Kathy: Hello, and welcome to Past, Present and Future the Story of Your Data and Where it Can Take You. My name is Kathy Giles. My friend and colleague Kate Drennan and I will be your host for today’s presentation. I’ve been with the company for about three years and have been working with organizations to develop their fundraising programs for about 20 years now.

Kate: Hi everyone. I’m Kate. Glad you could join us today. I’ve been with Allegiance for five years now. And prior to working here, I was director of membership at the Nine Network of Public Media in St. Louis, Missouri, where I gained lots of client-side experience.

Kathy: So as we begin, we start with the question of: What is the story of your data?

Your data can tell you a lot, but you have to be listening. And today as fundraising becomes more complex, the importance of understanding the story is more apparent. With the growth of sustainers, the diversification of giving channels, and the changes in the world we live in can all impact donor behaviors and all play a part in how your story develops. To know where you were going, you need to understand where you have been and what is currently happening in the present. And by setting up defined goals to work toward you provide yourselves with a path to follow. Today we will review this process of understanding the past and present to arm yourself with actionable information that will put you in the driver’s seat to move you into the future.

Kate: So knowing a little about a lot only gets you so far. Analyzing campaign results is one of my very, very favorite things to do. But without history to put your results into context, it will be hard to plan ahead. So to gain insight, you have to dive deep. Only then can you make sound decisions about the future.

So we want to start with what’s happening right now. What are your campaign results telling you? Evaluate your current results to provide a base, to build from.

So take this example, you’re reviewing your results from your May 2020 add gift mailing. Last May this segment did fantastic, way better than you expected it to.

It was even the main reason you were able to top your fiscal year goal. This year’s campaign though, it tanked, and now you have to explain to your leadership why, and you have to prep the budget for next year’s campaign. So, what are some questions you could ask? Did you mail a different package this year?

Was there a different call to action? Did you include sustainers last year? Or was there like a global pandemic that maybe affected results? So you need to be able to see the forest for the trees, answer questions like this. What have you done well? How’s that affected what’s happening today? What have you not maybe done so well? How did you respond to that?

How do your donors behave and what channels do they give through?

And anything else your file can tell you; I suggest you go down the rabbit hole.

So the apples-to-apples comparisons are terrific for looking at year-over-year performance, but how does it help you plan for the future? We know we can’t plan for global pandemics, so we need to understand the current situation and how we got here.

We’ll need to break out donor and revenue data by fiscal year to understand the trends within.

So about your donors, how’s your donor life cycle defined? You likely have a solid idea for how many donors fall into each category now but looking at the trend over the last five years can really help highlight where you’re seeing success and where you’re not.

So in this example, the number of donors is up, right?  Oftentimes we can spot opportunities in the trends. The chart on the left lets us know that we’re adding donors. Nice! But when we break out the number of donors a bit further, we can see that there’s opportunity to reactivate plenty of lapsed donors, thereby adding them to the donors available for add gift next year.

But we haven’t quite identified the trend yet, have we? Sometimes seeing the forest for the trees can be a little disappointing. In this example, in the last two years, the counts of new and reactivated donors shrank by about 10% each year. So seeing this trend, though, you can start to outline a few objectives. Increase the number of new reactivated donors by XX percent.

I love a good growing revenue trend. There does seem to be some opportunity here, though. If you pull some statistics from a trusted source, you could probably round out your 10,000 plus story. Gifts over 10,000 account for about 3% of the revenue in FY19. But did you know that 90% of high-net-worth households give to charity and that these donors give an average of $29,000 each year?

Should we develop an objective around building a prospect pipeline for our major gifts officers to cultivate? The answer is maybe, but it might be worth chasing down the rabbit hole by more. Average gift size, in this example looks like it’s going down. Organizations with sustainer programs know that this is actually kind of a good problem to have.

If you have a healthy number of monthly givers, the data shows that the number of gifts is on the rise and with the monthly giving program, that number is going to go up in the next few years. But let’s simplify the data that we have here. Take, for example, in FY15. If 10 donors make $58 annual gifts, that creates an annual revenue of $580.

