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By Ryan Ponzurick

Making Your Organization A Donor Retention Powerhouse

Image provided by Flickr. Donor retention is a topic that has been getting an increasing amount of attention by nonprofits but is still greatly misunderstood. With a heavy focus by boards and executives on revenue intake, the nuances of keeping donors engaged can sometimes get lost when reviewing a P&L Statement at the end of the year. Neon One is part of the Fundraising Effectiveness Project, which is the largest dataset of individual giving data in the world. That project looks at hundreds of data points relating to giving information, but there is a particular focus on donor retention. Donor retention is simply ensuring that you keep a donor giving to your organization year over year. The data doesn’t lie on why this is important – when Adrian Sargeant researched lapsed donor behavior, he demonstrated that increasing the level of retention by 10% would improve the net growth in giving for a “typical” charity database by 50% net growth. Yet how can we get to this point? In an environment where we are being asked to deliver results immediately, how can we not only convince our stakeholders that retention is not only important but the key to long term success? The cost to acquire $1 from a new donor averages $1.25, yet retaining a donor comes at a significantly lower cost. Let’s unpack a few strategies to help us become a retention-centered organization.

Understand your current retention rates

In order to know where to go, you need to understand where you are starting from and getting a grasp on your retention rates as they stand will be the first step. Luckily the Fundraising Effectiveness Project has developed free resources to analyze your own data and you will need three simple fields to get a full audit of your situation. When you run through the Fitness Test that they provide, understand that industry-wide retention is very poor. At best, the average retention rate for a nonprofit is 46%, yet it is important to unpack what the reality of this number even is. First-time donor retention rates are drastically lower, typically in the 25% range and a healthy amount of donor retention rates overall are being driven up by increasing amounts of donors giving online.

Establish a data-driven culture

Organizations that are driven (but not constrained) by data are the most creative and high-functioning nonprofits. Having information at your disposal that can accurately tell you about your organization’s performance is empowering. These organizations are able to use their time more effectively — not worrying about “where they are” or “how they’re doing.” They know, because they’ve used the data at their disposal to find out. Certainly, a data-driven culture has an effect on the fundraising side of the nonprofit. The ability for your organization to make decisions based on data and not “gut instinct” or because “we’ve always done things this way” will be the difference between increasing retention and growth in giving rates for your organization or scrambling to make up gaps in your end of the year giving hoping things get better next year. Review where your current retention rates are and make a realistic goal to increase them over the course of the year. Being optimistic yet realistic is the key here and this is why understanding your current standing with your donors will allow you to address retention properly.

Segment your donors

Grouping your donors into easily targeted segments will ensure you can message them properly. The most common reason a donor stops giving to a nonprofit is poor communication and the last type of communication a donor wants to receive is one where your organization makes it clear you have no clue who they are. Data suggests that regardless of the age of the donor, an omnichannel approach to donor engagement will be the most effective way to increase your retention rates. Segmenting your donors to create targeted messages in an omnichannel way will ensure that you are speaking to where the donor is, not where you personally want them to be. If you are donor-centered in your communications then your ability to upgrade a small donor into a major donor becomes much easier. Segmentation is also vital when doing prospect research on your donors, since you will be able to craft a pipeline management strategy that your major gift officers will be able to put into practice much quicker.

Utilize strategy and tactics

Once you have segmented your donors, start to scope out the strategy for engagement and the tactics you will use to achieve your objectives. Many organizations start with the tactical first and try to lead with the flashiest ways to engage donors, such as costly events. Instead, your organization should take a step back and calculate the return on investment it will take to retain the largest segment of your donors. A solid example of this is around how we speak to donors. A strategy your organization would employ is donor stewardship, or the ability to make donors feel welcome. The tactical application of this strategy could come in the form of well-written gift acknowledgement letters

