Venture Philanthropy: Is it a Worthwhile Investment?

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Successful nonprofits should constantly look for new funding opportunities.  In recent years, venture philanthropy, a high engagement form of investing in nonprofits, has been on the rise.

Experts have rated venture philanthropy as the fifth most promising trend” globally (45%). Venture philanthropy “ranks the highest in the United States (53%), where it comes in second.”

What is Venture Philanthropy?

Venture philanthropy has gained in popularity as an increasing number of business leaders seek to be more socially responsible. The desire for positive change combined with the financial needs of nonprofits makes this funding a win-win.

Venture philanthropy utilizes the same process venture capitalism uses when looking for companies to fund. The difference is that instead of investing in a promising up-and-coming business, a venture philanthropist invests in nonprofit organizations. In venture philanthropy, the investor focuses on maximizing social impact, helping charities to scale and make the most of their funding.

Instead of investing in institutions that promise personal financial rewards, philanthropists fund charities based on their potential to favorably impact the world. These funds come in the form of grants or start-up funding.  Venture philanthropy is typically practiced by large charitable foundations or venture philanthropy organizations.

Examples of venture philanthropy charitable foundations include:

  • The Robin Hood Foundation
  • The Cystic Fibrosis Foundation
  • Tipping Point Community

Some venture philanthropy business organizations include:

  •  The Asian Venture Philanthropy Network
  • The Social Ventures Australia
  • The European Venture Philanthropist Association

A philanthropic organization or philanthropist will research and vet the charities they choose to fund based on certain criteria. The Cystic Fibrosis Foundation, for example, has financially contributed to start-up medical research companies to develop, test, and market treatments. The Robin Hood Foundation funds charities in New York devoted to assisting low-income New Yorkers.

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The Venture Philanthropy Environment in Silicon Valley

Its historic concentration of innovative, high-tech start-ups has made Silicon Valley a long-time leader in securing funding from investors and venture capitalism firms. Entrepreneurs in this area are more likely to donate funds, time, resources, and expertise to charities. These self-proclaimed philanthropists embrace a strong commitment to giving back and are empathetic to the fundraising challenges nonprofits face.

Corporate backers of start-ups also have a powerful presence in Silicon Valley. With a number of these innovative companies led by socially conscious founders, many large organizations have been extremely receptive to venture philanthropy.

Silicon Valley philanthropists bring their start-up mindsets to their approach to venture philanthropy and are most likely to support nonprofits that meet the following criteria:

  • Similar to start-ups and founded on big ideas and an impactful mission
  • Replicable and scalable
  • Advance fresh problem-solving strategies employing innovation to address ongoing issues

 

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  • Silicon Valley Philanthropic Trends

Below are two Silicon Valley “giving code” philanthropic trends that nonprofits should watch to get tech leader funding:

  1. Silicon Valley tech leaders and entrepreneurs want to be “bigger, better, and faster” in their giving, contributing large gifts to the causes they care about.
  2. Tech entrepreneurs are more skeptical of nonprofits. These donors are interested in making an impact, and won’t donate to just any charity.

The Role of Organizations in Philanthropic Endeavors

In venture philanthropy, investors and organizations do more than just give financially to a charity. Venture philanthropists also come alongside the nonprofit, providing additional services to help it operate effectively and quickly get off the ground. Once a nonprofit is running efficiently, it will be successful and able to make a greater impact.

Nonprofits acknowledge the need for operational support that enables them to make donations go farther, increasing the potential for generating significant change. Here are some ways investor organizations can be involved in equipping nonprofits with the resources needed to achieve the greatest impact:

  • Funding: Organizations give financially to charities. Unlike typical funds and grants, nonprofits have greater free reign in reporting and meeting requirements.  While venture philanthropists give charities more autonomy in deciding how to allocate funds, in turn, they expect their donations and support to have maximum impact.
  • Marketing: Big business organizations have in-house marketing and advertising experts who can support nonprofit marketing teams. They can also serve as a charity’s outsourced marketing department.
  • Leadership and Management: A leader who has support, is well-trained, and receives continual mentoring will thrive. Well-managed nonprofits are better equipped to achieve their mission and have a significant social impact. To ensure the nonprofit’s success, investors may fill executive and board positions with their own business experts.

 

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The Future of Venture Philanthropy

Venture philanthropy has proven to be a promising nonprofit fundraising source. But will it stick around? While there is growing support for social change within the business community, it may become more difficult to obtain venture philanthropy funds. This is in large part due to many start-ups and venture capitalists looking outside Silicon Valley.

Remote working and high costs have taken a toll on venture capitalism in the area. Many businesses and venture capitalists have left Silicon Valley for less-expensive cities like Los Angeles, Seattle, Boston, Miami, and Austin. PitchBook predicts that in 2021, the count of Silicon Valley venture capital businesses will fall below 20% for the first time in history.

Does this mean venture philanthropy is likely a short-lived fad? Not necessarily.

Venture philanthropists are interested in collaborating with nonprofits and helping them achieve their desired results. Donors want an interactive relationship with their chosen charity rather than a transactional one. As business leaders, there is an increased desire to be socially responsible and make a positive, lasting impact.

The emotional connection to making lasting change has grown in the last 10 to 15 years. This is good news for smaller nonprofits in need of funding.

 

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Venture philanthropy will continue to be an increasingly popular fundraising option for nonprofits due to the growing acceptance of social responsibility.  This method brings lasting change that benefits both the investor and the recipient charity.  When it’s time to start your research to identify potential Venture Philanthropists, wealth intelligence and relationship capital tools can help make the difference in securing the financial and organizational support needed to make a difference for your beneficiaries.

How can wealth intelligence and relationship capital platforms support my outreach?

Giving Capacity WealthEngine’s WeathScore™ provides a new dimension in wealth analytics, targeted fundraising and prospecting. The WealthScore™ is built upon WealthEngine’s Propensity to Give Score and Wealth Ratings, in order to combine the best parts of both worlds. The score incorporates traditional wealth and asset information while also adding additional key data points from the profile to provide a more complete picture when trying to identify a Venture Philanthropist with the right giving capacity. It even considers the strength and predictive value of specific data source matches, like a tie to a family foundation, as a way to identify potential major donors and clients.

Building Archetypes Leverage the Wealth-X Professional platform to build ideal archetypes that identify potential Venture Philanthropist partnerships and gather powerful insights into how to engage with the right wealthy prospects. Advanced Search filters allow you to refine your research and target prospects based on key outreach success indicators such as interests, passions and hobbies, historical philanthropic donation information and key geographical information.

Leveraging your Network BoardEx helps you unlock the best relationship paths to the people you would like to reach. Leverage BoardEx’s proprietary relationship mapping tools to identify existing relationships that can connect you to your potential donor. Once you have identified a Venture Philanthropist you’d like to engage with, BoardEx data provides a detailed look at their professional background to help support your approach. For example, knowing any historic philanthropic board seats they may have held can help indicate their affiliation to your particular cause.

