The Future of Fundraising: 3 Key Changes to Make Now
MEET THE AUTHOR
Melissa Wyers | Executive Director
Melissa is widely respected as one of the top practitioners in the nonprofit fundraising and marketing world. She brings more than 20 years of experience helping nonprofits increase their revenue and build their supporter base. For the last 9 years, she was the owner and President of Breakthrough Strategies, a fundraising, marketing and communications agency developing multi-channel programs for organizations like National Geographic, Heifer International, and the World Food Program.
Fundraisers’ work is rapidly changing, expanding, and evolving but your teams, resources, and budget aren’t necessarily growing. So what do you need to do to adapt to the future?
One of the biggest changes—and biggest opportunities—happening right now in fundraising is the big demographic shift. For most nonprofits, your largest and most generous group of donors—Baby Boomers plus the last of the Greatest Generation—are exiting their prime giving years. Meanwhile, Gen X is entering their prime giving years, with Millennials slated to come into their own about a decade later. Gen X will likely be just as generous as prior generations, but their cohort is smaller than the Baby Boomer cohort, meaning development teams will simply need to fundraise the same amount or more from a smaller pool of donors.
This means that right now, fundraisers need to focus on retention, increasing donor value, and engaging supporters across more complex paths of engagement—sort of like guiding them away from a linear “ladder of engagement” and toward a multi-path “jungle gym of engagement.” Fundraisers routing donors along the many available paths of engagement will now have a half-dozen semi-linear jobs that you need to manage seamlessly in order to successfully steward the right donors along the right paths, and fund your mission year after year.
This guide will explain the changes fundraisers need to make now in order to adapt their strategy in 3 key areas—optimizing with predictability, efficiency with automation, and personalized segmentation—and put these principles into action with multi-channel programs.
Takeaway: When you’re navigating fundraising strategy changes at your nonprofit, you need the right platform to support your evolution—one that can easily adapt and grow as your organization’s work evolves.
Future Fundraising Key #1
Optimizing with Predictability
Because the donor pool demographics are changing and the donor “ladder of engagement” is evolving into a “jungle gym of engagement,” fundraising will now need to focus on retention and increasing donor value while keeping donors engaged along the unique paths that are right for them. That means the first key area where fundraising must change is optimizing your donors’ journeys with predictability.
Fundraisers need data they can act on to help them identify who is ready to give, when those supporters will be ready to make a commitment, and where to make your ask. The future of effective fundraising will rely on taking existing models and segmentation practices—which fundraisers have historically used successfully—to the next level with predictive analytics technology. The result? More targeted data, more accurate supporter scoring, and more funds raised for your mission.
Most nonprofits are already in the business of doing manual predictions—you likely use the data available (such as HPC and MRC) to predict what a donor might give in the future, for instance. With AI and machine learning-powered predictive analytics solutions, nonprofits now have the ability to analyze huge amounts of donor data and produce highly optimized predictions and recommendations for effective donor outreach. The time factor is a differentiator here: by feeding scores and behavioral data into algorithms, we can predict not only what supporters are likely to do next, but when they are likely to do it. These predictions are even more reliable when you’re operating in a unified or highly-integrated system: when you can know a supporter in their full glory, your system is documenting every step they take in support of your mission, which then feeds into your predictive analytics to improve your fundraising strategy’s accuracy.
Not only do fundraisers need predictive analytics to access that information, but they need access to predictive information that updates in real time. In the past, fundraisers would send their donor files out to get scored once or twice a year, or maybe even quarterly. In the future, fundraisers will need donor scores that are accurate every day.
Optimized Ask Amounts with Predictive Analytics
EveryAction clients have already seen some pretty incredible fundraising results with predictive analytics. Habitat for Humanity of Omaha and SOME (So Others Might Eat) both increased their revenue with Optimized Ask Amounts—read their full case studies to learn more.
Daily scoring means that your donor data will be more up-to-date—and therefore more actionable—much more often. Fundraisers can use that information not just to say, “Susan Smith is likely to become a sustainer,” but actually, “Susan Smith is likely to become a sustainer right now, so we need to reach out to her.” The main outcome from changing the way you use predictive analytics is that fundraisers will be able to use more accurate data to send more targeted messages—and the way you’ll successfully send those messages is with automation.