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By Ryan Ponzurick

Donor Management Software: 5 Features All Nonprofits Need

Your donors are the backbone of your organization: without their ongoing support, your nonprofit wouldn’t be able to complete any of the projects that are vital for achieving your goals. Every donor is unique, with different passions and motivations. They give at different levels, for different reasons, at different times of the year. And that can be a lot to keep track of, especially when you want to maintain strong relationships with all of them! So what’s a nonprofit team to do? Invest in donor management software! With a strong centralized database to keep track of your donors’ personal information and engagement history, you can strengthen your fundraising strategy, moves management, event planning, and marketing tactics, all within one software platform. =&0=&Our favorite donor management software features are:
  1. Software customization and flexibility.
  2. Major gifts stewardship tools.
  3. Reporting and analysis capabilities.
  4. Event planning and management.
  5. Subledger capacities for contribution income.
With these five features, you’ll be able to improve your relationships with existing donors, cultivate new ones, and strengthen your nonprofit’s strategies across the board. If you’re ready to learn, let’s get started!

1. Software customization and flexibility.

In order to effectively use a donor management software as the central database around which to build your fundraising strategy, you have to be able to customize the software solution to fit your organization’s unique needs. There are many ways that software needs to be flexible—appearance, user permissions, and the ability to integrate with other programs are all important ways that your donor management software needs to be able to adapt. But those aren’t the only things to keep in mind! As a nonprofit, your organization has unique needs that your donor management software should address. With your new software, your nonprofit’s team should be able to:
  • Create custom donor profiles. A robust donor management software should provide you with comprehensive donor profiles, but you should also be able to add custom fields based on your organization’s unique relationship with its donor population. These additional fields also improve understanding of a donor and strengthen your database management strategy.
  • Build custom reports. Your organization needs to be able to make data-driven decisions in order to strengthen all facets of your strategy. To do that, you’re going to have to analyze and understand your data. With custom reporting abilities, you can create reports based on any criteria your organization needs.
  • Design custom dashboards. Every member of your organization’s team has a slightly different job and will need to see different things. With customizable dashboards, each team member can design their homepage to include the information most crucial to their position and daily tasks.
Customizability and flexibility of your software solution is important for an organization that wants to increase efficiency and strengthen donor relationships in a consistent and predictable manner.

2. Major gift stewardship tools.

Major gifts are a nonprofit organization’s crowning fundraising achievement. These gifts represent months of careful cultivation and personalized solicitations, and your donor management software should be able to help your team gain more of these donations. =&4=& But what does this look like in practice?
  1. Use your donor management software to identify donor prospects with an integrated wealth screening tool, and analyze existing donors for opportunities for cultivation with a comprehensive search tool.
  2. Create a personalized dashboard for major gift solicitation opportunities that includes donors, active proposals, and other important information for your major giving strategy.
  3. Strengthen your moves management strategy with the ability to track meetings, phone calls, event attendance, and other interactions, as well as schedule follow-ups automatically.
  4. Create specific cultivation timelines for each major gift prospect, and monitor the status of their cultivation process on an individual basis.
Using software to manage your major giving strategy allows your major gift officers to set standards and create a predictable, consistent process for your cultivation and solicitation strategies. =&5=&

By Ryan Ponzurick

Your Nonprofit CRM: A Q&A Guide to Improve Data Management

Your nonprofit’s CRM is a goldmine for important information regarding your nonprofit’s constituents. Without this important software solution, it would be incredibly difficult to keep up with fundraising outreach or to establish an effective engagement strategy for supporters. Despite having access to this important tech solution, have you ever looked at your nonprofit annual report and seen holes in your own fundraising strategies? =&0=& The best way to improve your data management for more strategic fundraising efforts is making the best use of your donor database measurements. You’ll need to know what measurements to keep track of, how to best track them, and how to read this important data. We’ve compiled a list of frequently asked questions regarding data management, all of which can be answered by making better use of your CRM.  

How do I streamline data collection?