 

Giving Trends for Social Justice Organizations + 8 Ways to Leverage Them

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Support for social justice nonprofits has been growing in recent years. This is due to conversations sparked by current events and generational shifts in attitudes. Studies suggest this increased interest is here to stay, which is good news for organizations dedicated to achieving lasting systemic change.

This guide takes a look at current top giving trends for social justice causes and explores what the donor landscape might look like in the future. This article also covers six data-driven methods for attracting new donors to your nonprofit. Even if you’re a small organization with limited resources, focused action can radically impact your fundraising efforts.

Top Giving Trends for Social Justice Issues

Following the senseless murders of Breonna Taylor, George Floyd, and other Black Americans, there has been a significant increase and sustained awareness of and passion for social justice issues. Organizations across the United States saw a dramatic increase in donations throughout 2020 and into 2021. This was especially true for grassroots nonprofits and crowdfunding campaigns, with both receiving record amounts of gifts.

While donations poured in for national organizations like Black Lives Matter, awareness also grew for local nonprofits such as Reclaim the Block and Black Visions Collective. Together, these two organizations received a combined $30 million in gifts as of June 2020.

The Minnesota Freedom Fund received an additional $30 million in donations, which is 300 times its annual budget. Meanwhile, the GoFundMe established for George Floyd received the most donations in the platform’s history. The fundraiser for the family of Breonna Taylor has raised over $6 million.

Calls demanding social justice reform have spanned across multiple generations. However, it is worth noting the impact of this movement has inspired younger generations to passionately advocate for the advancement of this cause in the form of ongoing efforts to support race-based causes and nonprofits dedicated to social justice.

A decade-long study conducted by the Case Foundation found civil rights and discrimination were among the top causes Millennials in the United States care about. Younger Americans also prioritize these concerns. Data collected by the Pew Research Institute shows that Generation Z and Millennials have similar viewpoints when it comes to racial issues.

8 Ways to Leverage Trends to Increase Donations

If your organization focuses on social justice issues, there are several ways to increase donations by leveraging trends in donor behavior.

1. Target Young Donors With an Annual Giving Campaign

Meet Generation Z and Millennials where they’re at financially. This is easily done by asking them for small gifts during your annual fund campaign. This type of fundraiser is vital because it keeps donors engaged from year to year while generating unrestricted dollars that help you achieve your core mission.

Over time, donors who contribute to your annual fund year in and year out will deepen their connection with your organization. Long-term nurturing builds trust between you and your supporters. This increases the likelihood they’ll contribute a major gift once they’re financially able.

If you don’t yet have many younger donors in your database, consider investing in a tool that searches for prospects by demographics. WealthEngine, a software platform for researching prospective donors, comes equipped with such a feature. It pulls data from 60 sources to analyze 300 million individuals.

WealthEngine Prospecting

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WealthEngine then creates ultra-targeted audience lists using the parameters of your choice. Filter by age, income, organizations, and causes they already donate to, and more. The software also provides up-to-date contact information for every individual on the list, so you can reach out to prospects with ease.

2. Focus Your Digital Marketing Strategy

No doubt you know the value of having an informative website for your nonprofit. An active online presence helps build trust between you and potential donors. It also facilitates communication between you and your community.

However, the number of potential digital marketing channels can often feel overwhelming, especially for smaller organizations. Are you really expected to have a website, email list, Facebook page, and keep up with the multitude of other social media platforms including Instagram, LinkedIn, Twitter, and TikTok?

Fortunately, recent data shows how you can focus your efforts for maximum impact. Abila, a fundraising software company, conducted a donor engagement survey that found younger generations prefer to donate online. The research also shows Millennials like brief forms of communication such as short emails or texts.

Donor Engagement Survey

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These findings emphasize the necessity of maintaining a website that is easy to navigate and a donation page that is user-friendly. You should also plan to send weekly or biweekly emails updating supporters about the organization’s projects.

As for social media, small organizations with limited time should think strategically about who they want to reach. For example, if you already have a sizable Boomer donor base but want to attract more Millennials, consider focusing your outreach on Instagram, where Millennials are the largest group of users.

3. Tell Donors Exactly How Gifts Help

Transparency is vital for building trust between your organization and its supporters. One way to achieve this is to show donors what you can achieve with their dollars.

An abundance of research has found that maintaining a policy of transparency is essential for retaining your donor base. A Case Foundation study found that three-quarters of millennials would stop giving to an institution if it wasn’t clear how their contributions make an impact.

The solution is simple. Consider this example from the Network for Social Justice, an organization seeking to increase equity in Winchester, Massachusetts, and beyond. Their donation page includes a graphic describing the impact certain gift amounts can have.

Impacts of Gifts Infographic

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A graphic like this shows supporters how even the smallest gifts can make an immediate difference. It also gives people a better idea about what your organization does on a daily basis.

4. Offer a Membership Program

A nonprofit membership program incentivizes giving while also increasing engagement among donors. Benefits of being a member may include receiving gifts or attending events not available to non-members.

Membership programs are common among museums and other cultural organizations. For example, check out the National Museum of African American History and Culture:

NMAAHC Membership Benefits

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Even the smallest gift amount—$25 dollars—gives donors a 10% discount at all Smithsonian gift stores. Meanwhile, the largest gift amounts come with perks like a members-only breakfast with a museum curator.

Aside from creating a steady, recurring stream of funds for your organization, this also keeps supporters involved throughout the year. That way, when it’s time to renew their membership, they’ve already been sufficiently nurtured and have no problem recommitting their support.

This guide from WealthEngine goes into more detail about membership program strategies. One of the most crucial techniques is to conduct regular surveys asking members why they chose to renew their support or leave the program. This will help you refine your incentives and increase retention.

5. Encourage Growth Through Word-of-Mouth Marketing

Word-of-mouth marketing can’t be underestimated. Consumer brands know this well. Referrals from friends and family drive an estimated $6 trillion annually.

This marketing strategy is just as powerful for nonprofits. The Case Foundation study found that Millennials were more likely to get involved in an organization if their peers recommended it.

Many social justice groups experienced this firsthand in the wake of George Floyd’s death. Before national media outlets featured them, support for Minneapolis organizations like Reclaim the Block grew through social media networks.

There are several ways to encourage these kinds of referrals. The first is to simply ask. In a follow-up email thanking a supporter for their donation, write a line or two requesting they tell a friend about your organization.

It’s possible to automate this process for your donors, too. Many online donation platforms, such as JustGiving, automatically prompt users to share a campaign on social media after they make a gift.

Just Giving Social Media Share Prompt

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Another low-tech method is to put a button at the bottom of your e-newsletter encouraging subscribers to forward the email to a friend. The key is to make the action effortless for donors.

6. Plan Ahead for Year-End Giving

Nearly one-third of all giving happens during December. Not only that, but 12% of giving occurs in the last three days of the year. However, this doesn’t mean you can put off planning for the holiday season. More than half of all nonprofits start prepping for year-end giving as early as October.

Having this head start lets you remind donors a few times about holiday season gifts. You can also leverage Giving Tuesday in November to build momentum. For help designing a year-end giving campaign, take a look at this guide.

