How To: Donor Segmentation for End-of-year Fundraising

Fundraising professionals recognize that year-end fundraising is essential to raising support for their nonprofit missions. Donors are especially generous in December, and as much as 30% of all giving happens in this single month.

The reasons behind this surge vary. Some people donate more at year-end for tax advantages, while others are moved by religious holidays. It is important to understand your donors and what motivates their giving. This insight allows for the crafting of personalized messages targeting distinct donor groups.

A well-devised fundraising strategy typically encompasses clear and specific steps for an end-of-year campaign, central to which is personalized communication. Segmenting donors has consistently proven to enhance nonprofit support, making it a vital fundraising tactic. With its potential for high donations, the year-end appeal presents an ideal opportunity to employ donor segmentation.

Incorporating donor segmentation into components like the year-end appeal letter, donation pages, social media campaigns, and other end-of-year communications can dramatically influence prospective donors. This approach yields optimal results when nonprofits strategically harness data to pinpoint which high-end donor segments will have the most impact.

Crafting a compelling appeal letter that boasts personalized messages tailored to different donor groups and donation requests can drive significant results. And the best part? Achieving this doesn’t require an extensive time commitment. So, instead of feeling overwhelmed, leverage tools like your donor database and apps like AskGenius to streamline the process with personalized ask strings.

 

High Impact Donor Segmentation

Your fundraising team and board understand the concept of donor segmentation and its importance in year-end fundraising, but they are unsure where to start. There are many ways to divide up groups of donors.

Nonprofits can segment donors into groups based on years of giving, amount of giving, or last gift. Don’t let donor segmentation become daunting.

Start with these high-impact donor segments to increase end-of-year donations:

1. Major Gift Donors
2. LYBUNTS (Last Year but Unfortunately Not This)
3. SYBUNTS (Some Year but Unfortunately Not This)
4. First-time donors
5. Donors who typically give at the end of the year

First, identify the special donor groups. Then, create a personalized message for each group. Finally, use variable imprints to include the messages in the appeal letter. The mail house can help merge special variable imprint sections for different types of donors.

Remember, most of the copy in the fundraising letter will be the same for everyone, with just minor, personalized variations for high-impact donor segments. Use the mail merge tools to insert these variations to save time and printing costs.

Letting donors know you know who they are can help improve the donor relationship and improve your fundraising campaign. You might also include a call-out (also called a Johnson box) at the top of the letter.

For lapsed donors, you can build in additional messaging inviting them to give again and letting them know you miss them.

This can also be a unique paragraph thanking donors for their years of support or showing gratitude to those in a giving society.

Fundraisers often wonder if giving societies are worth the trouble. AskGenius recently did a webinar on that very topic. Check it out here: Do Giving Societies Work?

Spoiler alert: giving societies can help elevate generosity when done correctly. Giving societies don’t need to include fancy benefits for joining or require hosting big events. Just having names for them can motivate donors to give more.

Giving societies can play a pivotal role in amplifying generosity. For example, donors contributing just shy of a designated giving tier, like those donating $80, can be encouraged to elevate their contribution, entering a giving society that starts at $100.

 

Tell donors what they make possible with the year-end donations

Use the donor segments to thank donors for their kindness. Communicate to supporters what their last gift made possible. Ensure those who give know they are the story’s hero and what problem they helped solve.

The appeal letter helps donors understand what they make possible and lets the pledge card do the heavy lifting of asking. The pledge card should have a personalized ask string for most donors. The exception to this is one donor segment: major donors.

For major donors, you don’t want to cheapen the experience by presenting an ask string, but rather leave a blank line where they can write in the donation amount. Consider a special variation for major donors that says something like “as one of our most generous donors.”

Donation pages can also be customized for specific donor groups. The donation page for major gift donors should not include specific dollar amounts but rather let the donor write in the amount they want to give.

People like to feel appreciated, and calling out their generosity as one of the top donors can help increase giving. However, stating what donors gave last year can be tricky.

Sometimes, reminding the donor of their previous gift can anchor donors to give that specific amount again rather than increase their donation. You also must be sure that your data is clean. Clean data is an essential piece of donor management. Listing a gift wrong or giving credit to the wrong person is bad for donor relationships.

Don’t credit Mr. Smith if the gift was from only Mrs. Smith. Don’t thank Mr. and Mrs. Jones if the gift was a memorial gift for Mrs. Jones, who passed away last year. Clean data is crucial in development work.

It is best to thank the donor for their generosity but leave out the reminder of their last gift amount. Be sure to ask for the specific gift amounts on the pledge card, not in the letter.

Strategies that work for all donor segments

By creating segments of donors, you can increase giving, but remember; some strategies work across all donor types. This includes writing a heartfelt letter using familiar language with a 13-14-point font that is easy to read.

Direct mail appeal letters should be 2-4 pages in length. The letter should tell a story that depicts the donor as the hero. Include a call-out box and a P.S. line with special donor messages at the end of the letter. These can be additional opportunities to customize based on donor segments.

All donors need to be thanked promptly. Create a special gratitude strategy for each donor segment. Include special thank you letters and phone calls for each donor group.

Staff members are not the only ones who can be involved in stewardship. Get your board of directors involved with creating thank-you notes and making thank-you phone calls.

Need more help with your year-end giving campaign?

For help with your nonprofit year-end campaign, download The Fundraiser’s Essential Guide to End-of-Year Giving today. This tested guide provides step-by-step guidelines for the best donor letters.

Donor segmentation can help increase donations this year-end. Take your segmentation strategy one step further by checking out AskGenius to set personalized ask strings for every donor.