SVP, Data Axle Nonprofit
2020 was an atypical year for all industries – but especially nonprofits. As nonprofits worked to help those in need, many saw a surprising surge of charitable giving and new donors due to the pandemic and its aftermath. Now that life is [hopefully] headed to a new normal, nonprofits need to work hard to retain these new donors beyond ‘pandemic giving’. The average donor retention rate hovers between 40-45%.1 We asked Richard Geiger, Senior Vice President of Nonprofit Solutions at Data Axle, how nonprofits can spice up their channel mix to improve donor retention and keep those new donors invested in their cause.
Many nonprofits have acquired new donors in larger numbers as a result of the pandemic. Donors want to help their neighbors through difficult times and that’s an inspiring and uplifting silver lining.
What we’ve learned through experience is that donors acquired during an episodic emergency are hard to retain and convert into regular givers. However, there are sustainable and repeatable opportunities to engage these donors in the post-pandemic environment that nonprofits should uncover and pursue. Diversifying a nonprofit’s channel mix is a great way to start.
In order to increase donor retention rates, it’s important to meet donors where they are – and right now, they are online. The 2020 M+R benchmark report found that nonprofit audiences grew across all digital channels. Email list sizes were up by 3%, Twitter followers increased by 25%, and mobile audiences by 26%.2 Some nonprofits are intimidated by complex digital marketing strategies, especially since their audience has typically been responsive to direct mail marketing and historically there hasn’t been a need to heavily invest in digital.
We also know from industry surveys, match-back studies, lots of testing, and attribution work that it takes more than one touch and more than one channel to keep donors continuously engaged. I recommend touching potential donors 7-12 times to maximize donation opportunities. A data-driven retention approach utilizes channel, offer, and message in concert with one another, so it’s important to keep that in mind as you start to explore a multichannel strategy.
Direct mail continues to be a cornerstone for nonprofits, even as donors are increasingly active online. Direct mail is a key component to activate engagement. Our 2020 donor survey found that while 48% of donors prefer email for communication, direct mail continues to drive a healthy share of donations. Direct mail is second only to email as a preferred communication channel and 45% of donors over 60 give through direct mail. Some folks hear the words “multichannel” and “digital” and think they need to do away with direct mail altogether, but that’s not the case. Donor mailing lists should be enhanced with additional data, such as email addresses and phone numbers and then onboarded onto digital exchanges to be targeted with programmatic campaigns such as display, paid social, and retargeting. Data Axle’s donor database, Apogee, boasts information on billions of individual donations across millions of charitable individuals and households – complete with hundreds of demographic and psychographic attributes like age, location, interests, income, transactional history, and much more. This information can be easily used to give nonprofits a better idea of who their donors are and how to best reach them.
CTV and SMS are emerging channels that enable nonprofits to continue to provide mission-focused messaging to donors. Political organizations are using SMS (aka, texting) to disseminate information about their cause, alert voters of important dates, petitions, volunteering opportunities, etc. The 2020 elections in particular showed that people are really responsive to receiving information via SMS3 and it’s a great channel to reach younger donors.
Last year, we saw CTV usage skyrocket to 3B+ hours per week. Savvy nonprofits used this channel’s momentum to test a cross-channel approach for building awareness and fundraising. Early results from these tests look very positive with massive impact on fundraising, lifetime donor value, and donor engagement across new channels. For example, Data Axle recently assisted Defenders of Wildlife with creating a modeled prospecting audience and deploying their CTV campaign.
Defenders wanted the CTV campaign to be used in conjunction with digital ads to raise brand awareness, engage prospective donors, and boost fundraising for Q4, 2020. Using Data Axle’s donor database, Apogee, and custom modeling, we created an audience of potential donors who were likely to give online. To target them, we deployed a CTV ad to drive brand awareness and a display retargeting ad with similar creative and messaging. Both campaigns drove the audience to the Defenders’ website. The campaign generated an ROI of over 600% and the CTV ads had a Video Completion Rate (VCR) of 94% – which means that 94% of viewers watched the entire commercial.
While more adventurous nonprofits with a focus on demographically diverse donors will likely be early adopters of these channels, I am confident the rest will follow.
Prioritization is key when it comes to developing a sustainable plan for donor retention. Smart nonprofits should start by focusing on the donors who are most likely to become recurring supporters. The first step to arriving at this audience segment is to look at their existing highest-value donors – their behaviors, demographic makeup, psychographics, transactional history – and using those same attributes to identify look-alikes amongst new prospects. Smart profiling and modeling have shown to be effective in identifying the donors with and the highest prospective lifetime value.
Nonprofit organizations can improve their chances of retaining donors through multiple touches across diverse marketing channels. Developing an omnichannel retention strategy can be intimidating, but it’s key for growing one-time donors into lifelong supporters.
Richard brings a wealth of experience and leadership in selling and delivering strategy, analytics, business process and technology to large complex nonprofit organizations.