7. Connect With High-Quality Leads

High-quality leads are potential donors who have an interest in your cause, the means to donate, and a history of participation with similar organizations. In addition to making donations to your nonprofit, they may also be vocal supporters who attract more people through word-of-mouth.

However, finding and attracting these leads can be challenging. A tool like the BoardEx Diversity Network can help. BoardEx tracks senior leaders and decision makers across the globe who are part of 2,600 ethnicity-based membership associations. That’s over 18,000 executives, board members and senior managers who are or have been active in efforts to champion diversity and social justice causes.

As for getting in touch with these leads, forget about cold calling. Through BoardEx’s relationship mapping tool, you can see exactly how you’re already connected to these business leaders. Using your existing contacts and relationships, setting up warm introductions is simple.

BoardEx can also help diversify the executive team or board of your nonprofit. By selecting leaders who are already involved in ethnicity-based organizations, you gain access to their network of potential donors. BoardEx includes profiles of more than 1.5 million people across more than 2 million different organizations.

8. Nurture Planned Giving

Planned giving is a gift made during a donor’s lifetime or after their death. This is usually a large gift or portion of an estate given to a cause with which the donor had developed a long-standing relationship. Combine this with the fact that people usually begin thinking about planned giving when they near retirement age, and you’ll see that nurturing these prospects is a long-term endeavor.

The first step is to create a profile of your ideal planned giving donor. If you’ve received planned gifts before, you can use those supporters to create a look-alike model with WealthEngine.

Look-alike Model

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Look-alike modeling uses characteristics of your current donors to search for prospects with similar traits. Even if your database has spotty data, WealthEngine can draw on its sources to fill in the gaps.

Once you have a list of prospects, make it a priority to schedule one-on-one interactions with them. Annual events like galas are great for cultivating these sorts of relationships. For a comprehensive look at how to nurture planned giving donors, check out this guide.

If developing this process seems overwhelming, it’s helpful to remember that things you already do are likely nurturing planned giving. Even your youngest donors may be future planned giving candidates, which is why retaining them is essential.

The greatest wealth transfer in history is currently happening, with Baby Boomers and older Americans giving $30 trillion to their children, many of whom are Millennials. At the same time, Generation Z—the best education generation —is graduating college and entering the workforce.

 

Final Thoughts: The Right Data and Tools Pave the Way Forward

Don’t expect gifts for social justice issues to taper off any time soon. While events in 2020 and 2021 have galvanized support for diversity and race-based organizations, studies show there is long-term interest in these causes. Millennials and Generation Z are committed to supporting social justice nonprofits and are gaining access to wealth that makes their donations possible.

To attract this donor cohort, focus on making online donations easy and sending short, regular emails. Keeping younger supporters apprised of your organization’s activities is crucial for retaining their support.

You also need to develop a plan for nurturing planned giving donors. Gifts made at the end of life often depend on a long-term relationship with the donor.

WealthEngine makes it possible to attract more donations, no matter the size of your organization. Its prospect research tool simplifies the process of finding new supporters, whether they’re in Generation Z or nearing retirement.

To see how WealthEngine can help your social justice organization, get in touch for a free demo.

RelSci Acquired by Euromoney People Intelligence

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We are pleased to announce that our parent company, Euromoney Institutional Investor PLC, has acquired RelSci to complement the Euromoney People Intelligence offerings  BoardEx, WealthEngine and Wealth-X.

RelSci is a leading relationship-mapping data provider serving financial, professional services and not-for-profit organizations, with a global database containing over 9 million profiles of business leaders and senior management.

WealthEngine and RelSci have historically operated with a similar purpose; to provide unique, data-driven insights that empower organizations to effectively engage with the individuals who will have the greatest influence on their business.

We have established a market-leading team within People Intelligence and by including RelSci’s expertise, user-friendly platform and expanded dataset, we open the door to a number of additional ways we can improve value for clients.

Please note that WealthEngine and RelSci clients will not experience any disruptions or changes to their existing accounts – all existing subscriptions and account support teams will remain in place and separate at this time.

The acquisition of RelSci represents a significant expansion to the insights and resources Euromoney People Intelligence can provide to our diverse roster of clients and we look forward to sharing updates on how this new asset will help support and advance your organization’s goals in the future.

Take us with you! Introducing the WealthEngine Mobile App on the go

We are pleased to announce the launch of the WealthEngine mobile app, now available for iOS and Android users. Whether you’re on the go or on the couch, search for wealthy individuals from your phone in order to quickly access profile summaries and connections right at your fingertips.

Our free mobile app was designed to offer simplified remote access in complement to the WealthEngine platform by enabling users to:

  • Search the WealthEngine database of wealthy individuals by name, location and age.
  • Review summaries of matched profiles, as well as key profile details including demographics, net worth, liquidity and giving capacity.
  • Understand how an individual might be aligned with your existing network through profile connections.
  • Save profiles to your WealthEngine account to view later when you’re back at your desk.

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For more information on the WealthEngine mobile app, please refer to our Knowledge Article or contact your dedicated account representative.

A Comprehensive Guide to Reviving Annual Funds

Annual funds

The annual fund is the lifeblood of your organization. Dollars raised through this campaign allow your nonprofit to keep meeting its goals regardless of whether you won a new grant or secured a major gift. Consistent communication on behalf of the fund also keeps you connected with your donors and helps you grow roots in the community.

Unfortunately, reviving the annual fund often falls to the wayside. Between managing your core programs or writing grant applications, it can seem like there’s hardly time for anything else. All that can change with the right tools and techniques.

In this guide, we’ll get technical on how to easily identify prospects or upsell existing annual fund donors. You’ll also learn about direct mail best practices so you can increase your campaign’s return on investment. Once you start incorporating these strategies, you’ll be amazed at how regular annual fund appeals can bring you closer to your donors.

What Is an Annual Fund?

While its usage and definition may vary between institutions, an annual fund usually covers a nonprofit’s operating costs. Gifts to the fund come from individuals who receive direct mail from the organization during a campaign.

While it might be tempting to devote more time to applying for grants or nurturing planning giving prospects, don’t underestimate the power of individuals contributing to an annual fund. According to a report from Giving USA, in 2019 individual donors gave over $309 billion. This accounts for 69% of total giving and is the largest source of donations, beating out foundations, corporations, and planned giving.

Plus, an annual fund fueled by hundreds of small donors does much more than just keep the lights on. Consider these benefits:

  • Unlike grants, endowments, or capital campaigns, you can use the money raised for annual funds on anything your organization needs.
  • Annual funds keep donor participation consistent from year to year and help update patron data.
  • They establish financial patterns so staff can anticipate when and how much money might be available for miscellaneous projects.
  • Donors who contribute each year deepen their connection to the organization and might make good candidates for future major gifts.

Not only do annual funds allow organizations to continue pursuing their core mission, but they also provide donors with tax deductions and a sense of community. By regularly engaging patrons in this way, you strengthen the nonprofit’s long-term place in the community.