But in FY19, if 10 monthly or sustaining donors made 12 $28 gifts, your annual revenue would be $3,360. This is the reason for a really strong sustainer program because that’s what helps you create reliable, long-term revenue.

So about those sustainers, rollover is a great indicator of your sustainer file health.

In this example, you can see that the growth rate is slowing maybe due to an accounting problem, but that’s unlikely. It could be that you’re reaching the max threshold of sustaining donors on your file. I know of a few programs at 60, 70% sustainers, but most these days are between 40 and 50%. So instead of focusing on the number of sustainers.

Now you should turn your attention towards getting sustainers to upgrade their monthly, giving amount. So how donors choose to give; this is a giving channel revenue report. And if you’re public media station, there’s probably no shock here. Pledge and direct mail are the biggest pieces of the pie. But other channels aren’t really supporting much.

So, it feels like there’s some opportunity here. Email is growing and as more donors choose to give online, this number has lots of potential to increase. Telemarketing has always accounted for a pretty low percentage of revenue. So consider how long it’s been since the scripts have been updated. How you’re communicating the ask.

Is it sustainer first? Is there a particular segment worth a telemarketing push? As you can see, if no changes made with the same old, same old. So now I’m going to hand it back over to Kathy to take you guys the rest of the way through the journey.

Kathy: Thanks Kate now to look to the future. You have analyzed where you have been and what is currently happening.

When you put this information together, you can start to project out where you are. But as you evaluate this collected information and data, the question will be: Is the projected future what you want to happen? Is it what you need to happen? If you are moving in the right direction, then how do you maintain it?

If you are not, what needs to happen to get you where you need to be? To know if the projected future is on the right track to lead you to success, you need to have strategic goals in place. Setting clear goals puts you in control of what will happen and is an important part in understanding the story of your data.

You can think of it as the moral of the story. Goals give structure and direction, something to strive for and helps uncover the path to get you where you want to be. There are long-term goals, which may be what you want to reach in three to five years, you can also have short-term goals, with individual campaigns and what you want to happen within the fiscal year.

These are steppingstones to help you reach your long-term goals. With clear strategic goals, you now have a high-level direction to follow. You can begin to develop strategies in how to execute this plan to move you in this direction. You can measure against these goals and know how you’re performing to give insight to how the strategy is working. To know where you were going, you have to know where you have been. Let’s talk about goals. Compare goals to your observations of the past and present. For this example, we will say your long-term goal is to increase your current donor file to increase revenue. Fairly basic and something that’s very common for just about everyone. Based on this analysis we have just reviewed, we know the following.

You have seen a five-year trend of year-over-year increase in current donor counts and revenue. The last fiscal year donors grew by 5%. Looks great and in line with what you want. You also saw that the gain in donors, new and reactivated, is outpacing the losses for those who are lapsing. Again, this is showing you’re moving toward your overall goal.

However, the trend in the number of new and reactivated donors is decreasing, meaning you are having a harder time replacing the donors who are lapsing. This is a red flag in regards to your goal. As you begin the review process of looking at the information you have collected and the trends you are seeing and compare this to your set goals, you may find that you have uncovered more questions and you need to continue to investigate further. So you keep digging. One of the issues we uncover is with your lapsed donors, and our ability to recapture that along with a decrease in new donors. Here, we want to better understand what is happening to the file.

An important metric to look at is donor retention, which helps you understand the health of your file as well as pinpoint any challenges. Understanding your donors’ retention provides a baseline to build from. Here, we can see overall donor retention looks good with year-over-year growth, but the growth slowed in the most recent fiscal year.

This may spark questions about any recent changes made to your program? Changes to messaging, packages, offers, outside environmental changes like a worldwide pandemic; all of this can impact retention. Go deeper and look at the lifecycle retention to see how multi-year and second year donors retain, as well as the retention of recaptured lapsed or win-back.

