Donor segmentation is the process of categorizing donors based on similar characteristics such as demographics and interests.
Nonprofits choose to segment donors for a variety of reasons. Sometimes it’s to send out targeted communications that may appeal to one group of donors over another. Other times it is because we want to know the right amount to ask for based on a donor’s current donation level.
Segmentation allows for fundraisers to know who their audience is and cater to their needs, and it comes in handy for email marketing.
How you decide to segment your donors depends on the needs of your organization. Let’s take a look at 11 ways that you can segment your donors to help make sure you are connecting with donors where they are.
1. How Your Donors Were Acquired
It is important to know where your donors came to you from so that you can tailor messaging and donation requests down the road. In fact, a lot of your donor outreach will depend on this information. Some common ways that nonprofits and other cause-based groups acquire donors include:
- Volunteers converted to donors
- Your website
- Social media
- In-person networking
- Direct mail
- Peer-to-peer fundraising
2. Size of Gift
You should know how much your donors give in order to determine how much you should ask for during the next campaign. Because of this, nonprofits often segment donors by their gift size.
In an ideal world, you would work to move your donors up the giving ladder based on their starting point. For example, you can separate donors giving under $100, $100-$249, $250+, and major gifts. Over time, fundraisers can work to increase donor’s gifts.
3. First Time Donor vs. Returning Donor
According to the Fundraising Effectiveness Project, 19% of first-time donors are retained compared to 63% of repeat donors. Therefore, your nonprofit should track first-time donors because they oftentimes need extra support and persuasion to give again as opposed to returning donors.
“Your nonprofit should track first-time donors because they oftentimes need extra support…” tweet this
4. Giving Frequency
Some donors will give every time they’re asked while others only consider gifts once or twice a year. Note the frequency of your donor’s gifts to send the right messages at the appropriate times.
5. Engagement Level
Does your donor give a gift and then drop off the radar for months, or do they connect and engage via social media, volunteer, or sign up for your email newsletter? Try segmenting your donors based on their engagement level with your organization. That way, you can work to move that donor along the donor engagement ladder.
“Try segmenting your donors based on their engagement level with your organization…” tweet this
Each generation is motivated by different fundraising techniques. For example, we know that Baby Boomers respond better to direct mail than Millennials, whereas Millennials are more likely to engage in crowdfunding.
Therefore, demographics like age, gender, location, and even income level will be helpful information to know when customizing communications and engagement opportunities geared toward targeting these demographics down the road.
Donors give for a variety of reasons and you want to appeal to those interests to guarantee their continued support. Ask donors where their interests lie as soon as they connect with your organization. With this data, you can ensure that those interested in volunteering, for example, are invited to your next opportunity.
Donor interests often include:
- Networking with other donors
- Education about the cause
- Aspects of your mission (ie. children’s issues, poverty, animal welfare, etc.)
- Volunteer opportunities
8. Communication Preferences: How They Want To Hear From You
People are very specific when it comes to how they want to hear from you. Thus, a donor’s communication preference is an extremely important thing to note. Segment your contacts based on the following communication preferences to ensure that you are reaching them in a way that is comfortable for them, such as:
- Direct mail
- Online chat or messaging via social media, Skype, etc.
- In Person
9. Communication Preferences: How Often They Want to Hear From You
Some donors don’t want to hear from you all the time while others like to be kept in the loop as your organization grows.
The best way to learn how often a donor wants to hear from you is to just ask. Next time you send out a pledge request, include a few options of the information your donor can receive and, if possible, specify the frequency. For example, you can ask if your donor is interested in a monthly email newsletter, a biweekly campaign update, or an annual report.
10. Preferred Way to Give
Fundraising is not all about paper pledge forms and direct mail, though this is still a common way for many nonprofits to bring in donations. In fact, fundraisers have an ever-growing variety of ways to collect donations, including:
- Facebook ‘Donate Now’ button
- Crowdfunding and peer-to-peer fundraising
- Direct mail
Note how a donor prefers to give so that you don’t miss them during the next campaign. If a handful of donors only give during in-person events, but you are running an online crowdfunding campaign, then you want to be sure that you get in touch with that person another way.
“Note how a donor prefers to give so that you don’t miss them during the next campaign…” tweet this
11. Their Role Within Your Organization
It is common for some donors to become more involved with your cause as they continue to give. Record all the ways your donors stay engaged, whether as:
- Board members
- Peer-to-peer fundraisers
Segmenting donors may seem like a never-ending task, but chances are your donor tracking or nonprofit CRM can do most of the work for you, especially if you rely primarily on online donations.
If your nonprofit uses paper pledge forms, in-person events, and other fundraisers that don’t upload information directly to your donor tracking programs, remember that data is only good if it is correct, so keep your database current and accurate.
By doing this, you can create customized communications and engagement opportunities for each segment of your donor population.