If your nonprofit is within a certain industry, you might find that your annual fund campaign will be more successful than expected. The same Giving USA report found that most charitable dollars went to organizations centered around religion (29%), education (14%), human services (12%), grantmaking (12%), and health (9%).

Before Launching an Annual Fund Campaign

Maybe your attention has been focused on getting grants and you’ve let the annual fund grow stale. Before you go all-in on a revival campaign, it’s important to identify which goals and metrics are most important for your organization. This will make it easier to monitor the fundraiser’s progress and make adjustments that increase the results of your campaign.

Common annual fund metrics include:

  • Total dollars – the total amount given to the fund
  • Total donors – how many individuals participated
  • Total gifts – this may differ from total donors, as sometimes people give more than once during a fiscal year
  • Average gift – measure this by dividing total dollars by total gifts
  • Participation rate – a percentage describing how many donors gave to the fund out of all the people who were solicited for a gift

There are many more potential metrics. However, too many metrics or too much time spent on reporting can result in “analysis paralysis”, hindering progress. 

To avoid this, check out the Data-Driven Annual Fund workbook. It can help you select the benchmarks that make the most sense for your nonprofit.

How to Identify Potential Annual Fund Donors

Not everyone who has donated to your organization is a good candidate for the annual fund. Here are a few techniques for analyzing your list of current and potential donors to identify the strongest prospects for your campaign.

  • Use Look-Alike Modeling

Take a look at who is already donating to your annual fund, focusing on those who represent your ideal donor. What characteristics do they share? Do they have similar incomes or careers? 

Use these data points to identify other prospects in your donor database you can reach out to during an annual fund campaign.

Of course, that might be too much data to deal with manually, even for a highly dedicated team. A tool like WealthEngine automates the process. 

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WealthEngine comes equipped with a look-alike modeling feature—called WE Prospect—that not only analyzes ideal donors, but also fills in the gaps if you have spotty data. WE Prospect then searches your database for prospects with similar characteristics and compiles a list for you.

  • Create a Donor Pyramid

A donor pyramid represents the total dollars needed to run your organization, not including grants. Donors are grouped into different tiers based on their level of engagement and/or gift size. 

Patrons with the lowest participation, such as those who give a small donation once, are grouped at the bottom. Those who contribute a planned gift from their estate are placed at the top.

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The annual fund is at the middle of the pyramid because it encourages smaller gifts donated yearly. These donors may have different levels of wealth, but they all have high engagement.

It’s possible to manually calculate how much you need to raise in each tier and how many prospects you’ll need to solicit to reach that goal. However, if you want to compare different fundraising scenarios with the click of a button, try out WealthEngine. 

WealthEngine includes a donor pyramid modeler that can determine how many prospects you need based on your fundraising goal. It then segments potential donors from your database into each tier. This information enables you to know who to reach out to for the annual fund and who is better suited for a different initiative.

This is important because you don’t want to send a generic message to people who aren’t a good fit for your annual fund. With a focused list of prospects, you can personalize your pitch and increase your return on investment (ROI).

  • Calculate Lead Scores

Perhaps you have a long list of prospects who would make ideal donors for your annual fund. A lead score can give you a better idea of who to contact first.

A lead score is a number between zero and 100 that describes how likely a person is to give. You can use it to rank prospects against each other so you know with one glance who you should reach out to first and who might not be a good fit for the annual fund.

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Lead scores take into consideration:

  • Demographics like age, income, education level, etc. 
  • Capacity to give
  • How interested they are in your organization, also known as affinity

WE Analyze helps automatically generate lead scores based on the criteria you set. It adjusts in real-time depending on how prospects interact with your website, email campaign, events, or other assets. The more prospects engage with your nonprofit, the higher their lead score will be, as this demonstrates greater affinity for your organization. 

How to Grow Your Annual Fund Through Direct Mail Campaigns 

Direct mail campaigns conjure up images of postcards and appeals sent through the postal service.  However, these days it also includes email marketing. Any form of correspondence where the recipient can reply to your appeal directly with a donation falls into this category.

There are a few best practices that will increase your campaign’s ROI.

  • Limit Direct Mail Recipients

Sometimes nonprofits approach direct mail with a “spray and pray” mentality. The idea is that by sending everyone in your donor pool an appeal, you’ll increase the amount you’re able to raise. However, this isn’t efficient and often prohibitively expensive if your campaign includes a physical component, like a letter.

Consider the case of an international religious advocacy group that partnered with WealthEngine. They had an existing donor pool of 500,000 people, but rather than send direct mail to all of them, they decided to nurture patrons capable of giving upwards of $7,000. WealthEngine built a model that zeroed in on 19 major gift donors to cultivate, leading to over $530,000 in new funds.

  • Make Tailored Asks

One way to increase your annual fund giving is to tailor your appeal for existing donors. You never know who might be open to increasing their yearly gift when asked. 

The Humane Society of the United States took this approach, using WealthEngine to identify existing donors with a greater likelihood and capacity to give. Specifically, they looked for millionaires that had been donating $17 to $18 dollars to the annual fund.

The search paid off. The Humane Society increased mid-level donations by 20% and grew the number of prospects in the ’Planned Giving Program’ by 49%.

  • Tell a Story in Your Appeal

When writing an appeals letter, try to tell a story that also communicates your mission. Stories are a powerful way to grab your reader’s attention and hold it. Consider this direct mail example from Save the Chimps, a chimpanzee rescue organization.

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Notice that this letter doesn’t rely heavily on statistics. Statistics may seem compelling, but they can actually distract readers from the heart of your message. It’s best to use them sparingly or when they clearly bolster your appeal. 

In this case, Save the Chimps only breaks out facts and figures to show what different gift sizes can accomplish.

Don’t forget to add images to your letter or campaign materials. Select pictures that encourage the emotions you want donors to feel when giving to your organization, such as joy and connection.

  • Personalize Communication Strategy

Not everyone is well-suited to receive an email or a letter. It pays to take note of which communication channels your donors respond best to, then make future appeals accordingly.

If you’re a small nonprofit or have the staff capacity, this could be as simple as recording whether a gift came through the mail or your website. However, most organizations don’t have that kind of manpower and will likely need to automate the process with software. 

WealthEngine can analyze your donor database to determine what communication strategies you should use to engage with certain prospects. You can then create segmented lists, sending physical mail to some and digital communication to others.

  • Look for Ways to Cut Campaign Costs

It’s often said that direct mail can cost $0.30 to more than $10 per person. It all depends on how many pieces of mail or content you send, as campaigns include costs like:

  • Designer fees for logos and branding
  • Copywriting
  • Printing costs if sending postcards or letters
  • Postage
  • Email marketing platform subscriptions

You can keep some of these costs down by relying on an in-house marketer for the copywriting or branding. There are some fees that are tougher to avoid, like postage or an email marketing platform.

Another way to increase your ROI is to host events virtually instead of in-person. Even as COVID-19 vaccination rates climb, digital fundraisers, such as auctions held on Zoom, have few upfront costs but can yield a big pay-off.

