The Importance of Segmenting Your Donors

5786426902_1b9405e1a5_wYear-end fundraising time is here. I’ve already started receiving appeal letters and I know this is just the beginning. 

I get appeals from nonprofit organizations I don’t already support and many of these are generic and impersonal. This is annoying. But what’s even more annoying is receiving generic appeals from organizations I do support.

Maybe I’ve donated for at least five years. In many cases, I’m a monthly donor. Do these organizations recognize that? No, they don’t. I just receive a one-size-fits-all letter. 

This is a mistake. If you don’t segment your donors and send different letters to different types of donors, you’re telling them you don’t recognize them for who they are.

Do not send everyone the same letter. You don’t need to create 100 different types of letters. Four or five should be sufficient. Besides segmenting your appeal letters, you also need to segment your thank you letters. You need to segment your donor communication (newsletters, etc), too, but I’m only going to cover appeal and thank you letters in this post.

Your donors are getting tons of appeals right now, as we enter one of the busiest times of the year. Your appeal will stand out if it’s not the same old same old.

Here are a few different types of donor groups. Feel free to add more if that’s relevant. The more you can segment, the better. Investing in a good database will help you with this.

Current single gift donors

One of the biggest hurdles nonprofits face is ensuring first-time donors give a second time. If they keep giving after that, they’re showing their commitment to your organization. Don’t blow it by ignoring this.

An appeal letter to current single gift donors (Monthly donors get their own appeal. More on that below.) must acknowledge their past support. This is also good opportunity to ask for an upgrade. Many organizations don’t do this, but it’s a good way to increase your revenue. 

If these donors give again, they should get a handwritten note, phone call, or letter letting them know how much you appreciate their continued support. If they’ve upgraded their gift, acknowledge that, too.

Potential/new single gift donors

If you’re sending an appeal to someone who’s never donated to your nonprofit before, what is your connection to them? Are they volunteers, event attendees, or people on a list you just purchased?

The more you can establish a connection, the better chance you have of getting a donation.

The retention rate for first-time donors is abysmal. One of the reasons is poor communication. You can help boost your retention rate by making your new donors feel special.

New donors should get a handwritten note, phone call, or letter welcoming them as donors. Invite them to connect with you in other ways such as signing up for your newsletter, following you on social media, or volunteering.

Then a week or so later, send them a welcome packet by mail or email. Personalization is crucial with new donors.

Are We Sure An Automated Email Welcome Series For New Donors Is A Good Idea?

New monthly donors

Brand new donors who opt for monthly or other recurring donations get the same special thank you treatment mentioned above. Welcome them to your family of monthly donors. 

Current monthly donors

Your current monthly donors must get their own appeal that recognizes them as monthly donors. In this appeal, you can either ask them to upgrade their gift or give an additional year-end gift. Here’s an example from the Southern Poverty Law Center.

What’s In My Mailbox | How are you upgrading your monthly donors?

When your donors renew or upgrade their monthly gifts, they, of course, get a super fabulous thank you.

Current donors who become monthly donors

Your current donors who decide to become monthly donors are also showing their commitment to you. They get a handwritten note, phone call, or letter thanking them for their continued support and for joining your family of monthly donors. From now on they should get specialized appeals and other communication targeted to monthly donors. 

Segmenting your donors can pay off

You might be panicking because this type of segmentation sounds like extra work. But it will be worth it if you can raise additional revenue and boost your retention rate.

11 Ways To Segment Your Donors To Improve Your Fundraising

How to Effectively Segment Your Donors and Audiences 

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