing strategic, more successful fundraising appeals, but they can also be extremely time-consuming in terms of manually entering and maintaining data. According to the same report, the adoption of a donor management system has excellent benefits for small nonprofits, especially those with limited staff, where automating even one task—such as sending acknowledgment letters to donors—can free up hours of time to focus on crucial projects and more strategic processes. An overwhelming 99% of those surveyed said their use of fundraising software has positively impacted the number of donations their organizations collect—and 98% said it has had a positive impact on their overall record keeping, reporting, and workflow efficiency.

#2: Expecting your accounting system to be an effective donor management system

When a donor management system is chosen based primarily for its ability to reconcile donations with an accounting system, nonprofits are neglecting one very important development need: cultivating relationships with their organization’s supporters. If the focus of your data management processes is keeping track of donations for tax purposes, you’re missing out on capturing information you need to build strong, lasting relationships with your donors. And strong relationships are the key to retaining donors! Nonprofit finance expert, Carolyn Sechler, CPA, encourages streamlining your organization’s accounting system and keeping it free from the transactional details stored in your donor management system. Some of the reasons include avoiding a slowdown in the performance of your accounting system, reducing redundancy and workload, and eliminating possible data entry errors or conflicts. Sechler also recommends clearly distinguishing your accounting tasks from your CRM tasks and creating a simple workflow to easily manage information between your donor management system and your accounting software.

#3: Maintaining your data on a one-time or occasional basis

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By chris

15 Fundraising Success Metrics to Start Tracking

Measuring your performance is a crucial step that nonprofits must take to succeed. There’s no better way of isolating and troubleshooting any ongoing problems. And worry not, there’s no shortage of methods of measuring performance. They’re called fundraising success metrics here, but they are also often referred to as key performance indicators (KPIs). These metrics are the analytical tools nonprofits need to continue raising more and more funds. If you’re looking for the top metrics that your nonprofit should be tracking, this list of 15 has been split into four separate categories. Skip around and see what stands out as a must-have KPI for your nonprofit. If you’re looking recommended tools to track your fundraising metrics, we’ve got a short list we recommend:
  • DonorSearch’s Online Tools – Our suite of online tools is ideal for any nonprofit who is interested in learning more about their donor’s previous charitable giving, real estate holdings, and political giving.
  • Fundraising Report Card – A free tool for nonprofit executives who want better insight into their organization’s analytics including donor growth, donor acquisition, and donor retention.
  • 360MatchPro – A perfect platform for medium to large nonprofits who want to understand how much they could raise from corporate giving programs and identify their largest matching gift opportunities.

General Fundraising Metrics

These are the big KPIs. They’re the ones most organizations are tracking. They give you a picture of your fundraising success and can point you in the direction you need to go. Remember — you won’t get far with any of these metrics if you have inaccurate or incomplete information on your donors. Perform prospect research to complete your donor data files.

1. Cost Per Dollar Raised (CPDR)

Cost per dollar raised is one of the most commonly referenced fundraising success metrics. CPDR answers a very simple question. Did we raise money, lose money, or break even? The definition and means of calculation are explicitly stated in the metric’s name, but let’s walk through the process to provide any necessary clarification. To determine cost per dollar raised, divide expense by revenue for the given fundraiser you’re examining (event, direct mail appeal, etc.). If the expense and revenue are equal, you broke even and don’t need to carry out any calculations. If expense is higher than revenue, you lost money. Your calculation will yield a number more than one. The opposite will be true if you raised money. To keep things simple, imagine you held an event that cost $500 and raised $2,000. Just from looking at the dollar amounts, you know you made money, but if you want to see the exact cost analysis you would do as follows: $500/$2,000 = .25 In this instance, for every dollar you raised, it cost your nonprofit $0.25.

2. Fundraising Return on Investment (ROI)

Fundraising return on investment is equally as popular a metric as cost per dollar raised is, and it’s very similar. Instead of dividing expenses by revenue, you divide revenue by expenses. Once you’ve divided the two amounts, a number greater than one indicates that you’ve raised money. Most organizations tend to favor one of these first two metrics over the other, like ROI over CPDR, for example. They both provide near identical information. The differences are almost negligible. Your organization’s preference will probably boil down to the means by which you’re looking to improve. If cost cutting is a priority, nonprofits would likely be more interested in cost per dollar raised; whereas, return on investment is a great indicator of the effects of making strategic changes to increase revenue.