  • Make Appeals Year-Round

While making a year-end ask is important for reviving your annual fund, it shouldn’t be the only step. Look for ways to campaign throughout the year to stay connected to your donors. 

Fortunately, you don’t need to come up with a holiday or reason to launch a mid-year appeal. There are several local and national initiatives your organization can piggyback on. 

In New Orleans, for example, GiveNOLA Day occurs each May and encourages locals to donate to hundreds of participating nonprofits. Check to see if a similar project occurs in your city.

Be sure to take advantage of Giving Tuesday, which occurs nationally every Tuesday after Thanksgiving. This event has been around for so long, donors will likely expect your organization to send them an appeal. This is also a great opportunity for an email or social media-driven campaign, which can help keep costs low. 

Looking for more ways to optimize your annual fund campaign? Download this list of strategies and tips.

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It covers techniques like how to use merge tags to personalize your emails or how to host a virtual event, so you can fundraise year-round with minimal lift.

Grow Your Annual Fund, Grow Your Organization

An annual fund is a critical initiative for your organization. It provides unrestricted dollars to help fill in the gaps between grants and capital campaigns. 

The annual fund also keeps donors engaged with your nonprofit. Without it, interest in your mission may wane and it will be harder to reinvigorate support later on.

The most important element of an annual fund campaign is having a clear picture of who it is you’re targeting. Sending direct mail to everyone in your donor database is expensive and promises a low engagement rate. Using a tool like WealthEngine makes it possible to identify prospects with the highest likelihood of contributing or increasing their annual fund gift, saving you time while increasing your ROI.

Want to learn more about how this works? Get in touch for a demo and see how WealthEngine can help grow your annual fund.

How COVID-19 Affected Higher Education Fundraising, Future Forecasts, and Fundraising Strategies

Throughout the COVID-19 pandemic, the fundraising industry faced a year of unprecedented times and constant changes. The higher education sector saw a dramatic shift due to COVID-19 with the transition to online learning and virtual communication.

The Impact of COVID-19 on Higher Education Institutions 

Statistics showing the strain on higher education from COVID-19

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As the COVID-19 pandemic swept across the globe, higher education institutions were forced to deal with numerous challenges. Moving students off-campus and adopting a virtual platform for online classes quickly became top priorities.

  • Loss of Income Due to Virtual Learning

With most college students being vacated from their dorms and on-campus housing arrangements after their 2020 spring break, institutions faced an income loss. Entering into the fall semester, few colleges chose to try on-campus living. Many stuck to closed campuses with virtual learning.

A consequence of students living and learning remotely means no money is being spent on campus housing or meal plans. On top of these losses, colleges saw a drop off from income being raised during extracurricular activities. College sporting events, campus stores, and book sales took massive losses during the COVID-19 pandemic. 

  • Impact of COVID-19 on Alumni Relations

Another major area of income for higher education institutions comes from alumni donations. Depending on the school’s traditions, much of this fundraising is done through in-person events. This includes class reunions, alumni nights for athletics, and networking events.

Since the COVID-19 pandemic led to restrictions on in-person gatherings and events, alumni fundraising faced a new challenge to generate income. Just like virtual courses, higher education institutions have adapted their fundraising strategies for the digital world.

The Short-Term Outlook for Higher Education Fundraising

Flexibility is crucial when creating short-term solutions for the challenges higher education is facing during the pandemic. Income losses will continue until the end of COVID-19 from the lack of students on campus. Colleges and universities must adapt to make up the money elsewhere.

Development officers can benefit from donor engagement strategies. This means working with different departments in the institution to cultivate new donor relationships. It is also vital to maintain connections with established gifters. 

  • Shifting Higher Education Fundraising Priorities During COVID-19

In the wake of the pandemic, higher education fundraising has shifted toward a less isolated, more progressive agenda. Institutions must adopt elements of a solidarity approach to stay relevant with their donors.

Rather than focusing on the individual benefits of donations, COVID-19 has created a movement centered around giving for the collective good. Successful fundraising strategies will prioritize a social agenda within universities.

On top of these changing ideals, the structure of higher education fundraising is evolving. Without in-person events, the main form of communication with donors is through virtual marketing. Institutions are relying on digital platforms to share their message and cultivate donors. 

Instead of connecting donors, particularly alumni, with an institution’s location or experiences, digital marketing highlights the mission and brand. This shift is changing the priorities of higher education fundraising as it creates a need for a universally relatable mission.

Long-Term Predictions for Higher Education Fundraising

Bar graph demonstrating the major needs for financial support of institutions during COVID-19

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Institutions had to adapt quickly once COVID-19 hit, with a focus on short-term solutions to make it through the upheaval. However, there will also be long-term changes as a result of the pandemic.

Virtual fundraising strategies are here to stay. Although in-person events will slowly begin to resume as the pandemic ends, digital efforts will be more important than ever to stay relevant while fundraising.

Higher education will need to strike a balance between fundamental needs and donor interests. The COVID-19 pandemic has shown the struggles institutions are facing during fundraising as they continue to adapt to younger donors and changing social backdrops.

While universities will always need to fulfill their own essential fundraising goals, it will be crucial to account for the donor’s wants in the post-pandemic world. This stems from the surge of global outreach focused on the greater good during the COVID-19 crisis. Now, donors are comfortable with having a say in an institution’s mission, and fundraising strategies must adapt.

A push for focus on helping ease the burden of higher education on students rather than on the institution itself is a trend that will most likely stick after the pandemic. COVID-19 opened eyes to the  financial burden placed upon students, and donors have the opportunity to use their gifts to help.

In keeping with the idea of solidarity instead of philanthropy, higher education fundraising goals will balance between institutional needs and easing student debt burden. This includes a push for scholarship funding, health and wellness initiatives, and enhanced student services. 

Overall, universities will need to continue the work started during the COVID-19 pandemic to engage new donors and strengthen existing relationships. Athletics may be sidelined, as well as major capital projects, to make way for tackling donor wishes to better support students. 

Serving the Higher Education Community During Covid-19

Throughout the pandemic, higher education institutions have been expected to adapt and persevere despite the tumultuous times. Virtual learning has placed a strain on students and staff as they continue to navigate uncharted terrority. Universities are beginning to see traditions questioned as new strategies emerge.

The main focus of universities during COVID-19 has been placed on providing quality education in unprecedented circumstances. Campus life halted at the beginning of the pandemic, which forced institutions to shift priorities while serving the community.

Instead of kick starting capital projects like campus building upgrades or major renovations, higher education has adapted to meet the needs of their communities. This includes aiding their population with health and wellness programs, accessible COVID-19 testing, and virtual learning programs.

Fundraising Strategies During Pandemic Recovery

Focus on digital outreach across multiple platforms like Instagram and email campaigns. Virtual marketing allows higher education fundraising to stay relevant while reaching new audiences. Shift your messaging to share how your university is supporting the community during this time.

