For nonprofit organizations, nothing’s more important than moving the mission forward. Particularly for smaller organizations looking to grow their fundraising, attracting, cultivating, and retaining donors through successful outreach is a very important way for these nonprofits to build the support they need in order to make that mission-oriented progress. That means they need those outreach messages, and the overall supporter experience, to be as compelling as possible.
One key to compelling donor outreach is the practice of donor segmentation, or organizing supporters into relevant categories in your database as you gather information on them. Proper donor segmentation empowers busy nonprofits to send the right people the right messages using the right channels at the right times. This will give donors more meaningful interactions and keep them engaged.
Let’s discuss the benefits of segmenting donors and delve into some impactful strategies that your nonprofit can implement today. And if you’re looking for more ways to engage donors day after day and year after year, download our complete Beginner’s guide to fundraising campaigns for ways to put strong donor segmentation practices into action, 365 days a year!
What are the benefits of segmenting donors?
By learning how to segment donors effectively, your organization will make more informed decisions about your outreach and build donor relationships that can stand the test of time. While your ultimate goal may be to secure as much support from as many people as possible, the key to long-term success lies in cultivating more personalized connections with each donor. Segmenting donors allows you to send communications that are tailored to the individual preferences and interests of each recipient. This means that your nonprofit can:
- Save time and resources when sending messages to supporters.
- Include reasonable ask amounts when seeking gifts from donors.
- Suggest additional engagement opportunities that will resonate with each recipient.
Your donor database software should facilitate the process of segmenting donors and personalizing communications to each individual supporter. To maximize the benefits of segmentation, ensure that your database can keep track of basic information, like donor demographics, and offers custom fields for gathering specific data relevant to your nonprofit as well.
3 strategies for how to segment donors
While there are no one-size-fits-all rules for donor segmentation, there are a few tried-and-true ways your nonprofit can optimize the practice to generate the best possible results. Apply the following strategies across all of your marketing channels to send the most appealing and customized outreach to as many of your donors as possible.
Strategy 1: Review the different types of donors.
There is a lot of flexibility with how to segment donors, so first take stock of the different types of donors that your organization interacts with. Many organizations begin their segmentation journey using the RFM methodology: that’s sorting donors into groups by recency (how long ago was their latest gift?), frequency (how often do donors give to you?), and monetary value (are they a smaller-dollar or grassroots donors? A mid-level donor? A major donor?).
Some notable types of donors you can identify using those three criteria include:
- Monthly donors
- Major donors
- First-time donors
- Long-term donors
- Donors who donated “Last year but unfortunately not this year” (LYBUNTs)
- Donors who donated “Some years but unfortunately not this year (SYBUNTs)
Identifying donors by RFM is an example of using behavioral data to segment supporters — this means sorting donors into groups based on actions they’ve taken (or not taken) in the past. Segmenting SYBUNT and LYBUNT donors, in particular, can go a long way toward securing substantial support that continues over the course of many years. Many times, a personalized, thoughtful reminder can be all it takes to revitalize a relationship with a supporter.
For instance, if a donor made a contribution during last March, but not this March, your nonprofit can send a short note saying, “Last year at this time, you supported us with a generous gift of $100. Would you consider renewing your gift this year?”
Using different types of data to segment donors
Behavioral data isn’t the only way to segment donors, though. Demographic data can also help you segment donors and personalize your outreach to them. Here are some criteria you can use to segment donors using demographic data:
- Age group
- Location
- Family details, such as whether a donor is a parent
- Education
- Profession
Demographic data can be especially useful for personalizing messages to donors. For example, if you’re a state-wide nature conservation organization, you might sort donors into groups by county and realize your most engaged donors are clustered in some ZIP codes, while your least-engaged donors are clustered in others. To prompt less-engaged donors to make a gift and create urgency, you might send an ask saying something like, “we’re building a movement of nature lovers across every county in our state — become the first donor from your ZIP code to make a gift to our Save the Pollinators campaign, and forward this email to a neighbor!”
And, of course, combining behavioral and demographic data can help you get even more out of your donor appeals. With the right data, you can increase the level of detail in the asks you send donors. This can help you give them a better and more personalized experience, show them you know them, and encourage them to keep supporting your work.
Strategy 2: Create donor segments that align with your nonprofit’s goals.
Your donor segments will be unique to your nonprofit, as how you segment donors depends on your specific priorities and resources. For instance, you may organize donors in your database based on the following categories:
- Average gift size (such as grassroots, mid-level, or major)
- Giving frequency
- Age or age group (such as young or rising donors)
- Location
- Volunteer history
- Reason for giving
- Interests related to your nonprofit or purpose
These can all be valuable segments, but be sure to spend some time identifying categories that might be meaningful to your particular nonprofit. For example, do you have a large pool of donors who give annually during the same month? Create a segment for them and reach out right around the time of their habitual gift to help them keep their momentum going.
Pro tip: once you create definitions for your segments — such as the dollar value range for a mid-level gift or the age range for members of your young donors segment — keep them the same all throughout a campaign! Changing how you define a segment while a campaign is ongoing can make it difficult for you to measure your success using your technology.
Strategy 3: Diversify your segmented donor communications.
When determining how to segment donors, another significant factor to take into consideration is communication preferences. Your organization likely already interacts with supporters through:
- Mobile messaging
- Direct mail
- Social media
After you’ve crafted a personalized, relevant message to a donor, send it through their desired communication channel to ensure maximum engagement. For instance, some donors may be pleased with a phone call to acknowledge their gift alongside their receipt, while others may simply prefer a follow-up email thanking them for their support.
Keep in mind that donors will also have different preferences for how often you communicate with them, so use donor segmentation to respect these wishes as much as possible when you’re sending follow-ups and updates.
As you uncover donors’ communication preferences, such as whether they’re likelier to click through a message from you through email rather than mobile messaging or whether they only receive mail at a certain address during the winter, make sure to store those details in your donor database. This will help all the right people at your organization use their time wisely and make the best decisions for each donor.
Refining your donor segmentation efforts
Once you have these donor segmentation strategies up and running, measure and report on your results at regular intervals. As you learn from your supporter engagement results, you can refine your methods to make sure you’re continuously improving. This will allow you to maintain an organized and accurate database, gain insight into supporters’ behavior, and keep improving the experience you’re giving them. This will help you build the momentum you need to raise funds, power your work, and ultimately change the world for the better. Get started by making the most of your donor data and implementing segmentation today!
Want to learn more about how donor segmentation fits into a successful fundraising campaign? Grab this Beginner’s guide to fundraising campaigns for expert tips on the technology and techniques nonprofits need to put these practices into action every single day of the year.