Takeaway: With the power of predictive analytics, your platform can give you the real-time data you need to meet your goals without taking more staff hours
Future Fundraising Key #2
Automation for Efficiency
Once fundraisers are equipped with accurate data from predictive analytics, the next step is putting it into action by automating messages to steward supporters along that multi-directional donor journey we talked about before. This will help you to fundraise as efficiently and successfully as possible.
In this new view of the donor journey, automation is what takes your fundraising from fundraiser-centric to donor-centric. In the past, you may have begun a fundraising campaign by saying, “it's July, so it’s time for the sustainer invite, because this is when we always do the sustainer invite.” Moving forward, fundraisers will need to make data-informed decisions about the right time to make the right ask of the right supporter, so instead you’ll say, “it's July. Susan’s predictive analytics indicate she has a really high score and is likely to become a sustainer, so we need to ask her this month.” Automation is the way you’ll deploy that right message to that right supporter, at the time that’s right for them.
Some fundraisers have experience using automation in limited ways—for example, many organizations currently run an automated welcome email series and an automated lapsed credit card email series. However, fundraisers risk leaving money on the table if they don’t evolve to use more automation that takes programs across channels. In the future, automation won’t be limited to email or online channels—it will expand to include channels like direct mail, telemarketing, events, volunteer management, and other forms of engagement, on top of everything in digital and on social.
This is a very different process than many fundraisers have used in the past. Perhaps, for example, your nonprofit always historically did one kind of messaging to your whole donor file at a specific time of year, like back-to-school messaging. Now that you have access to more accurate predictability-driven data and you can send out more automated messages with less effort, many fundraisers can optimize processes by testing back-to-school messaging and only choosing to send it to supporters who respond. That efficiency frees you up to target your non-responders with different messaging, and you can measure those results and keep improving upon them.
Moving forward, fundraisers need to adapt to the fact that most of your “doormat donors” are living lives across channels. This means to reach them, you’ll need a system that you can set up with automations to run independently across channels. It should empower you to collect data, interpret it with predictive analytics, and identify triggers for the right automations to run at the right time. But it can’t stop there: next, your system has to document which messages have and haven’t elicited supporter responses. That way, you can test messages with greater accuracy, and more quickly identify the types of messaging that actually help you successfully raise funds for your mission.
Takeaway: your path to executing a robust automation strategy lies in a system that can take in and manage all of your data. The end result? You become the brains of your fundraising operations, and your system does the heavy lifting for you.
Future Fundraising Key #3
Personalization and Targeting
Fundraisers who are actively adapting their work for the future need to make sure their system is running automated messages to the right supporters at the right time—but to be sure those messages are actually resonating, fundraisers need strong personalization and targeting practices.
It’s not news that the commercial world does personalization extremely well. Nonprofits might think we don’t need to worry about competition from corporations when it comes to our donors, but that’s actually not 100 percent true: although your purpose is very different, you're often not competing with other nonprofits for donors, you're competing for their attention with a lot of online marketers—and the corporate world has some good ones.
One major difference between you and a corporation, of course, is internal motivation. Most of your donors are giving to you because they share your values or are committed to your cause—there's emotion there. Presumably, people don’t experience that same values-based commitment to big corporations, and yet they use their buyers’ identities and choices in that highly personalized way because they know it works. Going forward, nonprofits need to understand and reflect back your donors’ identities and choices as well as the commercial world understands their buyers.
When you are able to create and reflect back a highly personalized view of your donors, you can funnel those efforts into your segmenting and targeting—that’s what enables you to send them messages that resonate deeply. To execute a strategy like that with a high level of efficiency and accuracy, fundraisers need to be able to see a true 360-degree view of their supporters. A highly-integrated or unified system is a powerful way to support that level of visibility into your supporters, since it gives you access to the predictive analytics and cross-channel data that shows you everything people are doing to support you—and that knowledge is what ultimately fuels your ability to segment and target your supporters accurately and efficiently.
Nonprofits need to accomplish more and more without the same resources as multinational corporations, so what will help you achieve your personalization and targeting goals will be a platform that lets you collect that personalized information, and then easily reflect it back to your supporters. Optimized Ask strings are a clear example of what personalization will look like in the future, since they call on that predictive analytics technology we talked about to make a tailored ask of each supporter. Personalization can even appear in straightforward tactics like prefilled forms, which we’ve found actually convert at a rate nine times higher than blank forms. Using data to reference your donors’ pasts with you can help you keep building relationships and raising more for your mission.
Takeaway: building strong connections with your donors means sending highly relevant messages based on information you’ve collected about them—and your platform needs to help you meet those personalization and targeting goals.