Turning One-Time Donors Into Major Gift Prospects

May 5, 2010
Lawrence Henze, Managing Director & Senior Consultant
Targe...
Your Presenter
      Managing Director and Senior Consultant, Target Analytics™,
       a Blackbaud Company
      Author...
Turning One-Time Donors Into Major Gift Prospects


Agenda
     The Challenge Ahead
     Stewardship Reprise
     A Com...
The Challenge Ahead:
Turning One-Time Donors Into Major Gift Prospects
Turning One-Time Donors Into Major Gift Prospects


The Challenge Ahead – The Myth of Sisyphus




Lawrence Henze| Page #5...
Turning One-Time Donors Into Major Gift Prospects


The Challenge Ahead
     As you recall, Sisyphus played some tricks o...
Stewardship Reprise
Turning One-Time Donors Into Major Gift Prospects
Turning One-Time Donors Into Major Gift Prospects


Stewardship Reprise
     April 21st webinar presented by David Lamb o...
Turning One-Time Donors Into Major Gift Prospects


Stewardship Reprise: Sell Your Mission, Not The Crisis
     Thank you...
A Commitment to Change:
Turning One-Time Donors Into Major Gift Prospects
Turning One-Time Donors Into Major Gift Prospects


A Commitment to Change
     In addition to the stewardship issues add...
Turning One-Time Donors Into Major Gift Prospects


A Commitment to Change
     Look at your fundraising program outside ...
Turning One-Time Donors Into Major Gift Prospects


A Commitment to Change
     The correlation between direct response f...
Turning One-Time Donors Into Major Gift Prospects


A Commitment to Change
     The pursuit of more donors is not necessa...
A Commitment to Research:
Turning One-Time Donors Into Major Gift Prospects
Turning One-Time Donors Into Major Gift Prospects


A Commitment to Research
     Assumption: you have retained and/or co...
Turning One-Time Donors Into Major Gift Prospects


A Commitment to Research
     Quick analyses based on data
     Atte...
Turning One-Time Donors Into Major Gift Prospects


A Commitment to Research
     Higher level investigations
     Ident...
Turning One-Time Donors Into Major Gift Prospects


Research – Past Giving Trends

     First define major/mid-level givi...
Turning One-Time Donors Into Major Gift Prospects


Research: Major or Mid-Level Giving Analysis


                       ...
Turning One-Time Donors Into Major Gift Prospects


Research: What Did We Learn?
     Findings
         For example, thes...
Turning One-Time Donors Into Major Gift Prospects


Research: High-End Analysis Through External Data


     Data to appe...
Turning One-Time Donors Into Major Gift Prospects


Research: Donor Profiling with Niche Clusters

     Household level c...
Turning One-Time Donors Into Major Gift Prospects


Research: Donor Profiling with Niche Clusters

     Applications of c...
Turning One-Time Donors Into Major Gift Prospects


Donor Profiling with Niche Clusters – Drilling Deeper

     Further a...
Turning One-Time Donors Into Major Gift Prospects


Research: Predictive Modeling and Segmentation


     Accurate and re...
Turning One-Time Donors Into Major Gift Prospects


Research – Modeling Output




Lawrence Henze| Page #27               ...
Turning One-Time Donors Into Major Gift Prospects


Contact information:
Lawrence Henze, 843-991-9921
lawrence.henze@black...
Turning One-Time Donors Into Major Gift Prospects


             New Book Published on April 13 on Amazon.com
            ...
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Lessons Learned from Haiti — Part 5: Turning One-Time Donors into Major Gift Prospects

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This session helps nonprofit professionals understand the best strategies for retaining first-time “crisis” donors and methods for moving retained donors closer to their ultimate giving destination.

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Lessons Learned from Haiti — Part 5: Turning One-Time Donors into Major Gift Prospects

