Here’s a guaranteed way to improve your annual fundraising over the next several years: In the first quarter of every year, conduct an annual donor review!
What’s that? Never heard of an annual donor review?
Not surprising. The donor review doesn’t seem to get much attention in the world of fundraising. This needs to change.
First, what exactly is an annual donor review?
Fundamentally, a donor review is the process of uncovering trends and understanding the gift potential within your donor database. What you’ll discover through this process informs your individual fundraising strategy for the coming year.
Specifically, your donor review looks at the recently completed fundraising year and identifies which donors or groups of donors need your attention.
Comparing those results and trends with those of prior years illuminates whether your fundraising program is on the right track.
You’ll answer questions like these:
- What percentage of donors made a repeat gift in the fundraising year that just ended? (Retention Rates)
- How many donors made a first gift last year?
- How many first donors from the prior year renewed last year? How does that compare to years before?
- Who are your most loyal donors? Is it time to request an upgrade?
- Who are your mid-level donors? How many? Are any of them good major gift prospects?
- Who are your best candidates for a monthly giving campaign?
- Which donors should you “bless and release?”
Let’s look at some examples to demonstrate how this might be worth your time:
Pensacola Children’s Advocates identified donors who had been giving the same size gift (between $100 and $250) every year for at least the past three years. During their annual campaign, they designed a special appeal for these donors asking for a specific, higher gift amount. When they analyzed their results, they discovered 45% of those donors upgraded their gift.
By looking at several years of lapsed donor history, Fulton County Literacy Council began to notice that sending appeals to lapsed donors of 4 years or more was losing money because of low response rates. They decided to limit solicitations to this group to once every two years and test targeted lapsed donor language in those appeals.
Nashville Exotic Animal Rescue began charting gift numbers by gift amount over several years which helped them develop realistic, achievable fundraising goals. This led to not only increased revenue, but increased satisfaction and retention of their small development staff.
So how do you do possibly manage to pull off a donor review? Where do you even start?
Answer: Start small.
For your first donor review, do these three things:
1) Determine your retention rates. Here’s a step-by-step guide to make it easier.
2) Pull a list of KEY lapsed donors.
- Find out who they are.
- Find out how many there are.
- Tag them in your database (or keep their names in a spreadsheet).
- Make a plan to give them some extra attention this year.
- Next year, as a part of your donor review, track how many of these donors renewed.
3) Identify your mid-range donors
- Have you defined what “mid-range donor” means for your organization? If not, do that first.
- Of these mid-range donors, who has been giving for several years? Who needs extra cultivation and/or an upgrade ask? Add cultivation activities targeting these donors to your calendar and annual fundraising plan.
- Through a little prospect research you’ll no doubt identify some great major gift prospects from this group.
By starting with these three activities, documenting what you do, and evaluating your efforts, I guarantee you will see improvements to your donor retention and annual fundraising program during next year’s donor review.