Recovery may be a long road as the pandemic fades, so flexibility will continue to remain crucial for successful fundraising. As students slowly begin to return to campus life, consistent branding and communication will help keep your donors engaged with your mission. 

 

Coping With COVID-19: Luxury Hospitality Brands

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Luxury hospitality brands have had to pivot and alter their business models, supply chains, and operations. Here is a rundown on the state of the luxury industry and where it’s headed: 

The Effect of the Pandemic on the Luxury Industry

Luxury goods and services saw deep declines in 2020 due to financial strains and lockdowns. While luxury retail stores suffered, some segments of the luxury industry thrived. Here are some effects of COVID-19 on the luxury industry:

  • The Rise of Luxury Consignment

Luxury consignment has gotten a boost from the pandemic as people had more time to clean out their closets. Luxury consignment is hip, cool, ethical, and environmentally friendly. Additionally, the ability to sell luxury items and get fast cash has been an appealing factor for financially-strapped Americans. 

ThreadUp notes reselling a piece of clothing extends its life by two years and has an 82% reduced carbon footprint. Luxury consumers care about how their clothes are made and its environmental impact. 

For example, that $1500 Hermes handbag in your closet can be sold for cash on resale sites Poshmark, ThreadUp, or RealReal. Over the last three years, the luxury resale market has outpaced new clothing sales by a 21:1 margin. By 2023, the luxury consignment industry is predicted to reach up to $51 billion.  

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  • Remote Service is Beneficial All-Around

COVID forced many luxury brand companies to change how they operate. Some shut down their brick-and-mortar stores and moved online. Others offered curbside pick-up, virtual appointments, and delivery services.

Consumers concerned about their health have turned to the safety and convenience of online shopping. The virtual nature of doing business also benefited companies with greater productivity and cost-savings. RealReal observed their salespeople booked more virtual appointments per day because they did not need to travel to physical ones. 

 

  • Online is Where the Sales Are

E-commerce skyrocketed in 2020 as homebound consumers took advantage of the convenience of online shopping. According to the U.S. Census Bureau, U.S. consumers spent $211.5 billion on e-commerce. Online shopping accounted for 16.1% of all sales in 2020 due to Coronavirus concerns. 

The Buying Habits of Luxury Consumers

Throughout the COVID-19 Pandemic, luxury consumers have altered what they buy and how they buy. With trips canceled, luxury customers had more to spend on items like home entertainment, fitness equipment, furniture, and home goods. The retail e-commerce market continued to grow in 2020 and will likely continue over the next few years.  

Online privacy, well-being, and family health were concerns for luxury consumers in 2020. The proliferation of online shopping has increased the risk of scams. Health and well-being were reflected in what consumers bought and their online shopping habits. 

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Short-and Long-Term Luxury Hospitality Industry Forecast

The U.S. luxury  industry shrank by 27%, to $73.6 billion in 2020 due to the Coronavirus pandemic. An Altagamma Consensus report notes that luxury stores experienced a 40% drop in revenue in 2020. In 2021, they should rebound by 8%. 

Many companies will maintain their online stores until customers feel comfortable congregating in large numbers. When that happens, brick-and-mortar stores will be experience centers. Stores will be sleeker and utilize AI automation to bring fast, personalized service. 

The North American luxury market will increase by 14% in 2021. Despite the positive outlook, 2021 will still have plenty of uncertainties.  Luxury brands can cash in on the spending consumers would otherwise spend on travel. 

While the pandemic has devastated the luxury hospitality industry, there is a glimmer of hope on the horizon. The rollout of COVID vaccines, federal economic interventions, and relaxing travel restrictions will bring luxury consumers back. The selling of luxury goods will remain online for many years to come.  

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Successful Marketing Strategies for Luxury Brands

The COVID-19 pandemic has changed the way consumers interact with luxury brands. To make up for losses, those in the luxury industry must adapt their marketing efforts. Here are some marketing strategies to implement for 2021 and beyond: 

 

  • Focus on Voice Search

Nearly half of all Internet searches are via voice. On a worldwide scale, 27% of those with Internet use voice search. In the U.S., 25% of Americans own a smart speaker that they use for browsing the internet.  

Asking Siri or Alexa a question is easier and quicker than typing a query into the search bar. Twenty-two percent of consumers purchased items online via voice search. This thriving sector is expected to become a $40 billion industry

 Search engine optimization for voice requires the use of long-tailed keywords and anticipates questions searchers will ask. The average search length is three words on mobile, six on a computer, and 29 words in voice search. You can alter your digital marketing efforts to accommodate voice through interactive Q&A, industry trivia, and customized product guidance. 

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  • Rally Behind a Cause 

Younger luxury consumers support brands that are active in making a positive impact in the world. Simply providing superior products will not cut it anymore for today’s luxury buyers. Brands must now prove they care about current issues like sustainable practices, social justice, online privacy, and ethical business practices.  

The heart of your luxury brand marketing plan must center around causes important to your customers. Luxury consumers are more likely to support brands aligned with the issues they care about.

 

  • Invest in Making Podcasts

Due to the lockdowns and stay-at-home orders, podcast views increased significantly. For entertainment and engagement, luxury consumers are hungry for audio and visual content, making podcasts a top 2021 marketing trend

Podcasts are great tools to inform and entertain customers while also boosting brand credibility, transparency, and trustworthiness. Podcasts can be in any format that is aligned with your brand and captures the interests of customers.Dior, Gucci, and BMW are a few luxury brands that have launched podcasts around social issues, influential women, and music. 

2020 was challenging for the luxury hospitality industry. Companies had to move online. The luxury industry will rebound, but brands need to gear up for voice search, podcasts, and advocate for a cause. 

 

 

The State of the Financial Services Industry in the Wake of COVID-19

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Even though we’re a year into the COVID-19 pandemic, the financial services industry continues to adapt and transform. Ever-changing social distancing protocols and market trends require companies like those in high finance to adjust quickly and often.

If you’re feeling overwhelmed and don’t know which strategies your company should focus on, keep reading. Below are the biggest ways high finance has adapted to the pandemic. We’ll also discuss the strategies that are here to stay and will make you more competitive in the future.

How High Finance Has Adapted to the Pandemic

The world of high finance, with its need for cybersecurity and constant communication, faced challenges with remote work that other industries didn’t. Meanwhile, market volatility increased customer dependency on financial advisors. Companies successfully responded to these and other obstacles with these strategies:

  • Working Virtually

Like many industries, the majority of the financial services sector shifted so employees could work from home. However, financial companies had to adjust in ways other businesses didn’t.

While the rest of the world uses software like Slack and Zoom to keep teams connected, those tools aren’t secure enough for finance. Alternatives like Symphony and Webex adhere to financial companies’ high security standards while keeping employees at home.

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In addition, organizations needed to come up with quick fixes for unique challenges. For example, Lulalend, a fintech startup in South Africa, had to keep employees in touch even as the country experienced challenges with the electricity supply. Their solution was to provide team members with USP battery backups to use during outages.