Too many nonprofits manually transfer data from one software solution to another. Doing this takes time and energy that could be better spent on efforts more related to that nonprofit’s mission. Throughout this process, they have to choose which pieces of data are important to transfer and which are irrelevant for future efforts. =&1=& Look at the functionality of your CRM to see if you also have access to fundraising and data collection software such as donation pages, surveys, and other tools. Don’t forget that even the best CRM software might not offer these functions, but may integrate with other software solutions that do. Some of the important information you can collect from your CRM or integrated software includes:
  • Online giving information. Your CRM should store details about the gift information when someone donates to your nonprofit. Your CRM should automatically pull and store information from your donation page software about each donor’s gift amount. Then, you’ll have access to the average amounts plus a historical timeline of giving for each of your donors.
  • Matching gift eligibility. Ask donors about their employment on donation or survey forms. When this information is added to your CRM, it’s easy to check matching gift eligibility from a matching gift database.
  • Donor communication metrics. When you can connect to your donors through an email service within your CRM, it’s easy to streamline the flow of important metrics such as open and click-through rate. Plus, you can auto-populate the names and contact information of donors into templates with this feature.
For more features and integrations to look for in your donor database, check out Bloomerang’s guide to find the best nonprofit CRM.

How do I track multiple methods of engagement?

There are so many opportunities for engagement offered to your donors through your nonprofit. They can come to events, donate, post to social media, read your newsletters, visit your website, and more. While you could go through and check each of these metrics individually in your CRM, wouldn’t it be easier if there was a single engagement score that measures all of these things? That’s exactly what Dr. Adrian Sargeant asked himself and why he came up with an algorithm to measure overarching donor engagement for individual donors. =&5=&In Bloomerang’s CRM profiles, this engagement level presents itself as a meter measuring an individual’s level of engagement as “cold,” “warm,” “hot,” and “on fire!” When you have access to the engagement metrics for individual donors, you can more easily: =&6=&major giving=&8=& The donors who are heavily engaged (or “on fire!”) and also have good wealth indicators are likely to be good candidates for major giving in the future. =&9=&=&10=&

By donorsearch

Nonprofit Data Management: 5 Technology Tips to Know

Nonprofits collect all kinds of data on a daily basis. Every time a supporter makes an online donation, signs up to volunteer, or fills out an event registration form, you receive valuable information about who these individuals are and how they like to engage with your organization. To make sure that information doesn’t go to waste, you need a donor data management strategy that supports your goals. So how do you design such a strategy? Here’s a hint: technology can help! As nonprofit technology consultants, we at DNL OmniMedia know a thing or two about how technology can fit into almost every part of your organization. When it comes to managing your nonprofit data, your technology setup plays an integral role. To help you use technology to manage data in the most effective way, we’ll talk through 5 must-know tips:
  1. Build an integrated CRM system.
  2. Give donors control over their data.
  3. Create targeted donor segments.
  4. Devote time to database maintenance.
  5. Develop processes around data entry.
Before diving into our advice, make sure your organization has the right software on-hand to carry out these strategies. Check out DNL OmniMedia’s top 8 nonprofit technology solutions to see if any of our favorite tools might complement your data management plan. Now let’s get into the first tip.

1. Build an integrated CRM system.

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By donorsearch

3 Tips for Successfully Managing Your Donor Data

It’s not an understatement to say that your donor data is the lifeblood of your fundraising efforts – it helps you keep track of who’s supporting you, their demographics, their giving patterns, and so much more. Successful fundraising in the digital age relies on managing your data to help you track donors and donations, perform analysis, and communicate efficiently. If you want to grow your nonprofit year over year, you should be looking at your methods for storing – and reading – your donor data. However, if you’re working with outdated software or obsolete systems, you could be missing out on all the analysis and stats that good donor management software can provide. That’s why it’s important to not only invest in an up-to-date CRM, but also know how to utilize it to its full ability. We’ve got a few tips to help you manage your data better so it can perform more efficiently and help you raise more money!

Assign different roles to different team members

Maintaining and managing a great CRM can involve a lot of effort, and it can be tough to put it all on one person. Understandably, not all nonprofits have enough overhead to hire a specific person for the role, so instead they split up the job between multiple team members. If good communication isn’t kept up, it can be a case of broken telephone – and that definitely impacts the efficiency of your donor management. When the work is divided, make sure that the various tasks are specifically assigned to different individuals, with no confusion or overlap. This will help reduce duplication of data and can allow you to make sure that everyone working with your database is properly trained for the tasks they need to complete. Some CRMs let you assign these roles directly. By doing so, you can be sure that the person or people you want to perform certain tasks, such as adding donations or sending communications, are the only ones able to do so. It doesn’t hurt to break up the donor management among a number of team members – just make sure that everyone’s on the same page about what their responsibilities are.