3. Donor Retention Rate

Does your organization track how many donors it retains on a year-over-year basis? It needs to be. Let’s face it: the time it takes to cultivate donors is a time-intensive process, and after all the work engaging your supporters you don’t want to have to do the process all over again with a whole new set of supporters. Of course, you can always continue to grow their donor pool through acquisition, but you don’t want to waste all your efforts. Maintaining donors through retention is just as essential as acquiring new donors.  The two sides of the fundraising coin work best in conjunction. Your acquisition and retention rates should be improving concurrently. However, more often than not, nonprofits place much stronger emphasis on acquisition than retention. Acquisition of new donors is an expensive endeavor, though. Retention is more cost effective. Tracking your retention rate can reveal a lot about your organization’s performance, including:
  • How your nonprofit should prioritize communication with supporters.
  • If your organization is acknowledging donors in a thoughtful and immediate fashion.
  • The ease in which donors are able to give via your various donation methods.
Track your retention rate to see how your organization is doing and discover if your retention practices need improvement. If you do have an undesirable rate, look to your stewardship practices first, and make sure you re-evaluate with an eye for retention. What is your acknowledgment process? When do you follow up? How do you continue communications? Check out Razoo’s blog for 10 ways to improve donor retention rates, including ways to respond to the data you receive.

4. Donor Growth

Donor growth is what one might consider a domino metric. If donor growth is down, it’s likely that it didn’t get that way on its own. Lack of donor growth, or worse donor loss, is often the result of multiple factors. Measuring your donor growth ensures that you’re paying attention to your overall performance and puts your nonprofit in a situation to address any concerns early and quickly. Use this metric in conjunction with some of the others on this list to determine exactly why your number of donors isn’t growing. Essentially, you’ll be back-solving.

5. Conversion Rate

In order to determine conversion rate, you need a goal action and a list of donors you’d like to complete that action. The goal action could be anything from attending an event to responding to a direct mail letter, but the most common goal action involves donations. Typically the rate will be investigating how many prospects donated to a specific campaign or took an action as a result of a specific request. To find the rate itself, divide the number of people who completed the goal action by the total number of people who were given the opportunity to do so. Then multiply the number by 100 to get a percent. Let’s take a simple example. Say you sent out an email to 100 donors, asking them to follow a link and make a donation online. Of those 100, 30 followed the link and took the requested step. Therefore, your conversion rate in this instance was 30%. Conversion rate is one of the most cut and dry methods of evaluating the success of a given request for action.

6. Gifts Secured

This indicator is as standard as it sounds. How many gifts did your organization secure through the month? The quarter? The year? Tracking gifts secured over time is another way of saying you’re tracking donation growth. To delve even further into the data, you can separate the gifts by type:
  • major giving
  • planned giving
  • mid-level gifts
  • small gifts
  • annual fund donations
  • monthly donations
You’ll see crossover among some of the categories, but the more in-depth you go, the better you’ll be able to adjust and plan for the future.  

Giving Level Metrics

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By chris

3 Determiners of Donor Giving Capacity

Although most of us wish it were a science, determining donor giving capability is more of an art form. Prospect research reveals pieces of data about donors and then does the difficult task of analyzing what those data points mean. That result, a prospect research output, is donor giving capability. It is determined by three factors:
  1. Connection to Your Cause
  2. Philanthropic Propensity
  3. Wealth Markers
Some researchers start and end with wealth markers, which is a real detriment to giving capability accuracy.

In this article, we’re going to give you the lowdown on all things donor giving capacity, which includes:

  1. A discussion of the three determiners of donor giving capacity.
  2. An investigation into the accuracy of capacity scores.
  3. A summary of major gift capacity scores.
Let’s open with point one, the three determiners. Think of the giving capacity determiners as legs on a tripod, all necessary and all doing their part. 

#1: Connection to Your Cause

This is the number one way to determine donor giving capability. The best indicator of a new donation is a past donation, or, at least, a past involvement, such as volunteering. Cause connection can be evidenced by:
  • Past giving
  • Event attendance
  • Support on social media
  • Volunteerism
  • And more
A prospect without an interest in your cause isn’t much of a prospect at all. A prospect with a strong interest in your cause is the strongest type of prospect you have.

