This is the first in a series of three articles on How to Maximize Your Revenues for 2010. The second article will explain how to build on this foundation. The third article will detail how to find new prospects that look just like your best donors.

Research and Relationship Marketing

The Chronicle of Philanthropy, in a December 2009 article entitled “10 Emerging Forces,” laid down 10 mega challenges for the New Year.

I found the positive point of their story, “A Full-court Press for Modest Gifts,” to be the most intriguing – and it is a strategy that all nonprofits can implement, with just a bit of internal effort and not much money. The article explained that as charities face cutbacks in state aid as well as cutbacks in grants from foundations and corporations; they are turning more intently to individuals and focusing most seriously on small and medium-sized donations. Here is how you can make this a winning strategy for the New Year.

Step One – Research must be the driving force for your next donor marketing effort. We recommend that you know exactly where your revenue is coming from. This means more than simply looking at the revenue profit and loss statement. You must break out the revenue in detail.

To do this, the first pass should include all revenue from all sources. Use a pyramid concept and divide the pyramid in half. The half to the right represents current to 200-day revenue; the half to the left represents 200 days and longer since the last receipt of funds.

Next, break this up into four tiers. The top tier is Major Gifts, Bequests and Endowments; one tier down is Special Campaigns, Individual, Corporation and Foundations; the third tier is Government, City, State or Federal, and the last tier is Special Events, Membership, Direct Mail and Annual Campaign. Now, armed with this specific information, you can begin to look over each category for weakness and opportunities for this campaign year.

Step Two – With the end-of-the-year campaigns completed, you can now begin focusing on the campaigns of 2010. You will want to find new ways to reconnect with the people who just gave to your cause. Or maybe your research showed that some of the usual donors didn’t give this year; so you need to find a way to bring them back into the fold. Whatever your situation, here are the best practices that you can put into play to keep donors – past and present – engaged.

Identify

1. Do your homework and use what you know. Remember, the people who you are targeting are previous donors, not cold prospects. This means you already have information about these individuals. Sift through your donor data and group individuals based on different criteria (e.g., the people who gave at the end of last year; the individuals who always give at an annual event, and the people who did not give at all this year).
2. Create a matrix using Microsoft Access or Excel. Starting on the “X” axis is the value of the donation and the “Y” axis is the frequency of giving. The result of this query, when put into a scatter-gram, will deliver an excellent picture of those who you must communicate with on a frequent basis, and those with the greatest potential.
3. Create engagement or re-engagement strategies for each group. Once you have categorized your donors in groups, then you can begin to develop communications strategies based on their past interactions.

Communicate

1. Build a totally different communication matrix. To re-engage or to engage members of each group, consider creating a targeted message that presents non-financial ways for them to stay actively involved with your organization.
2. Now, it’s time to enter into Donor Relationship Marketing. Tailor your message to be consistent with what potential the donor represents, and perhaps what interested them in your organization, if this information exists. If you don’t have specific donor feedbacks, remind them about volunteer opportunities, and suggest events they could attend, and ask them for the names of friends and/or family members who might be interested in helping.

Build Interest

1. Show that you value your relationship with each donor by offering a few simple ways for them to provide you with their input. For instance, send them a survey or post a quiz on your website. Both options will get these individuals re-engaged in a way that will also benefit your organization. If an incentive might boost participation, offer them a free ticket to an upcoming gala or event.
2. Finding out each donor’s preferred method of communication may be difficult; some prefer physical direct mail, some like email, and some would rather engage in the social networking sites. But it’s worth knowing, so that you can make it a part of your campaign and reach out to each prospect in the communication medium of their choice.
3. Keep track of the results from each campaign and of the way each prospective donor wants to communicate with your organization. Remember, you are building a donor relationship one message at a time. Think of this as a full 12 — to—18-month effort. Keep in mind that a single contact with your donor prospects will NOT produce the results that multiple contacts will nor produce the education that will come from a more sophisticated effort.

The end goal is to naturally generate more responses, build more relationships and to receive more donor dollars than ever before. To do this, you must identity, communicate, build interest and inspire the audience – show them that your organization is well managed and understands how to communicate with its donors.

Robert McKim MA, CISA, CIPP
McKim Nonprofit Consulting