For a few years, the overarching narrative for annual giving in larger training fundraising has been the identical: We’re getting greater items from fewer donors.
I hear myself repeating one thing comparable after I host an annual webinar on rising information developments for larger ed annual giving packages. With my co-host, Brian Kish, we pour over information from Blackbaud’s donorCentrics® and Fundraiser Efficiency Administration™. And plainly it doesn’t matter what we do, there are fewer donors 12 months over 12 months. This monotonous narrative is inflicting fundraisers to be uninspired (slightly dejected, even) which isn’t serving our packages.
This 12 months, we felt it was necessary for us to start out a dialog with fundraisers—particularly annual giving professionals—about how we inform our annual giving story to stakeholders, and specifically to our bosses. Right here’s what we propose: We have to begin rethinking annual giving metrics to create a brand new storyline about fundraising for larger training.
“Fewer Donors” Is Merely the Prologue to the Storyline
If the particular information is just subtly totally different year-over-year, perhaps that’s not the total story. Possibly the story lies in how we measure success, how we enhance the well being of our annual giving packages. Possibly we have to focus our consideration on narrower metrics. This can present higher leads to our present reporting and it’ll drive more healthy outcomes as we transfer ahead.
This isn’t about making ourselves (and our bosses) really feel higher by weaving a rosier account than the numbers help. That is about wanting on the numbers in a brand new method. It’s about reshaping the redundant story of “fewer donors” right into a compelling account of how a scrappy larger ed annual giving workforce can flip the tide on establishment fundraising.
Fluff Donors May Be Affecting Your Narrative
As an alternative of assuming that decrease donor counts are all the time dangerous, let’s take into account a unique chance: Greater donor counts in years previous may need been traditionally padded with “fluff” donors who is perhaps artificially inflating donor counts. Listed here are two explanations.
- Doubtful alumni help: Whereas we not want to fret ourselves with the now-retired U.S. Information & World Report metric of alumni participation, the impression of this rating indicator goes to point out in our information for years. The unique spirit of that measure made sense: Our alumni help us! However having it as a rating measurement pushed packages within the path of gimmicks for participation factors. Donor counts had been larger, however it wasn’t a measure of donors with true philanthropic intent.
I consider it as equal to impulse shopping for on the grocery retailer. Even when I’m procuring strictly for precedence objects, staples like eggs and bread, there are objects I toss in my cart as a result of they catch my eye within the second: sweet bars, coconut lip balm, and so on. In the identical method, the stress of alumni participation objectives previously stuffed our information with a bunch of “within the second” donors, not the “staples.” If certainly one of our campaigns occurred to catch an alumnus’ eye on a day after they felt they might give, they did. We’d catch their philanthropic eye once more someday, however it isn’t conscious conduct on their half and it’s a not a strategic method to alumni fundraising on our half. - Trendy direct advertising and marketing strategies: The expansion in nonprofits (there are almost 2 million nonprofits vying for donor consideration and {dollars}) and the sophistication of our direct advertising and marketing efforts is forcing even lower-level donors to make extra intentional philanthropic selections. This will cut back donor counts.
I all the time use my mother and father for instance: If they’d $100 to offer philanthropically, 20 years in the past they might have given $5 to twenty organizations. Consequently, they acquired their names and addresses on a number of organizations’ mailing lists. These mailing lists have been bought and handed round. Now, 20 years of innovation in direct advertising and marketing later, their mailbox and inbox are full of solicitations.
So, they have to make selections now. As an alternative of giving to each veteran’s group that asks them for a contribution, they’ve chosen one. And that one will get an even bigger reward. Similar with most cancers analysis organizations: They select only one. Consequently, they’re now lapsed donors on many organizations’ lists, however they’re higher-level (and retained) donors on the chosen few.
How Can a $100 Reward Change Your Annual Giving Storyline?
If we enable for the speculation that donor counts of yore had been inflated as a result of we had been chasing amount, it begs us to contemplate the “high quality” of donors. What makes a high quality donor and the way can we measure it? As a place to begin, it will be ultimate to know which donors take into account our group certainly one of their prime philanthropic priorities.
After which there may be capability. Since donors have totally different capacities, it’s difficult to contemplate reward threshold as a measure. For instance, there is perhaps a donor making a $25 reward that’s their largest reward that 12 months. Conversely, there is perhaps a $10K donor for whom $1K is a small reward relative to their different philanthropy.
Even so, reward thresholds can function gauge for donors who may transfer up the pipeline. Knowledge from the Fundraiser Efficiency Administration group means that the median quantity of an annual reward is $100. This implies half of annual items are decrease than that and half are larger. If we deal with donors at $100 and above, we’re specializing in these more than likely to retain and people more than likely to maneuver up the pipeline: 23% of small donors ($101-$500) are retained in comparison with solely 10% of micro-donors ($1-$100) and, in accordance with the Fundraising Effectiveness Survey for the primary quarter of 2024, retention will increase as reward dimension will increase.
*Supply of all charts: 2023 donorCentrics Annual Report on Greater Schooling Alumni Giving
Which leads us again to utilizing the very information developments now we have been struggling towards to inform a unique (extra helpful) annual giving story. We advocate you start utilizing new metrics to report on donors assuming we’re in settlement on the next two factors:
- Not all donors are of the identical “high quality”
- Selecting a giving threshold like $100 can function a gauge for retention and improve
Agreed? Good! We particularly advocate that you simply report on metrics that give extra focus to high quality donors, concentrating on the next information factors:
- Variety of annual giving donors at $100 and better
- Annual giving donor retention of donors giving $100 and better
- Measure $100 and better donors who keep at that reward stage
- Measure those that downgrade (however nonetheless give)
- Reward band migration: Are we feeding the pipeline?
Your Annual Donors Are the Heroes of Your Story
As you start to emphasise “atypical” annual giving information factors, is there nonetheless worth in reporting on the classics? Completely: Tried-and-true information helps you present a extra balanced narrative, so hold normal metrics in thoughts, too:
- Quantity of total annual giving {dollars}
- Variety of total annual giving donors
- General annual giving retention price
This method isn’t simply in regards to the metrics. It’s about how we use the metrics to inform the annual giving story. Vice presidents of development could not respect the nuance and worth of annual giving. They may not understand the story hidden within the information—a very heroic story of supporters who give what they’ll in service to your faculty. They could solely discover that total donor counts are down. And that may trigger angst.
When you as an AG skilled begin to spotlight the donor depend of high quality donors giving $100 and extra, it’s going to possible calm their angst (and yours), and also you’ll start rewriting the annual giving storyline with a greater, brighter ending.