Overall, working virtually has gone well. PwC’s Remote Work Survey found that 69% of financial firm executives believe their employees are as productive working from home or even more so than they were pre-pandemic. However, the same survey noted that companies often struggle with bandwidth constraints and limitations with remote coaching.

  • Digital Prospecting

High finance transactions involve sums that require a deep level of trust between parties. That trust is usually nurtured through face to face interactions over time. 

Remote work has encouraged many companies to get creative about how they build those bonds. Some methods include:

  • Increased content marketing – Write emails or blogs that answer your ideal customers’ most relevant financial questions.
  • Participating in webinars – 72% of customers would rather learn through video.
  • Hosting virtual meet-ups – Give potential customers the one-on-one experience while social distancing.

Financial advisors have also exploded onto social media, sharing tips on LinkedIn and engaging with potential customers on Twitter. However, financial brands should be mindful about how they handle these platforms.

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In an op-ed for CNBC, Blair DuQuesnay, an investment advisor and financial planner at Ritholtz Wealth Management, notes, “Brand accounts do not garner as much attention, engagement or trust as individual accounts do. Firms that fail to recognize the power of the individual brand, or those whose cultures oppose the promotion of personal brands, will lose momentum on social media.”

Remember, prospects favor online interactions that feel genuine. This is easier when engaging with another person on social media instead of a faceless financial brand. 

For more on how you can optimize financial advisor prospecting during the pandemic, check out this guide

 

  • Increased Digital Communications Channels 

In such uncertain times, people want guidance and help on demand. This has led to a transformation in how companies and customers communicate virtually.

According to a survey of 2,500 enterprise decision makers conducted by Twilio, 60% of financial services companies responded to the pandemic by expanding their digital communications. This includes adding chatbots, live chat, and in-app chatting. The same survey found that on average, digital communication strategy schedules accelerated by almost six years.

Interestingly, the pandemic may have saved some financial businesses in the long run. Fintech companies were ahead of the curve when it came to adopting digital communications. Meanwhile, 69% of U.S. banking brands had average or below average digital performance. Lockdowns forced those institutions to pivot their digital strategy, bringing them up to speed with Fintech.

  • Analytic Software 

Data analytics have always been crucial for financial companies. The pandemic merely illuminated that. Changing circumstances have accelerated certain transactions, like selling stock, inheritances, and business sales.

Raj Khera, former Executive Vice President of WealthEngine, explains during this live Q&A that the best time to find new customers is before their major liquidity event, not after. This puts you in the position to advise them on tax breaks or other areas that will make their transaction smoother. Data analytics makes it possible to find those customers before they even realize they need your services. 

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With prospect research software like WealthEngine, you can screen a database of potential customers and look for certain characteristics. For example, Khera notes that in the next decade, millennials will increase their wealth by a factor of five as 20 trillion dollars in assets will be transferred to them. Data analytics software makes it possible to find those future customers and start building a relationship with them today.

The Future of the Financial Services Industry

Even as vaccines roll out, remote employees and online chatting are here to stay. 99% of financial companies in the Twilio survey agree that future opportunities for virtual work are possible. Meanwhile, 94% of respondents say they’ll keep expanding virtual communication channels even if the pandemic subsides.  

That being said, customers expect authentic connection with businesses despite communication moving to digital channels. Used well, technology facilitates those human moments. 

Video conferencing and webinars are only the beginning. Data analytics tools, such as WealthEngine’s WE Analyze tool,  lets you zero in on prospects who are the best fit for your services. 

This saves you time searching for potential customers so you can spend more of your day in one-on-one virtual meetings. Plus, you can find the prospects with the highest capacity, propensity, and intent to work with you.

WealthEngine makes this possible. Get in touch today for a free demo and see how WealthEngine can help you reach your goals during any financial climate.

 

The Impact of COVID-19 on Nonprofits and the Outlook for 2021

Impact of COVID on nonprofits

During a year of unprecedented times due to the COVID-19 pandemic, nonprofits and other businesses have dealt with waves of constant change and uncertainty. Throughout forced closures, months of remote work, and inconsistent reopening plans, nonprofits have constantly adjusted by implementing strategies like virtual nonprofit fundraising to stay afloat.

The Impact of COVID-19 on Nonprofit Fundraising

Impact of COVID on nonprofits through statistics

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All nonprofit organizations rely heavily on fundraising, especially through charity events, for operation. As the pandemic began to spread, many organizations had to adjust to remote work and face the harsh reality of event cancellations.

The beginning of the COVID-19 pandemic showed a bleak March and April. Most countries faced strict shutdowns and limited in-person interactions for essential business only. With heavy limitations on numbers for in-person gatherings, nonprofits began to shift their plans for scheduled fundraising events.

Forced closures of event venues called for previous fundraising plans to be revisited. Limited reopenings and event capacities also impacted plans while nonprofits were constantly adapting to the new guidelines.

Virtual Nonprofit Fundraising During a Pandemic

One of the major impacts seen by all industries during the COVID-19 pandemic was the sharp switch to remote working conditions and the cancellation of most in-person events. Adapting to these new conditions, nonprofits continue to strategize ways to make virtual communication effective.

Nonprofits that have successfully navigated through the pandemic relied heavily on digital marketing and fundraising tactics. Organizations switched their efforts to social media and email campaigns. Many planned in-person events became virtual fundraisers. Check out the previous link to download WealthEngine’s free step-by-step guide for successfully hosting these online events.

While organizations are still adjusting as new phases are implemented throughout different states, the emphasis on virtual fundraising allowed nonprofits to function during the pandemic. These continued efforts include virtual fundraisers, ongoing email marketing campaigns, and strategic social media content to keep donors engaged with the mission.

Effects of Remote Work on Nonprofits

As businesses shut down and employees began to telecommute, remote work became the new normal for most during the pandemic. This caused a heavy reliance on Zoom meetings, Slack, and email communications. 

The switch to remote work impacted the way employees performed their jobs. This change also caused adaptations in most aspects of daily life.

Working Remotely: Pros and Cons

The new normal that emerged in 2020 saw many employees navigating their new work-from-home environments with little preparation. The shift to remote work was abrupt, and organizations have begun seeing the pros and cons of having employees work from home.

Flexibility is a huge plus for remote work. Previously, many employees found themselves trying to balance their work and home lives, including things like child care and screen time hours. The lack of commute time and the ability to use their computer almost anywhere, means employees working remotely function on their schedules as needed.

Virtual communication can be a downside when working from home. Zoom calls and Slack messages make it hard for employees to connect. 

This can make collaborative efforts challenging. Without the usual office banter, workers can feel isolated and may struggle to effectively communicate with coworkers and complete projects.

Remote work presents another con due to the lack of work/personal life boundaries. Constant access to computers and no real separation between the office and home can make it difficult for employees to set clear working hours. 

Remote work has caused a shift in employee habits. Flexibility will remain a high priority for those working remotely long term.

Interacting With Donors

The COVID-19 pandemic halted most in-person meetings during 2020. For nonprofits that rely on donor interactions, this shift has impacted the way organizations communicate. 