  1. 1. Turning One-Time Donors Into Major Gift Prospects May 5, 2010 Lawrence Henze, Managing Director & Senior Consultant Target Analytics
  2. 2. Your Presenter  Managing Director and Senior Consultant, Target Analytics™, a Blackbaud Company  Author and Frequent Presenter on Fundraising and Nonprofit Topics  Law degree, University of Wisconsin – Madison  15 years as fundraising professional, plus  15 years as consultant to colleges, universities, nonprofits and Fortune 500 companies on the use of predictive modeling in fundraising and targeted marketing.
  3. 3. Turning One-Time Donors Into Major Gift Prospects Agenda  The Challenge Ahead  Stewardship Reprise  A Commitment to Change  A Commitment to Research Lawrence Henze| Page #3 © 2010 Blackbaud
  4. 4. The Challenge Ahead: Turning One-Time Donors Into Major Gift Prospects
  5. 5. Turning One-Time Donors Into Major Gift Prospects The Challenge Ahead – The Myth of Sisyphus Lawrence Henze| Page #5 © 2010 Blackbaud
  6. 6. Turning One-Time Donors Into Major Gift Prospects The Challenge Ahead  As you recall, Sisyphus played some tricks on Hades and Persephone, and, as a result, was condemned for eternity to hard labor  Turning one-time donors into major gift prospects IS more likely  However, like Sisyphus’ task, it will be painstaking and arduous at times  Unlike Sisyphus, you can break the repetition and achieve results  To do that, however, you will need to commit to change in your development operation And you will need to be patient Lawrence Henze| Page #6 © 2010 Blackbaud
  7. 7. Stewardship Reprise Turning One-Time Donors Into Major Gift Prospects
  8. 8. Turning One-Time Donors Into Major Gift Prospects Stewardship Reprise  April 21st webinar presented by David Lamb on stewardship  Key points: Disaster giving is often impulse philanthropy Philanthropy begins with repeat giving Disaster giving can be done without knowledge of organization’s greater mission Stewardship and thanking need to educate new donors to organization’s greater mission Lawrence Henze| Page #8 © 2010 Blackbaud
  9. 9. Turning One-Time Donors Into Major Gift Prospects Stewardship Reprise: Sell Your Mission, Not The Crisis  Thank your disaster donors for their first gift  Report the total giving from all disaster donors and also a separate total for first-time donors  Report the accomplishments enabled through this gift support  Next, suggest what this gift support would do for organization and its mission if these donors continue but redirect their support Provide specific examples For example, you could share what your organization learned from Haiti that needs improvement and seek funds for that purpose  Survey Lawrence Henze| Page #9 © 2010 Blackbaud
  10. 10. A Commitment to Change: Turning One-Time Donors Into Major Gift Prospects
  11. 11. Turning One-Time Donors Into Major Gift Prospects A Commitment to Change  In addition to the stewardship issues addressed in David’s presentation, there are other significant factors that stand in the way of the development of loyal donors  Remember, loyal donors far more likely to evolve into major donors Lawrence Henze| Page #11 © 2010 Blackbaud
  12. 12. Turning One-Time Donors Into Major Gift Prospects A Commitment to Change  Look at your fundraising program outside of disaster solicitations  Questions to ask yourself or your organization: How frequently do we solicit our donors? Is retention rate important to our organization? Do we spend significant time replacing lost donors with newly acquired donors? Do we respond to new donors with a thank you and a second gift request combined? Even if the second gift is made at that point, do these donors persist for three or more years? Lawrence Henze| Page #12 © 2010 Blackbaud
  13. 13. Turning One-Time Donors Into Major Gift Prospects A Commitment to Change  The correlation between direct response fundraising and major giving strength is not strong  Wait! My organization utilizes direct response fundraising and we have major gift donors  Where do those major gift donors come from?  The need to practice bottom-up fundraising Lawrence Henze| Page #13 © 2010 Blackbaud
  14. 14. Turning One-Time Donors Into Major Gift Prospects A Commitment to Change  The pursuit of more donors is not necessarily compatible with the goal to maximize gift support  In fact, these goals may be conflicting  Are you willing to change a philosophy that focuses on donor acquisition?  Taking control of your annual fund may increase the likelihood of disaster donor retention AND major donor development  If you solicit more than you thank and steward you are not creating a favorable major giving environment Lawrence Henze| Page #14 © 2010 Blackbaud
  15. 15. A Commitment to Research: Turning One-Time Donors Into Major Gift Prospects
  16. 16. Turning One-Time Donors Into Major Gift Prospects A Commitment to Research  Assumption: you have retained and/or converted past disaster donors in the past  What do you know about these individuals – have you attempted to distinguish the characteristics of retained disaster donors to those who quickly lapse? This is the starting point for understanding loyal, transitional and major donors  Don’t be concerned about the time it takes to do the analysis, or, in other words, do not rush to solicit again Lawrence Henze| Page #16 © 2010 Blackbaud
