As we navigate the ever-changing landscape of nonprofit fundraising, it's crucial to stay on top of the latest trends and technologies, especially when it comes to building major and planned gift pipelines.
This is true even in the best of fundraising climates. Unfortunately, research shows us that small and mid-size donors are disappearing, while major donors aren’t adjusting their gifts for inflation.
So how can advancement and development professionals scale sustainable revenue when it seems the economy has a different agenda?
The key is to understand the current climate and stay on the forefront of the innovation curve to elevate world-class donor experiences.
The Latest Donor Behavior Research
The latest Giving USA report tells us that overall giving declined by 10.5% in 2022. Giving by individuals was down 6.4%.
And according to the Fundraising Effectiveness Project, retention hit an all-time low of 42.6% in the same year. Donor retention continued to slide, driving a slight decrease in fundraising dollars This continues a trend that began in 2021, after a large uptick in donations and donors in 2020.
This isn’t to say that it’s the fault of the donor. Rather, institutions have an opportunity to elevate their world-class donor experiences to grow a culture of continuous philanthropy among their donors and increase giving at all levels.
The Consumerization of Donor Expectations
It’s no secret that the widespread digital tech adoption and automation of most commercial interactions has affected the way people purchase products and services. The further this adoption makes its way through our collective culture, the more we all expect increasingly fast and seamless online transactions (from order to fulfillment), self-service options, and tailored services. Donors are no different.
Where advancement professionals have an opportunity that their for-profit peers do not is that they know their donors in deep and meaningful ways outside of transactions. Today’s donors are conditioned to expect self-service options, highly personalized touchpoints that remove constant transactions from donor communications, and ways to make giving easy.
When institutions elevate their world-class donor experiences to meet these needs, not only can they retain donors at all levels of giving, but they increase multi-year giving commitments, grow the planned and major giving pipelines, and put a stop to the larger trend of donor attrition.
How to Elevate the Donor Experience
1. Digitize Existing Processes & Standardize Multi-Year Giving
The large majority of institutions have a threshold for accepting a pledge from a donor. Typically, this threshold sits between a $50-100K gift, completely eliminating multi-year giving programs for donors at all levels.
The reason these programs don’t exist has merit – traditional processes and gift agreements require rounds of edits, review, printing, signing, and scanning PDFs or paper documents. These processes don’t lend themselves to timely gift closes or streamlined workflows – there is not enough juice to justify the squeeze underneath the pledge threshold.
However, by digitizing the gift agreement process with digital gift agreements that solve these challenges from creating a pledge to collecting e-signatures, and more, leading institutions are now expanding their pledge process to donors at all giving levels, opening multi-year giving opportunities that never existed before.
2. Ensure Highly Personalized Communications at Every Level of Giving
‘Personalization’ has been a hot-button work in advancement for years now. While much attention is given to personalization in donor communications, the same cannot be said for the entire donor experience. Consider this: in the financial services industry, 72 percent of customers rate personalization as “highly important.” Fundraising shares similarities with financial services in many respects and this is one – in the financial services industry, deeper personalizations leads to increased customer retention and lower acquisition costs.
Find ways to incorporate highly personal communications across the entire donor experience. Think about ways to translate donor data into actions, giving intent, and tailored giving plans that match their affinity for your institution. Higher educational institutions have robust donor profiles that can offer elevated levels of personalized donor experiences.
3. Improve Time-to-Close with Automation
When institutions improve the donor experience in meaningful ways, they see the impact on the back-end. One notable metric that the donor experience improves is the time it takes to close a gift. Time-to-close measures the time between when a donor commits to giving and when that gift is properly documented, confirmed, and booked.
Time-to-close impacts gifts of all sizes, including major gifts. Finding an automation solution that empowers advancement officers to create, edit, and send a gift agreement in seconds is the first step to improving this metric. The second step is making the donor experience around confirming the gift not only easy – but so easy that donors feel rewarded by the process.
Cutting-Edge Tools and Technology for Nonprofits
In 2024, several new tools and technologies have emerged to help nonprofits streamline their fundraising efforts and enhance donor relationships:
1. Intelligent Gift Documentation Management & Smart Gift Agreements
Today, donors expect an easy process for making donations. There’s no need to drown your supporters in long paperwork and PDFs that they have to print, sign, scan, and email back to you. Intelligent Gift Documentation Management has revolutionized the way nonprofits handle gifts at all levels of giving with Smart Gift Agreements. These online agreements provide a clear, legally binding framework for both the donor and the organization, detailing the use of the funds and any recognition the donor will receive. They're quick, easy to manage, and environmentally friendly, reducing the need for paper-based processes.
2. Automated Pledge Reminder Software
Pledge reminder software is a game-changer for managing multi-year commitments. This technology automatically sends pledge reminders to donors about their upcoming pledge payments, keeping them engaged and informed. It also allows for easy tracking and reporting of pledge fulfillment, ensuring that your team stays on top of these crucial commitments.
3. Enhanced CRM Systems
Constituent Relationship Management (CRM) systems have evolved to offer more sophisticated segmentation, analytics, automation and even AI tools that provide deeper insights into donor behavior and preferences. This enables nonprofits to tailor their communications and appeals more effectively, increasing the likelihood of securing and retaining major gifts. If you’re still using a legacy CRM, it might be time to at least take a look at what the landscape has to offer.
Implementing New Strategies
With these tools and strategies in place, institutions can confidently approach 2024 with a solid plan for elevating the donor experience and expect to see bottom-line results, both in the form of increased revenue today and growth in major and planned gift pipelines. The key to successful fundraising lies in the perfect blend of technology and personal touch. While new tools and technologies provide efficiency and insight, they can also provide genuine, heartfelt engagement – and that’s what turns mere donors into lifelong supporters.
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