The nonprofit industry has undergone significant transformations in recent years, from mobilizing support for emergency relief in 2020 to adapting to evolving donor behaviors in 2021 and beyond. Through it all, nonprofits have demonstrated resilience by exploring innovative strategies to attract and retain donors.

As we approach Q2, it’s crucial to remain adaptable and forward-thinking. Amy O’Connor, VP of Analytics and Donor Insights at Data Axle Nonprofit, has identified 3 key trends expected to shape the landscape for the rest of 2024 and recommendations on how you can leverage these trends to further your mission and fundraising goals.

1. Trend: Average gift size of new direct mail-acquired donors has significantly increased over time

We have observed double-digit growth of average inception gift size of direct mail (DM)- acquired, new-to-file donors compared to pre-pandemic baselines across a wide spectrum of our clients. Notably, gains in average gift were largely consistent across donors regardless of age, household income, or wealth ranges.

It’s imperative to be cognizant of changes in average gift size and also consider the impact and journeys of prospects who receive DM pieces and subsequently go online to give. Leaning into measurement of these behaviors and meeting donors where they are will help set up this year’s fundraising for success and cultivate donors for the long term.

Leverage cooperative data

The data that you need to stay aware of changing gift trends and capitalize on increasing average gift size is right at your fingertips.

Cooperative databases provide detailed access to donation-level data, and through these insights, you can pinpoint individuals who consistently give higher gift amounts. Data Axle’s cooperative databases, Apogee and DonorBase, are comprised of over 1,000 nonprofits and provide a comprehensive suite of advanced modeling and indicator flags to identify new and expanded donor behaviors, affinities, and gifting potential.

Utilizing this information in your acquisition mail campaigns enables targeted outreach to your most valuable prospects. Additionally, utilizing tools such as Data Axle’s Optimal Ask String– which builds a custom or tiered ask array using post-merge data layered with Apogee average gift data – can hone your fundraising appeals and ensure donation asks are tailored to that person’s giving potential.

2. Trend: Rebounding 1st-year donor retention rates

2022 was a notably weak year in the retention of new-to-file donors for many nonprofit organizations. In 2023, we saw retention rates rebound and approach pre-pandemic baselines. In fact, some of our clients saw 5-year high points in 2nd gift conversion rates of new-to-file donors in 2023. While growing new-to-file donor counts remain a challenge, the rebounding retention rates are a positive sign of improved pipeline health.

We’re working with clients to ensure the high volume of donors acquired during the year-end period of 2023 remains invested in their mission. We encourage a focus on personalization and omnichannel communications to keep donors engaged.

Maximize the value of your target audience 

The implementation of intelligent profiling and modeling techniques has proven to be highly successful in identifying donors with the highest lifetime value potential. How is this achievable? By having a target-ready model. Advanced modeling available through Apogee and DonorBase provides insights into the likelihood of your new and longstanding donors becoming sustainers, planned gift donors, donor-advised fund contributors, major gift givers, and more. With this information, nonprofits can tailor campaigns that are relevant and personalized, effectively engaging and increasing the value of existing donors.

Tools such as Apogee’s and DonorBase’s Audience Indicators can easily be appended to your house file or appended post-merge for additional acquisition selection, segmentation, retention, and reactivation of lapsed donors.

Take an omnichannel approach  

To enhance donor retention rates, it’s crucial to engage donors on their preferred platforms. And donors, like all of us, are increasingly online. As of December 2023, the average person spends 3 hours and 15 minutes on their phone every day, with 1 in 5 users spending more than 4.5 hours daily.¹

This means nonprofits need to reach users offline and online, or an omnichannel approach that speaks to an individual donor’s preferences.

Industry surveys, matchback studies, extensive testing, and attribution work emphasize that maintaining donor engagement requires multiple touches across various channels. We recommend reaching out to potential donors 7-12 times to maximize donation opportunities and taking advantage of the mix of channels to deliver your message and evolve your donor interactions.

3. Trend: A growing focus on web matchback

Matchback analysis is the process that connects online gifts to direct mail touches. This identifies direct mail prospects who received mail pieces and subsequently donated online. In 2024, the significance of matchback analysis will continue to grow, particularly in discerning donor behavior and preferred donation channels.

The integration of matchback analytics has become indispensable for organizations striving to navigate the dynamic landscape of fundraising and evaluate the full impact of their investments.

Understanding which and how many donors are receiving traditional direct mail and then proceeding to make an online contribution will only become more pivotal this year. Our team can help assess this type of attribution through our Matchback Analysis.

Seeing and acting on the synergy between offline and online channels and knowing how this behavior is changing empowers nonprofits to optimize their outreach efforts, tailoring engagement strategies to individual preferences. The ability to identify and analyze matchback data not only enhances donor segmentation but also facilitates personalized relationships, fostering a more connected and responsive donor base.

Conclusion

2024 is set to be an exciting year, full of growth opportunities for nonprofits who move with precision and utilize data to elevate their donor interactions and cultivation. Changing trends, such as higher average gift size paired with rebounding donor retention rates, point to 2024 as a dynamic fundraising year. And, we’ll continue to experience omnichannel engagement and measurement as the best-in-class approach to reach and inspire donors.

To stay ahead of the curve as we head into the heart of this year, it’s important to stay attuned to your data and leverage tools to make interpretation and actioning on that data easier.

Want to discuss some of your 2024 goals and how to make them a reality? We want to hear from you.

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