Schedule periodic data clean-ups

Donor management is handy, but it isn’t infallible – there are still errors that can happen within your database, even with top-of-the-line software. And if these errors are left unchecked, they can develop into huge problems that skew how your donor data is read. The last thing you want is for any analysis to be off when you’re making fundraising projections or determining demographic marketing! Luckily, some CRM tools can help you identify common problems, like duplicate donor listings or inaccurate addresses. The former can be a huge issue, especially when an individual has been entered in the database multiple times. A good CRM will be able to identify this error and merge the profiles together quickly and easily. In other cases, basic reports can identify donors or donations that are missing information like ZIP codes or phone numbers, while simply taking a scan through small groups of data can help you find common errors like misspelled names and incomplete profiles. All this can give you a better, more accurate picture of your donors!

Perform regular security tests

A nonprofit’s worst nightmare would be to have its donor data breached by a hacker. Any old, outdated CRM might be vulnerable to attacks that allow criminals to get ahold of financial or personal information – a disaster when it comes to sensitive data that nonprofits keep records of. That’s why it’s so important to have a software vendor that performs penetration tests to see how well the CRM reacts – or if there are any weak spots that need patching. Schedule regular tests – think monthly – with your software vendor to ensure that any vulnerabilities are patched up and any required updates are applied. Making sure your donor’s data is absolutely secure is a huge part of your donor management software, so you ought to put data security front and center. It’s key to managing your data – and it helps you sleep better at night, too. At the end of the day, your donor data is incredibly valuable when it comes to understanding your supporters – which is why you need to read it correctly, protect it, and make sure it’s working as it should at all times. Take care of your donor data and it’ll take care of you!

Author Bio

Caitlin Hotchkiss is the content and social media manager for FrontStream, covering all the best and latest news and tips for fundraising success. With many years as an online influencer, she works to stay ahead of the trends by keeping one eye on upcoming online tools and the other on established favorites, spreading the good word of charities and nonprofits across the digital landscape.

By donorsearch

Nonprofit Annual Reports: 7 Best Practices [Templates]

Every year nonprofits present their accomplishments and projects to their supporters and the general public in an annual report. An annual report details an organization’s mission, growth over the course of the year, projects that helped serve the community, statistics related to the organization’s cause, and much more. Ultimately, your organization’s annual report can be used to cultivate new partnerships with major donors and sponsors as well as recognize those who have helped you reach your goals thus far.  A successful, captivating annual report can make the difference between reaching your goals for the upcoming year or falling short. With so much at stake, it’s no wonder that organizations take the creation of their annual report so seriously. From in-depth brochures to interactive web pages, the annual report has changed drastically over the years. While the design and content of your report will vary depending on the type of organization, there are essential annual report best practices that every nonprofit can use:
  1. Create a plan for your nonprofit annual report.
  2. Include all the nonprofit annual report requirements.
  3. Focus your annual report on your donors’ accomplishments.
  4. Use visuals in your annual report to keep readers engaged.
  5. Be honest about your nonprofit’s progress.
  6. Highlight major contributors in your nonprofit annual report.
  7. Inspire supporters to take action.
With these tips and our annual report templates, you’ll be prepared to create a report that recognizes your donors and inspires others to help you succeed. In addition to our best practices, we’ll delve deeper into the benefits of annual reports. Our bonus section will explain how the information in annual reports can help feed charitable giving databases (like DonorSearch’s), which can boost your prospect research.   Let’s get started!  

1. Create a plan for your nonprofit annual report.

When your organization starts a new fundraising campaign, creating a strategy is the first step — and the same goes for your annual report. You’ll need the help of multiple departments to assemble all the information as well as compile and design the document.  First, every successful nonprofit annual report has a clear purpose and audience that your organization needs to determine.  It’s likely that your audience will be your supporters as well as prospective major donors, corporate sponsors, and foundations. At its core, your annual report should persuade your audience to support your cause, but you might have smaller objectives (i.e., highlighting a new project or attracting more local sponsors) specific to your nonprofit’s goals. Now that you’ve established your audience and goals, you can schedule your plan of action. Your annual report strategy might include:
  • Delegating responsibilities and timelines to team members.
  • Interviewing supporters for their feedback.
  • Compiling financial statements.
  • Collecting key metrics from fundraising campaigns.
Depending on your organization’s fundraising campaigns and programs, you might not be able to cover everything you’ve accomplished. That’s why you should try to boil down all your activities to a few major achievements. By centralizing your accomplishments around 3-5 core themes, you will help keep your annual report focused, leading supporters to your core objective.  When your nonprofit has a clear plan, not only will the process of creating your report run smoothly but the end result will also have more direction and purpose.  

