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...

Our Top 5 Most Popular Blog Posts of 2015

As we get ready to ring in the new year, we wanted to take a moment to thank you for reading, sharing and commenting on our blog posts. We hope you were able to use a few of our analytical insights to win, lift and keep your donors and supporters. This year, our most popular posts focused on win: the number and age of new donors that your organization should be acquired, lift: using life expectancy to calculate long term value and keep: engaging donors through online surveys. In case you missed any of these posts, here’s the links to our top 5 blogs of 2015: 5.    How Many New Donors Should I Acquire This Year? 4.     The Buzz – From the DMA Nonprofit Conference 3.     The Age of Acquisition 2.     Should you conduct your own survey? If you have to ask, then no. 1.     LTV...

The Force Awakens?

I’ll be darned. Direct mail acquisition seems to be making a comeback. OK, perhaps not to the degree of a Star Wars $250MM opening weekend comeback. But as I am reviewing recent acquisition (and reactivation of deeply lapsed donors) results, I was pleasantly surprised to see that new donor (and reactivated donor) counts aren’t falling. Even better news is that retention of Second Year donors are improving for the first time since Mark Hamill’s last film any of us can recall seeing (which any fan would know is the 1978 film Corvette Summer). The question is whether this comeback will last, or is it a momentary pause in direct mail’s inevitable...

A Surprising Trend in Fundraising

Any of us who have studied donor behavior can tell you that your best prospect for a sustainer or monthly pledge donor is someone who has been on your file for several years and has averaged 3 or more gifts a year. And the best recruitment should be done in January. Or is it? This year we have studied pledge conversion for several different files, and a very different narrative than the one above is emerging. For both of these organizations, which have mature files built on direct mail, the most likely convert to a pledge program was a single-gift donor who has been on the file a year or less. This is actually exciting news. This means organizations can (and should) start recruiting new donors to their pledge programs right away. But not in January. For most organizations, they are pulling the select for the January pledge recruitment long before the majority of the fall acquired donors are on the database. I know it may sound crazy, but we recommend waiting to send your pledge recruitment package (supported by TM) in February or March. You want to hit those new donors ASAP. You’re...

Marketing / Anti-Marketing

This blog is a little different. Sometimes, even among us, we don’t agree on things. Here’s one example. Bill: If you ask 10 people to define marketing in the nonprofit space, chances are, you will get 10 different answers. Here’s the one answer I like, paraphrased from my marketing professor Dr. Bob Colby at Northern Arizona University: Marketing is finding offers that donors want to give to. In other words, offers should not be static. We should constantly be asking donors what they want to give to and adjust our programs to deliver what the donor wants. Far too often when we are doing offer development research for clients, and the immediate response to any new offer is, “We can’t use that offer. We’d have to change our programs.” Bingo. That’s not a marketing attitude. That’s an anti-marketing attitude that will lead an organization down the path of irrelevancy. Sumarie: Well, that’s very interesting and I don’t agree. When I worked at CARE – through testing – we knew that donors responded best to simple, straight-forward “feed a child”-type appeals. While occasionally programs would require that children are given nutritious food, most often the best way to help a child was to provide the parents with training and agricultural tools to provide ongoing sustenance to their families, and hopefully to make a living, too. A negative example of nonprofits changing their programs to meet a donor’s whim is when a major donor left a substantial bequest to a number of nonprofits. The donation was earmarked for programs that would change the core focus of the nonprofits away from social...

LTV SchmeLTV

If there is one metric our industry is fixated upon, it’s LTV (long-term value). And, like so many other things, though it started out as such a good idea, it is in serious need of a tune-up. Now don’t get me started about the 7-ways to Wednesday that LTV is calculated. You’d think we would have come up with standard measurement for LTV. My problem is our industry has blindly assessed the same LTV to a donor (usual by channel acquired) while disregarding the most critical driver to LTV . . . LIFE EXPECTANCY. We did a study for one of our clients on their new donors acquired last fall. The average age for a direct mail acquired donor was 75-years old. According to life expectancy tables, a 75-year old’s life expectancy is 11 years. Compare that to a life expectancy of 30-years for a 50-year old. Without taking life expectancy into consideration and assuming all donors’ LTVs are equal, we avoid going after younger donors because they are “too expensive” to acquire than are older donors. Yet, when you calculate life expectancy into the equation, the numbers show you can actually afford to spend more acquiring younger donors because the LTV is actually much higher. If you aren’t using life expectancy when you are calculating your LTVs, you might be making big mistakes in your acquisition...