  17. 17. Turning One-Time Donors Into Major Gift Prospects A Commitment to Research  Quick analyses based on data  Attempt to distinguish these donors by: • Zip code or SCF (sectional center facility, first three numbers of zip code) • Time lapse between first and second gift • Initial gift amount • Package that yielded second gift  So, if you get donors that match these simple characteristics, you may identify these prospects for different stewardship and solicitation strategies Lawrence Henze| Page #17 © 2010 Blackbaud
  18. 18. Turning One-Time Donors Into Major Gift Prospects A Commitment to Research  Higher level investigations  Identify major or mid-level disaster donors in your database Donors with a first gift coming in response to disaster relief and subsequent giving rising to mid or major level  If this number is really small, identify major or mid-level donors from any source Lawrence Henze| Page #18 © 2010 Blackbaud
  19. 19. Turning One-Time Donors Into Major Gift Prospects Research – Past Giving Trends  First define major/mid-level giving to your organization  It is important that the amount is real to YOUR organization, not what you want it to be – base the analysis on what your reality is  So, for purposes of discussion, let’s assume that it is $1000-$5000  Let’s look for the number of years donors have contributed prior to reaching “mid-level”  Plot and analyze the results Lawrence Henze| Page #19 © 2010 Blackbaud
  20. 20. Turning One-Time Donors Into Major Gift Prospects Research: Major or Mid-Level Giving Analysis Years of Giving 4 Number of Mid-Level Donors 3 2 1 0 2 5 6 7 8 9 10 11 18 Years of Giving Lawrence Henze| Page #20 © 2010 Blackbaud
  21. 21. Turning One-Time Donors Into Major Gift Prospects Research: What Did We Learn?  Findings For example, these donors make an average of 9 annual gifts prior to reaching major donor status Establish a threshold, such as 6 annual gifts, to identify potential mid- level prospects Change stewardship efforts to cultivate better relationships with these prospects at earlier stage Personal thank you and cultivation program Lawrence Henze| Page #21 © 2010 Blackbaud
  22. 22. Turning One-Time Donors Into Major Gift Prospects Research: High-End Analysis Through External Data  Data to append to your file: Census Cluster data • Equifax Niche data • Acxiom’s PersonicX • Nielsen’s PRIZM Wealth Summarized credit data Lawrence Henze| Page #22 © 2010 Blackbaud
  23. 23. Turning One-Time Donors Into Major Gift Prospects Research: Donor Profiling with Niche Clusters  Household level clusters  http://www.equifax.com/consumer/marketing/en_us  Group people by life stages 26 Niches ranging from the young and wealthy "Already Affluent" Niche to the least prosperous "Zero Mobility" Niche, these clusters provide a picture of your prospects and donors and make it easier to craft the kind of targeted communications that make people feel like you are talking to them individually. Lawrence Henze| Page #23 © 2010 Blackbaud
  24. 24. Turning One-Time Donors Into Major Gift Prospects Research: Donor Profiling with Niche Clusters  Applications of cluster data Append cluster codes to your entire database Segment donors and non-donors by dominant clusters Analyze the distribution of codes • For example, 77% of retained disaster donors are described by 9 of the 26 clusters • 56% of retained disaster donors with mid-level giving to your organization come from 4 clusters • 65% of the initial donors not retained are described by 7 separate clusters • These results suggest different strategies Lawrence Henze| Page #24 © 2010 Blackbaud
  25. 25. Turning One-Time Donors Into Major Gift Prospects Donor Profiling with Niche Clusters – Drilling Deeper  Further application of cluster data Determine solicitation frequency or aggressiveness by cluster performance Craft messages by cluster Use clusters to segment responders by channel: • Direct mail • Telephone • Email • Personal solicitation Lawrence Henze| Page #25 © 2010 Blackbaud
  26. 26. Turning One-Time Donors Into Major Gift Prospects Research: Predictive Modeling and Segmentation  Accurate and reliable methodology for segmentation of prospects by likelihood and ability to give  Scores based on characteristics of current and past donors  Build a model on disaster donors who became mid-level or major donors  Score new disaster donors against the models  Concentrate high-end stewardship and cultivation activities on new donors with highest likelihood scores Lawrence Henze| Page #26 © 2010 Blackbaud
  27. 27. Turning One-Time Donors Into Major Gift Prospects Research – Modeling Output Lawrence Henze| Page #27 © 2010 Blackbaud
  28. 28. Turning One-Time Donors Into Major Gift Prospects Contact information: Lawrence Henze, 843-991-9921 lawrence.henze@blackbaud.com Link to Blackbaud white papers: http://www.blackbaud.com/company/resources/whitepapers/whitepapers.as px Lawrence Henze| Page #28 © 2010 Blackbaud
  29. 29. Turning One-Time Donors Into Major Gift Prospects New Book Published on April 13 on Amazon.com http://www.amazon.com/dp/0470539569/ Lawrence Henze| Page #29 © 2010 Blackbaud
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