Prediction of donor lifetime value and the development of true segmented donor strategy

This paper is based on projects developed by WWAV Rapp Collins on behalf of two UK charities, Shelter and the NSPCC. The classic model used by nonprofit organisations for donor development programmes using the concept of lifetime value (LTV) is challenged and the paper describes the development of an alternative model. The paper assesses existing segmentation methodology and systems such as RFV, and analyses, step by step, how the new model was set up. There is particular emphasis on the scoring methods used and validation of the scores. Income from donors is likely to be maximised by efficiently separating the profitable from the unprofitable with the use of a more discriminating system.     

Integrated donor management: Using telemarketing to increase donor affinity and fundraising income

This paper introduces the concept of integrated donor management (IDM). This is defined as combining two or more development methods to maximise a donor's affinity to an organisation. With IDM, all activities are designed to educate, cultivate and appreciate donors. The telephone is considered within this framework and specifically its relationship is explored with direct mail, major donors, planned giving and donor acknowledgement. Guidelines are provided for using the phone responsibly to increase donor affinity and fundraising income.     

Investigating online recognition for blood donor retention: an experiential donor value approach

• Recognising that charitable behaviour can be motivated by public recognition and emotional satisfaction, not-for-profit organisations have developed strategies that leverage self-interest over altruism by facilitating individuals to donate conspicuously. Initially developed as novel marketing programmes to increase donation income, such conspicuous tokens of recognition are being recognised as important value propositions to nurture donor relationships. Despite this, there is little empirical evidence that identifies when donations can be increased through conspicuous recognition. Furthermore, social media's growing popularity for self-expression, as well as the increasing use of technology in donor relationship management strategies, makes an examination of virtual conspicuous tokens of recognition in relation to what value donors seek particularly insightful. Therefore, this research examined the impact of experiential donor value and virtual conspicuous tokens of recognition on blood donor intentions. Using online survey data from 186 Australian blood donors, results show that in fact emotional value is a stronger predictor of intentions to donate blood than altruistic value, whereas social value is the strongest predictor of intentions if provided with recognition. Clear linkages between dimensions of donor value (altruistic, emotional and social) and conspicuous donation behaviour (CDB) were identified. The findings provide valuable insights into the use of conspicuous donation tokens of recognition on social media and contribute to our understanding into the under-researched areas of donor value and CDB.

Copyright © 2014 John Wiley & Sons, Ltd.     

Advanced techniques of donor recognition

This paper examines the issue of ‘donor recognition’ in fundraising, and how recent technological advances have given charitable organisations new strategic tools in which to recognise and protect their donor base. In providing real-life examples of how American charities are using new donor recognition techniques, this paper seeks to provide specific options of how any charity can maximise the net income potential of every donor on its file.     

How to handle donor complaints

Responding to donor complaints takes great care. But know who's complaining and keep things in perspective.     

Using psychographics for major donor cultivation

Not-for-profit organisations can use psycho-graphics — defined as values, attitudes and lifestyle particulars — to help determine the general type of programme or project the potential donor is likely to find of interest and the best time in its lifecycle to involve the donor. Donors and prospects provide visible ‘clues’ that fundraisers can use to predict their most likely areas of funding interest and willingness to take risks. This can be the key to quicker decision making on the part of the major gift prospect.     

Valuing the donor more than the donation

The "valuing the donor more than the donation" approach is based on a respect for each individual donor and their needs. In order for the long-term value of the donor/charity partnership to be realized, there must first be an appreciation of the need for a carefully cultivated relationship.     

Make donor service excellence your top priority

Donor service excellence means putting the donor first at every level of fund raising within your organization. It sounds simple, but it goes beyond building donor loyalty and developing strong donor relations. It means caring about what your donors desire and not just meeting fund-raising goals.     

Corporate giving: Targeting the likely donor

Recent years have seen a major change in corporate attitudes to giving. There are many accounts in the literature of a move away from a purely philanthropic motive for charity support, to an opportunity-based paradigm where companies seek some tangible benefits in exchange for their donations. This paper reports the findings of a detailed survey of corporate givers undertaken in the county of Devon. The aim of the research was to determine the primary motivations for giving among the business community and the criteria most commonly used to select charities for support. The results clearly indicate that the primary motivation for giving remains a purely philanthropic one. The majority of businesses presently do not look for any gain to accrue from their charitable support and therefore do not monitor the success of their relationships with the charity sector.     