In our example, we see multi-year is holding that is not really seeing continual increases. Second year donor retention has seen nice increases. Here, you might start to question how sustainers are doing. And we see win-back struggling recently. And it’s something to watch. By looking at retention by donor value, we see higher value donors are retaining better than lower. Why? Can we upgrade the lower value donors to help retain them? Are you giving donors under $50 a reason to stay? For membership organizations, how is the structure of the membership program supporting retention? Getting into details, what is happening? You’re comparing them to your goals will help you arm yourself with details needed to move forward. Sustainers, or our monthly donors, are growing many organizations. How are sustainers impacting retention of both donors and revenue? How are they impacting the larger program? If you have a growing sustainer file, you will most likely see gains in retention of both donors and revenue. But with sustainers, you also want to have some specific benchmarks to track performance and trends with this segment.

For example, how is the sustainer file changing? What does this growth look like? What percentage of active donors are sustainers? What percentage of revenue comes from sustainers? What is the average gift and revenue per sustaining donor? Sustainers are an important part of fundraising program. As sustainers become 35%, 40% or more of active donor file, they have large impact on the file trends and revenue. We will need to focus more attention as we look toward your goals. Additional metrics to watch are giving trends. When looking at giving trends like average gift and gift frequency, you can see the impact of growing sustainer file. As sustainers increase, the average gift decreases, but gift frequency goes up as donors move to a monthly donation.

A lower average gift is okay as long as you are seeing the frequency increase. When we look at our example, things are in line. However, we also see upgrades are decreasing. As the sustainer program grows and becomes a larger percentage of both donors and revenue. How donors upgrade is important to track because sustainers can be more difficult to upgrade.

So, if we want to increase both the number of donors and revenue upgrading is identified as a red flag. Giving channels, as fundraising programs become more complex, understanding how donors choose to give and what channels they use can help you develop communication plans to reach your donors. There are many options to choose from.

So keep an eye on any changes to help uncover areas of opportunity, especially when it comes to digital. As donors are using multiple channels, are you leveraging all channels appropriately? Are you providing donors with opportunities to give? What channels do donors make their second gift through? How are donors choosing to communicate with you?

And are you meeting them where they are at? Do you see opportunities to grow? All of this important information can help you develop strategic plans to help you reach your goals. Now it’s time to move to strategy and execution. You have to look at the present and what is happening. You have looked at the past to understand where you have been and how it relates to the present results.

You have evaluated these findings against your long-term and short-term goals. This process will tell a story and will let you know if you are moving in the right direction. As you evaluate results and trends against your goals, you will begin to uncover areas that need focus, potential problems needing to be addressed and corrected.

It can also help identify opportunities that you may not have seen before. This is a process. The purpose of this process is to help define your next move to develop targeted strategies and the best way to execute these strategies to move you toward your goal. If you have long-term goal is to grow number of donors to help increase revenue, then we have to address the issue of the year-over-year decrease in new and reactivated donors. A couple of options could be to test a model list as part of an acquisition. Another option is to add lapsed into the renewal program as a shadow series to win back more lapsed donors. To help increase revenue, focus on sustainers. Try telemarketing as a tool to encourage upgrade. Develop a multi-channel upgrade campaign and take a look at your membership program.

And does it offer incentives for donors to increase their annual gift? Based on the channel matrix we saw, a need to build up digital program to encourage online (giving) is there. Try launching an acquisition, digital acquisition program to help grow online donations and support new donor growth. Develop a welcome series for new email addresses to educate and encourage new joins. Create an ongoing email solicitation plan to provide donors with opportunities to give. These are a few identified problems that we uncovered through our research and strategies that can help move us toward our goal. And the story will be unique to each organization as well their goals. So what is the story of your data. Today we reviewed a process of better understanding what is happening to your file and programs to help you uncover potential problems as well as new opportunities. It gives direction and what steps to take to meet your goals. This is how you listen to your data. It is also how it puts you in control to write the next chapter and the chapter after that. Take notice of the past and present, and it will lead you into the future.

Kate: We will send out a copy of this webinar and we hope you have a wonderful day. Please feel free to email either of us with any questions. Thank you very much.