Epsilon recently released a study that found that for the past 12 months (ending June 30, 2019), the nonprofit industry’s gross revenue declined 5% when compared to the previous 12 months. The study also noted that the number of 12-month donors dropped by 8% this past year. While the number of donors has been declining, the donors who remain active are somewhat offsetting this; they have been giving more frequently—3% more than last year—as well as gifting higher amounts. The Fundraising Effectiveness Project’s Q2 report supports these metrics.
So what does this mean for your organization, and how can you maintain solid relationships with your donors?
- Do not abandon your long standing best practices to keep up with short term trends. Your donors are supporting you for a reason. Stay the course with your proven best practices, even if they don’t necessarily align with the most current fad.
- Continue to engage with your donors. You are in a relationship with your donors and that requires cultivating their ongoing interest before, during, and after receiving their gift. This can range from analyzing your donors’ engagement factors, segmenting communications to your donor bases, and personalizing donor recognition and appreciation efforts. Do not cut these important programs to fix budget gaps.
- Keep optimizing your spend. Make sure your dollars are going where it counts. With rising costs and shrinking files, you may find that mailing a few less mail pieces a year and building a robust digital engagement program may yield a better net return. Additionally, while all donors are important to your organization, some may prove to be more engaged with your core mission even if they donate the same amount as other donors. Invest in fundraising efforts that augment your more engaged donors.
- Always keep testing. New trends and ways of communicating with donors arise every day. Take the time to test out the trends that make sense for your organization, as it could end up significantly enhancing your relationships with your donors.
- Do not abandon acquisition. Declining budgets and increasing costs mean that every budget dollar needs to be spent in the most effective way possible. Many organizations cut acquisition to bolster short-term net revenue, ignoring the long-term effects. Beware of this temptation. This is an easy way to ensure that in 2-3 years, your donor file will be half of what it could have been. Furthermore, cutting acquisition for a single year can setback your revenue for the next 4-5 years.
The bottom line is that a decrease in donors across the industry does not have to equate to a decrease in your organization’s donations. By taking the time to strategize amidst this new climate, you can lay the foundation for continuing strong donor relationships and increasing your organization’s impact.
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