2. Include all the nonprofit annual report requirements.

If you look at a nonprofit annual report, you’ll see that most include similar elements no matter what type of cause they support. While it’s fine to get creative with your additional sections so that your report stands out, you also need to make sure that all the essential information is present. Moreover, your accomplishments might change from year to year but the underlying points should stay the same. Including these elements will keep your annual reports consistent and create the foundation for what you want to include.  When you look at a noteworthy annual report, you’ll find that the organization has covered the following key points:
  • A clear mission and focus. If you could boil down your organization’s values and purpose into a single sentence you would have your mission statement. Since supporters won’t be the only people reading your report, your mission statement needs to be at the very beginning. Readers should know about your organization’s mission and what change you hope to make before jumping into the data.
  • A list of projects you initiated. From fundraising events to volunteer efforts to community programs, let readers know what your organization accomplished over the course of the year. The majority of your report should focus on these projects, breaking down your achievements into metrics your readers can understand.
  • A financial statement. Let’s face it: supporters want to know how their money is being used. Being honest about your organization’s expenses helps to establish trust among your supporters. Plus, it shows potential donors that your nonprofit can manage funds responsibly and effectively.
  • An account of major contributions. In addition to showcasing your organization’s success, your annual report is also about thanking those who helped you achieve your goals. Listing out and thanking your major contributors, influential staff, and board members should be a necessary part of our report.
Throughout this article, we’ll expand on how your organization can make these elements exceptional, but for now, look at this example of how a hospital can explain their mission in a moving way: In our example, Inner City Hospital has displayed their mission statement predominantly and included their history to give readers context.  

3. Focus your annual report on your donors’ accomplishments.

As we’ve mentioned before, your annual report is a chance to present all the good your nonprofit was able to accomplish. That being said, it’s easy for nonprofits to get stuck in the mindset of congratulating their accomplishments without focusing on their donors’ support. Instead of centering your report on your achievements, make it about your donors. This goes beyond switching the language of your report to address your donors. A nonprofit annual report that puts donors first focuses on how projects and programs were realized because of your supporters’ donations and time. For example, your annual report can focus on the many volunteers that donate their time to your organization like in the image below: In the volunteer section of this report, the hospital focuses on recording statements from volunteers and displays images of them helping patients. Alternatively, when you talk about the various projects your organization has implemented, make sure to mention the campaign that funded the project. Let readers know that your supporters helped you reach (or even exceed) your fundraising goal and how their funds and support impacted your cause. By showing readers that your accomplishments were achieved because of supporters, donors and volunteers know that you’re aware of all they do. Not to mention, it shows potential donors that your nonprofit is built on the support of passionate people. Therefore, your team should take every opportunity to direct attention to your supporters accomplishments.  

4. Use visuals in your annual report to keep readers engaged.

When your team creates your nonprofit annual report, they will compile all your efforts and data from the past year and condense it into a 10-page document. That’s a lot of information you want supporters and prospective donors to read! With so much information to convey, using visuals is a great way to turn information into an image that readers can easily understand. Plus, the more visuals, the more engaged your readers will be.  Think about it: if you were asked to read a report full of paragraphs of text, you’re likely to skim the information or give up after reading the first page. Once your team spends all their time and effort creating an annual report, you want people to read what you’ve put together. Visuals have many benefits, such as:
  • Breaking up blocks of text so the reader has a more enjoyable experience.
  • Transforming complex data into easy-to-understand information.
  • Conveying your cause in a way that puts your readers in the shoes of those you support.
After all, you’ve been tracking key fundraising metrics

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