Fundraising Update

Welcome to Fundraising Update. This week, we learn how to raise more money with donor segmentation. Plus, a new report establishes a baseline for giving to LGBTQ+ organizations.

I’m Emily Haynes, senior reporter at the Chronicle of Philanthropy. If you have ideas, comments, or questions about this newsletter, please write me.

How to Tailor Your Outreach — and Raise More Money

Fundraisers need good donor data to run strong development programs. For the past month or so, your newsletter co-writer Rasheeda Childress and I have been calling around to experts, gathering details on the kinds of information fundraisers should collect about their donors and how to use it to build stronger relationships with their supporters. We’ll have more on that for you in July. Today, let’s dig into one effective way to use that donor data: segmentation.

The strategy involves organizing donors into segments based on shared traits or behavior and then tailoring messages to each group, my colleague Lisa Schohl reports. Getting this right takes good donor data, a smart strategy, and time. But the most important thing is to try, experts told her. Here are some tips for success with donor segmentation.

Randy Lyhus for The Chronicle

Create a Plan. To make the most of these efforts, build a yearlong strategy or at least look at a quarterly or six-month timeline, says Floyd Jones, director of community and partnerships at Givebutter, an online fundraising platform

“If you’re just doing a one-off thing, it’s not going to work,” he says. “Remember, you’re not just building another donor, you’re building a believer in your cause — and this is how you do it. You’re making a real relationship with somebody.”

That means thinking holistically about how you would want to be spoken to as a donor and creating a plan to do that consistently over time, he says.

Define your goal. For example, if you want to build community, not just expand your pool, you may want to segment supporters based on engagement, looking at data such as event attendance, survey participation, volunteering, or referrals to other donors.

Identify key segments. The Children’s Literacy Initiative, an educational and social-justice nonprofit in Philadelphia, uses Blackbaud Analytics, which combines the organization’s donor data with wealth data from outside sources to create supporter profiles and organize them into tiered groups.

For example, a group Blackbaud calls “Upwardly Mobile” comprises donors who are high earners and new to charitable giving, says Naimah Bilal, chief development officer at the Children’s Literacy Initiative. “They tend to be individuals that you want to pay attention to when they enter your organization because they have high potential to give at a major-gift level,” she says.

The nonprofit also determines where each person falls through conversations about related issues. They think of this work as “risk management,” too, she says, because understanding what donors know — or don’t — about their mission helps them make sure their communications address any gaps and keep supporters engaged and giving.

For more tips on donor segmentation, read Lisa’s full story.

Need to Know

0.13%

— Share of overall philanthropy given to LGBTQ+ organizations from 2015 to 2019

A new report on giving to LGBTQ+ organizations found they earn only a sliver of overall philanthropic dollars but they grew their giving faster than non-LGBTQ+ groups from 2015 to 2019. Donations to LGBTQ+ groups increased 46.3 percent, while contributions to non-LGBTQ+ nonprofits grew just 24.9 percent.

The findings come from Equitable Giving Lab, a research project of the Indiana University Lilly Family School of Philanthropy that digs into how philanthropy serves historically marginalized communities. This is the first effort to establish a baseline for individual, foundation, and corporate giving to the sector.

“This movement is grossly underfunded,” says Elise Colomer-Cheadle, director of development for OutRight International, a global LGBTIQ human-rights group. Colomer-Cheadle also served as a member of the advisory council for the report. “While we are seeing positive growth patterns, the resources pale in terms of the need,” she adds.

Compared with other groups, LGBTQ+ nonprofits receive less philanthropic support, on average, bring in less revenue, and have fewer assets and expenses, the report found. That’s common for nonprofits that serve marginalized communities, which tend to have few major donors and little if any fundraising infrastructure, says Una Osili, associate dean for research and international programs at the Indiana University Lilly Family School of Philanthropy.

Read more findings from the report in the full story.

Plus ...

• If Lisa’s story on donor segmentation piqued your interest in strategies to learn more from your donor data, I recommend watching this recording of a recent online event the Chronicle hosted about using data analysis to attract better donors.

  The panelists agreed that involving other departments — like communications, programs, or operations — is critical to using data to attract and retain members, which includes, for example, establishing priorities or data collection and storing information in a centralized place.

  “It’s about a mentality within the organization about sharing with each other,” says Mike Skiados, managing director of membership strategy and engagement at the American Institute of Architects. “This is not your data. This is not my data. This is not the chapter’s data,” says Skiados. “This is our data, and we are all going to use it together in a way to better move the organization forward.”

Advice and Opinion

• 6 Ways to Take Action Amid Economic Uncertainty: Leaders should analyze finances, collaborate when possible, and communicate clearly and frequently with stakeholders, among other steps to steady a nonprofit’s course through choppy economic waters.
• Bonuses Can Help Nonprofits Stretch Budgets and Retain Fundraisers: Workplace culture plays a crucial role in how well incentive compensation works to draw in potential hires.

What We’re Reading

This conversation among three public-media professionals gets at what a lot of fundraisers are focused on: finding new donors online. Kristen Muller, the chief content officer at Southern California Public Radio, interviews Celeste LeCompte, chief audience officer at Chicago Public Media, and Joan DiMicco, executive director of product at WBUR, Boston’s public radio station. Their conversation touches on how their organizations are pivoting fundraising away from on-air pledge drives and toward deeper engagement with people who get their news from their stations online. LeCompte, for example, discusses the collaboration needed among product, marketing, audience engagement, and data analytics teams to build a successful digital membership program. Their conversation has plenty more kernels of wisdom for fundraisers, and I hope you find it useful. (Medium)