#2: Philanthropic Propensity

There are prospects hiding everywhere, donating to causes just like yours, and are essentially great donor candidates in waiting. Someone who has a proven commitment to nonprofits is going to be more likely to donate than someone who does not. Consider the two following examples:
  1. Holding a board seat for another nonprofit.
  2. Charitable giving outside of your cause.
Let’s discuss those one at a time. First — Holding a Board Seat for Another Nonprofit Think about all that holding a board seat entails. If you’re looking for philanthropic propensity indicators, this is as good an indicator as any. Members of a nonprofit board clearly understand the ins and outs of nonprofits. They know what it takes to run a successful organization. Board members also inherently have a demonstrated vested interest in charitable work. They certainly know the value of philanthropy. Second — Charitable Giving Outside of Your Cause In terms of indicators, this is a runner up behind giving to your organization specifically. Past donations mark prospects as people of action. They may not have donated to your cause yet, but that could be for a reason as simple as lack of awareness.

#3: Wealth Markers

These are typically what first come to mind when contemplating the factors that contribute towards giving capability. Wealth markers have their limits though, which we’ll go on to discuss in a moment. Common wealth markers include: Real estate ownership: Often used as a top marker, real estate ownership has a direct correlation to charitable giving. Besides demonstrating wealth, certain real estate amounts actually correlate to a higher likelihood of giving. For instance, prospects who own $2+ million in real estate are 17 times more likely to make a charitable contribution than an average prospect

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By chris

6 Steps to a Successful CRM Strategy

In an effort to bring our readers the best information available on prospect research and its surrounding topics, we like to sometimes highlight posts from outsides blogs that provide valuable insights and information regarding the nonprofit sector. Today we’re featuring one of those posts. 6 Steps to a Successful CRM Strategy initially appeared on Andar/360’s blog. You can check out the original version here!  This article was written by Real Bedard, President of Helix Ltd

6 Steps to a Successful CRM Strategy

1: Collect Information

Names, addresses, employer, cell numbers, email addresses, communication preferences, gifts, pledges, payments, formal/nicknames, relationships between accounts, demographics, competitive giving,… the list goes on and on. Information is everywhere and it can all be extremely valuable when getting to know your constituents. To be useful, information needs to be organized and categorized, and put in the right place. Most CRM systems are flexible and can store a variety of information. Get to know where things go. Your organization should have some data standards so everyone stores information in the same place. If you enter it in yourself, it will help you know how to get it out. Information management is NOT something to be delegated.

2: Log Communications

Every single interaction with every constituent should be logged. This includes e-mails, telephone, text messages, face-to-face visits, and all other communication methods. If a conversation mentions or involves a third person, then that third person should also be linked in the communication log. This is by far the simplest and most difficult task in any CRM strategy. It is simple to do but unfortunately, it requires very strong self-discipline. There are many benefits to logging communications. It documents the state of the relationship. It also greatly reduces the risks involved with staff turnover. Anyone on staff will be able to pickup the relationship where it left off. Considering the staff turnover levels in nonprofits, this process delivers benefits far beyond just a CRM strategy, it’s often critical to the survival of the organization.

3: Summarize into Notes

Although communication logs are critical to track what was said and any required follow up, they may be challenging to get a quick overview of a constituent. That’s why professional fundraisers will regularly review their constituent information, including communication logs, interests, social media, and other sources, and write a summary of the constituent into a single concise note. In some cases separate notes can be used to summarize a biography of the constituent, the relationship status, and the strategy going forward.

4: Use your Information

Collecting information is great but the benefits really kick in when the information is actually used. So, before any interaction with a constituent, it is critical to review your notes in order to understand your current relationship with the constituent. That knowledge will assist you to move the relationship forward instead starting at square one every time. Information can also be used to personalize your automated communications. If you know your constituent’s interests, you can add messages of interest in your newsletter, thank you letter, tax receipt, etc. Your marketing team can analyze your information to maximize returns from your messages.

5: Use Plans, Tasks and Move Management

CRM consists of three pillars: People, Process, and Technology. This is where process comes in. Henry Ford discovered almost exactly 100 years ago that a well defined process (assembly line) can dramatically increase productivity. Much of what an organization does is systematic, highly repetitive and can be documented. But documentation by itself is not very useful. These process steps should be entered into your CRM system so your staff can be guided along the process without missing a step or worse, missing some constituents. Your CRM system can also perform some tasks automatically, on schedule, without human intervention. Move Management is a little more “fuzzy.” This process guides you as you “move” your constituent along the path from non-donor to donor. This process is usually not very well defined and varies greatly from one constituent to another. Prospect codes can track your constituent’s progress along this relationship building continuum.

6: Measure and Improve

Once the above steps are implemented, you can begin to measure your performance. How many constituents are engaged? What communication methods yield the best results? Which donors are increasing their gifts? Which ones are not? What tasks should be improved? What fundraising strategies work best? What donor segments raise the most money? The truth is in the numbers. This is where your organization can strategically plan for the future and have the data to prove it works.