Donor Segmentation Strategies For Better Fundraising

In nonprofit fundraising, truly connecting with your donors is essential. This is why donor segmentation (dividing supporters into smaller groups based on their characteristics or behaviors) is vital. Not only does it give you valuable information about your audience, but it results in more effective fundraising campaigns as well.

That’s what this “mini guide” is all about – why donor segmentation is important, how you can effectively implement it at your own organization, and our advice for best results. If you are looking to maximize your donations, this post is for you.

Why Donor Segmentation Matters

Let’s start with a few good reasons why donor segmentation is so essential. That will put the rest of our advice into context:

• Personalized communication. The more somebody feels like you are speaking directly to them, the more successful you will be. This is true for both private businesses and nonprofits. A one-size-fits-all approach often gets lost in the noise? But with segmentation, your message is often much more relevant for the people consuming it. 
• Efficient use of resources. Nonprofit budgets are often tight. By focusing your efforts on those that are most likely to respond, you are able to use your time, money and energy more efficiently.
• Improved donor retention. Repeat donors are the backbone of your fundraising efforts. Multiple studies prove it. Implement nuanced donor segmentation, and you are able to cater to each donor’s interests and giving patterns. This shows that you care about them as individuals, and increases the likelihood of long-term support.
• Better decision-making. Lastly, segmentation gives you detailed data on different subgroups of your audience. This can help you identify which of your campaigns perform the best. The result? Valuable insights that make it easier to fine-tune your decision-making and create campaigns that deliver. 

The Tools You Need For Donor Segmentation

Before you dive into our actionable advice, you need the right tools for donor segmentation. While most nonprofits are already working with some combination of these, it’s useful to have a list. Here are four different kinds of tools you should consider. We’ve also linked two options for each category:

• CRM Platforms. Automatically sort donors by a number of data points like giving history, overall engagement, or specific demographics. We recommend Nonprofit Cloud or Bloomerang. 
• Email Marketing Software. Build segmented lists with tags and send email-based campaigns that are relevant to each donor. We recommend Mailchimp or Constant Contact.
• Analytics Tools. Analyze user behavior on your website and identify how site visitors interact with your content. We recommend Google Analytics or Hotjar.
• Survey Tools. Gather information like donor interests and communication preferences to further refine your various segments. We recommend SurveyMonkey or Typeform.

5 Strategies For Better Donor Segmentation

Now that we know why donor segmentation matters and the tools you need to get started, let’s get more specific. Below you will see our five suggestions segmenting your audience. Remember: these won’t apply to every nonprofit. But if you implement even one of them, your fundraising results will be better because of it.

1) Segment By Donation Frequency

Why it works: Regular donors are the most valuable people in your audience, and they expect ongoing updates. In contrast, donors that have only given once can be spurred to action with a simple reminder to give again. 

Implementation tip: “Insider info” or exclusive impact stories make your most frequent donors feel valued (as they should be). This keeps them engaged and makes it more likely that they decide to continue giving. As for less frequent givers, try a gentle “nudge” to re-engage them. This can be paired with fresh data that shows precisely how their donation will make a difference. 

2) Segment By Giving Capacity

Why it works: High-capacity donors (think individuals or organizations that have given thousands of dollars) may want deeper involvement with your organization. More modest givers, meanwhile, still want to see how they are contributing to some kind of outcome.

Implementation tip: If possible, consider offering major donors a personalized meeting or a project proposal for how you can continue working together. For smaller donors, highlight the collective impact that they are part of (“Your $20 monthly gift contributes to feeding 100 families a year!”).

3) Segment By Engagement Level

Why it works: The engagement of your audience will always vary. For example, some of your donors might only read your newsletter, whereas others are active at your events. Tailoring how you communicate with donors avoids burnout or neglect.

Implementation tip: Similar to our last tip, this one is all about sending the right message to the right person. Invite your more active donors to volunteer days or leadership councils. You should also be sure they are acknowledged for their effort, and thank them for their involvement.

4) Segment By Cause Interests

Why it works: Many nonprofits are involved in multiple programs. Unsurprisingly, donors will usually prefer updates about the programs they care about the most.

Implementation tip: Let your supporters choose which programs they want to hear about. This can easily be done with a quick form upon joining your email list. The result is that each message you send to your donors is more relevant and valuable to them as individuals.

5) Segment By Communication Preference

Why it works: We all consume content in different ways. It’s no different with your audience. Whereas some donors respond best to direct mail, others might prefer social media. Acknowledge these differences in your donor segmentation, and it becomes easier to get peoples’ attention.

Implementation tip: Use surveys or preference centers. This will allow your donors to select how exactly they want to be communicated with. You should also track response data to ensure that you’re using the right channels in your communication.

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