Calculate Your Nonprofit’s Market Penetration

Calculate Your Nonprofit’s Market Penetration

  I recently did some analysis for a group of local Human Service non-profits to see how many of the households in their different communities give. In other words, what is their Donor Penetration? Overall, for the 17 local nonprofits, 2.3% of the local households are Active (0-12 month) Donors. That doesn’t sound too bad until you consider that 97.7% of the local households are NOT donors. And, out of those 17 organizations, the percent of households who are giving ranges from a low of 0.9% for one local organization to a high of 4.3% for an organization in a different area. That’s an extremely wide range. I think this shows that for these very well-known organizations there is still a lot of opportunity in their communities to acquire or reactivate donors. But, it begs the question – Why aren’t people giving? In my experience it’s often been because most of the community just doesn’t realize there’s a need. I’ve been involved in several research studies where prospective donors say, “Yes, we know your organization”, and “Yes, we believe that you do good work”. But then they say “We just didn’t realize that you needed us to give.” They thought that the organization had it all covered. What percentage of those in your community or target audience are giving? Do they know that you need them to support your mission? Have you...
The Shift to Lift

The Shift to Lift

At Analytical Ones, we simplify all of our recommendations into three categories: Win (acquisition and reactivation); Lift (upgradation) and Keep (retention). If you study donor files, active donor counts peaked in 2008, at the cliff of the Great Recession. Though some organizations have stabilized their active file sizes, few organizations are able to surpass where they were in 2008. As I have reviewed our SGAs (Strategic Growth Analyses) over the past 8 years, our recommendations have been heavily weighted in the Win category. Organizations have consistently had challenges acquiring and reactivating donors. And despite a lot of effort and dollars targeted in this area, it’s not moving the needle. File sizes continue to decline. Keep rates have improved a bit over the last 8 years. But this isn’t because organizations are better at bonding with their donors. It’s more a file weighting composition thing. Since there are fewer new donors on file, the balance is tilted to Multi-Year donors which have better retention rates. Thus overall retention looks better. When it fact, they are relatively stable. The one area that has improved is Lift. Donors are giving bigger gifts. In fact, if you look at most files, in terms of revenue the improvement in average gift size has more than mitigated the decline in donor counts. Or in other words, revenue continues to grow while file sizes shrink. I think the conclusion here is though we can’t give up on winning new donors and reactivating old ones, more investment should be directed towards Lift strategies: Upgrading donors through either larger gifts, more frequent gifts, or both. This is the...