Dispelling the myths about major donor fundraising

• This paper explores some common weaknesses that occur when charities undertake major donor initiatives. It also explodes some common ‘myths’ that can stifle an organisation's major donor work. The basis for identifying these weaknesses and myths comprises of two sources: some original management centre (=mc) research among a number of leading major donor fundraising organisations, and our practical consulting experience over the last 3 years with not-for-profit fundraisers running major campaigns in UK, USA and Australia. In the paper, we also explore how by confronting these weaknesses and dispelling the myths within your organisation, you too can develop a successful major donor income stream. These lessons are now being applied in our consulting work in the UK, USA and South America, with some significant success. We believe they hold important general lessons for anyone running major donor-led capital campaigns.

Copyright © 2009 John Wiley & Sons, Ltd.     

Lifecycle‐based donor performance analysis

With charities of all sizes now having the ability to collect and store very large quantities of data about their donors on in‐house database systems, detailed donor performance analyses have an increasingly essential role to play in the effective planning and management of fundraising. If, however, such activities are to support fully the work of fundraisers then it is important that they are undertaken from the perspective of the fundraiser rather than of the specialist data analyst. This paper introduces an approach to donor performance analysis that is founded on what is termed a ‘donor lifecycle model’. The aim of this is to provide a formal analysis methodology that provides end results that can be more easily interpreted by nonspecialists and so more effectively used in support of the efficient planning of fundraising programmes. Copyright © 2000 Henry Stewart Publications     

Complete fund-raising software systems vs. donor databases

When evaluating fund-raising software packages, it is important to understand the distinctions between them. Not all fund-raising software is created equal. In fact, there is a whole new breed of fund-raising software that has just entered the market.     

A qualitative investigation into the donor lapsing experience

• Donor attrition is costing charities a fortune. Previous research has examined the relative importance of the antecedents to donor loyalty versus lapsing. This study qualitatively builds on this. It reports the results of workshops and interviews that took lapsers and donors back through their donor and lapser journeys. It drills down into and unpacks their experiences—inclusive of the (previously undocumented) lapsing experience itself. It reveals striking similarities between the cancellation of a direct debit and other more conventional purchase decisions. Most worryingly, it seems that most people stop supporting a given charity because they had never really had any loyalty to it in the first place. Charities are not meeting people's needs as donors. There is a distinct lack of understanding between charities and their donors, and donors are lapsing because charities give them little reason to stay. The authors conclude with practical recommendations for the management of attrition.

Copyright © 2009 John Wiley & Sons, Ltd.     

The donor profile survey--a way to determine priorities

Community size, educational background, reading habits, church membership, civic clubs and marital status are just as much a part of why and how much a donor contributes as are his annuity or stock and bond holdings. Learning to profile donors can help set priorities.     

Towards a better understanding of the financial donor: an examination of donor behaviour in terms of value structure and demographics

While marketing academics have long advocated the application of marketing principles by not-for-profit organisations, a review of the literature suggests that attempts to segment financial donors have primarily concentrated on demographic variables. Recently, there have been moves to gain a better understanding of more psychographic influences on individuals' propensity to contribute to charities. It is proposed that the concept of values offers potential for enhancing this understanding. Findings confirm some earlier studies in that demographics such as age, education and household income significantly discriminate between heavy and light donors. Additionally, ten of the initial 56 values tested contribute to the overall discriminant model obtained. The profiles obtained suggest that distinct promotional strategies, with emphasis on different reasons for donating, may appeal to the two groups. Copyright © 1999 Henry Stewart Publications     

Launching a new middle donor programme and making it work

• In 2009, WaterAid identified an opportunity. The opportunity was to create a middle donor programme with the objective of raising a significantly higher net contribution from existing supporters who fell between the mass Direct Marketing programme and the bespoke Major Donor programme. This paper provides a step by step guide to anyone considering launching or redefining their organisation's approach to middle donors. It describes the creation of the business case, development and implementation of an operational plan and, most importantly, provides top tips based on the lessons WaterAid learned as we put theory into practice.

Copyright © 2012 John Wiley & Sons, Ltd.