Tag Archives: Segmentation

Can Nonprofits Turn Previous Failures Into Future Success?

Listen to any conference speaker, self-help guru or tech entrepreneur and you are sure to hear about their failures. Of course, they are speaking because they turned their failures into lessons that helped them succeed. Can you imagine going to a funder and telling them that you had to close down your last nonprofit due to lack of money but this time you knew how to handle their 7-figure gift? Can nonprofits turn previous failures into future success? Of course, saying you have changed the way you run your organization is not enough. You need to “walk the walk as well as talk the talk.”

Show that you now have a strong case for giving and are only approaching the right people at the right time.
Prove you have learned your lesson by talking about your new and detailed focus on acknowledgements.
Demonstrate that you understand stewardship for each and every donor and each and every gift.

What are other areas that nonprofits ignore that can be turned around to prove success?

Donor Retention
Annual fund donor and prospect segmentation
Expanding/Developing a monthly giving program
Expanding/Developing a planned giving program
Only getting in touch with donors when it is time to ask for money
Goal setting and result monitoring
Missing signals that people want to get more involved in your organization
Talking about the nonprofit’s goals instead of the donor’s goals
Allowing board members to disrupt meetings and progress
Upgrading donors
Strategic Plan in place with development at the core
Ignoring donors who give smaller gifts
Running board meetings that are inefficient, ineffectual, and too long
Assuming that doing the same thing next year will get you better results

To some this list may seem overwhelming. To others, it will highlight areas on which to focus or tweak in the coming year. Either way, turning previously missed opportunities into growth and prosperity will sustain your nonprofit. And, it will be something positive to talk about to current and prospective funders. Showing that you are learning and growing is something everyone can get excited about. Please let us know if we can help you improve your nonprofit by emailing Abigail Harmon.

Assessing Your Nonprofit’s Donors and Prospects: Annual Fund Segmentation Strategies

Solicitation strategies start with assessing the current situation. Do you treat all your prospects and donors the same? Should you?

Now, more than ever, you should have a development plan for all prospects and a stewardship plan for all donors.

But, you should not plan on having the executive director “meet” with every donor. How can a nonprofit engage each prospect and donor when there are thousands? Annual fund segmentation.

Start annual fund segmentation by considering how they give.

Are they a Prospect or Donor
If a donor, are they
- Current
- Once-a-year Donor
- Monthly Donor
- Major donor
- mid-level donor
- mid-level donor you are trying to upgrade
- 10-year donor
- 25+ year donor
- first time donor
- LYBUNT
- PYBUNT
- Someone who gave to a
  - specific event
  - end-of-year mail or email campaign
  - other mail or email campaigns
  - sponsorship
  - special campaign donor
  - restricted gift donor
  - peer-to-peer campaign on behalf of a friend
  - also a volunteer
- If a prospect or a donor, are they also a
  - Recent graduate or services beneficiary
  - 10-year alumnus\a
  - 25-year alumnus\a

Additional key points to keep in mind include:

It costs 4.5 times as much for the nonprofit to find a new donor than retain one
Donors don’t usually give a major gift in the first year they give to a nonprofit. Cultivation and stewardship over years (3-5 years minimum) is what will get you to the point you can ask for a major gift. *This assumes they have the capacity and had been stewarded properly during the time since they made their first gift.
When you start accounting for lifetime giving, someone who gave $50/year for 20 years gave $1,000 to your nonprofit. How would you treat someone who gave $1,000?
Break it down specifically for your organization. Should:

major donors get more personalized interaction than other donors?
monthly donors get a different appeal than once-a-year donors?
PYBUNTS or LYBUNTS get the same letter as new prospects?
members get the same email as non-members?
alumni get same event invitation as prospects?
parents get the same Facebook post as the students?
____ get the same ____ as _____ (fill this in for your nonprofit)

Each organization will have its own set of segmentations.

And contrary to popular belief, segmentation was not created to give you more work. Instead, it gives you more directed work. And a path to raising more money (which is the point, isn’t it?)

It may seem easier to send the same fundraising letter to the 1000+ people on your mailing list and move on. But what are you moving on to? If you rely on your annual fund to support your organization, this must be a priority for your development team. Even if it is a team of one.