The Evolving Donor Landscape
Nonprofit organizations may have differing missions, taglines, and strategies, but one thing remains constant- the need to attract donors. Donors are the lifeblood of these organizations, providing the funding necessary to sustain operations and accomplish the mission. The donor landscape is constantly evolving and, as a result, organizations must look for new and improved ways to attract donors, while sustaining their relationship with current ones. It is an ongoing challenge to understand the expectations of donors and identify the most effective channels to communicate with them.
Historically, many nonprofits have relied on direct mail for their new donor acquisitions. However, the internet, along with the emerging presence of social media, has created new channels for communication with donors. Most organizations have begun to utilize the internet in one way or another, with many using it as a source for acquiring new donors. The question is, "How do these new online donors compare to the traditional donors acquired through direct mail?"
A recent article in the NonProfit Times, based on a 2011 report authored by Helen Flannery and Rob Harris, highlights some of the characteristics of online-acquired donors in comparison with those in the direct mail channel. Let's take a brief look at some of the findings.
- It has become increasingly common for new donors to give their first gift online.
- Online-acquired donors are significantly younger and tend to have a higher household income than mail-acquired donors.
- Online-acquired donors tend to have slightly lower retention rates than mail-acquired donors.
- Online-acquired donors tend to give much larger gifts than mail-acquired donors. However, because retention rates for mail-acquired donors are much higher, the cumulative value of the lower gift amounts in this channel eventually surpasses the value of the larger gifts given online.
- One particularly notable finding is that every year, a large percentage of online-acquired donors switch to offline channels to continue their giving. Most often they switch to direct mail. Just under half of all online-acquired donors eventually switch entirely to offline.
While acquiring donors online has indeed become a new trend, direct mail still remains the most dominant vehicle for new donor acquisition. In the future, as nonprofits seek to broaden their donor bases by utilizing multiple channels, they must also develop the internal processes to meet, measure, and monitor donor demands. With the constantly evolving donor landscape, measuring and monitoring donor information is the key to properly managing your relationship with them, regardless of which channel is used. After all, you can't manage what you can't measure.
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