While meaningful interactions with donors remain crucial to success, these conversations have moved online for the time being. Many nonprofit donors are seeing a shift to email and social media communications.

Content like newsletters and Instagram posts have played a huge role in keeping donors up-to-date. Virtual fundraisers have offered ways to connect and encourage continued contributions to the organization’s mission.

Due to the reliance on virtual communication, nonprofits have had to find new ways to engage with donors to maintain their relationships.

2020 Nonprofit Fundraising Statistics

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Nonprofit fundraising statistics play a significant role in predicting trends for the next year. With the unusual circumstances surrounding 2020, much of this data can be used to show exactly how the pandemic affected the nonprofit sector.

The impact of COVID-19 on nonprofit operations resulted in 75% of organizations making cuts to their budgets. This sounds concerning, but the ability to work virtually allowed for budget cuts that helped nonprofits stay afloat while adjusting to new pandemic guidelines.

During the second quarter, nonprofits saw a 7.2% increase in total donors. As the pandemic began to affect daily life, organizations were lucky to see more donors contributing to their respective causes. 

Overall, donations less than $250 saw a 19.2% increase. This means many organizations benefited from small donations made by new or existing donors during the COVID-19 pandemic.

GivingTuesday saw a 29% increase of donors on December 2nd with 34.8 million people participating in charitable giving. This led to a 25% increase in total numbers compared to money raised in 2019.

Despite a year of change and uncertainty, many of the statistics show a positive year for nonprofits.

Moving Forward: Long term Outlook and 2021 Predictions

As the pandemic continues to shape 2021’s economy, nonprofits will see the need for flexibility remain a key consideration in planning. With vaccine accessibility and downwards trending case numbers, it is possible for in-person work and fundraising to resume in 2021.

Nonprofits can expect an opportunity to build public trust in the coming year. There seems to be a continued trend with social justice movements and philanthropic giving. Virtual fundraisers and networking events may integrate into the new normal.

As the COVID-19 pandemic begins to wind down, nonprofits will continue to see lasting effects on their structures. Remote work may be the new normal, and digital engagement will remain important for donor retention.

Strategies for Nonprofit Membership Renewals

Membership is vital for the survival and continued functioning of any nonprofit organization. High membership numbers and their retention through membership renewals improve your organization’s effectiveness and ensure growth. 

There are many channels for increasing nonprofit membership renewals ranging from volunteering during fundraising campaigns to using professional agencies to track your potential customers and increase your organization’s brand awareness

Just 31% of offline-only first-time donors and 25% of online-only first-time donors are retained for more than one year. What is it that makes nonprofit membership renewals so difficult to retain? Are there ways to alleviate these issues?

Why Nonprofit Membership Renewal is Important

Nonprofit membership renewal is a constant, crucial process necessary to sustain your organization financially. Yet, nonprofits big and small alike typically experience a large percentage of membership turnover.

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Around 45% of all donors across the world are enrolled in a monthly giving program. Members of a nonprofit organization are generally more philanthropic than non-members. Thus, membership renewal is a vital contributor to an organization’s financial security.

Highlighting the Benefits of Nonprofit Membership

To appreciate the exchange that occurs between a nonprofit organization and a member, it is important for both parties to understand exactly what nonprofit membership entails. This will help the member understand all they are gaining through membership and the ways they can contribute to the success of the organization. 

By clearly defining the perks of membership and the important role committed supporters play in advancing the mission of your nonprofit organization, you incentivize strong renewal rates.

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  • Privileges

Make it clear what facilities, benefits, and other privileges members will enjoy as part of your organization. Will they be educating themselves by joining? Are there any new experiences they should look forward to? 

Whether members will be receiving a vote during the annual general meeting, a seat on the board, or simply a newsletter, remind prospects what nonprofit membership entails. 

Since many donors check histories and public records of organizations before opting for membership, it is very important to maintain transparency regarding what the organization has provided for its members in previous years. 

Provide specific examples of the benefits of membership via social media and include online testimonials as a means of building trust with your future members. Research shows that 72% of people trust organizations on the basis of online reviews and testimonials.

  • Duties

Nonprofit membership should be mutually beneficial to the member and the organization. Tell potential renewals and new members what they can do to aid your organization in its endeavors and how they can take full advantage of all membership has to offer.

Do you have donation programs in place? If so, make them transparent. Help members help you—they need clear guidance as to how they can promote your mission and vision.

Be it through membership drives, awareness-raising initiatives, or just gathering support, all members should have a detailed understanding of how they can further the goals of your organization. This will bring meaning to their membership and simultaneously boost the profile and activities of your organization. 

Membership contributions highlighted through social media reach a large number of your potential members. Therefore, it is important to look at your social media profiles, email campaigns, and newsletters regularly to analyze their impact on your membership renewal process. 

For example, if you notice that data-driven posts from your organization’s Facebook page get you more followers as compared to regular posts, then this shows your members are more inclined toward your organization’s progress numbers than its routine programs.

Strategies to Boost Nonprofit Membership Renewals

The chances for membership renewal increase when members are given complete clarity on the benefits they will receive from continuing their membership. They should also have an understanding of the benefits they would deliver to the organization. Thus, a two-way relationship is established 

You may use several effective strategies to boost nonprofit membership renewals:

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  1. Nurturing Members

Look after your members. Make sure a mentorship program is in place wherein senior members encourage new members to take an active part in events and organizational initiatives. This will help with the transfer of responsibility as junior members learn and grow into senior membership roles over time.

Nurturing members will help streamline the process of membership and ensure that your members respond positively to your requests for renewals. It will also act to create a bond between members and your organization. Renewals are more likely to occur when members feel that sense of connection with the organization and the people involved in it. 

  1. Looking to the Past

“Those who cannot remember the past are condemned to repeat it.” This is why it’s crucial to analyze data trends from preceding years and understand the shifts your organization has experienced in membership renewals. Factors you may want to consider include the average number of annual membership renewals, the average duration of membership, and activity (participation/donations) during membership.

You should also look at the demographics of your members—where and what age groups most of your donations are coming from. Analyze the reasons for this and consider how you can broaden membership appeal to a wider audience. 

Use donor segmentation to tailor membership renewal campaigns to groups with mutual backgrounds and interests to boost renewal rates among those demographics.

  1. Communication and Concerns

Make sure to promptly address any issues that arise with your members. Ensure that all lines of communication between your organization and its members are open and easily accessible. Proper and consistent communication goes a long way in avoiding misunderstandings. 

Making this extra effort demonstrates to your members that your organization appreciates them and prioritizes their concerns.

Be sure to request members renew via multiple platforms to ensure it remains top of mind. Nonprofit organizations have an email open rate of 25.50%, which means on average, three out of four emails you send will generally remain unopened. 

Using multiple communication channels increases the number of opportunities for you to remind members it’s time to renew. Tracking how existing members are responding to membership renewals can help you understand where miscommunication may be occurring and offer insight into where improvements can be made. 

Communication also allows you to understand if the renewal process is needlessly complicated. Streamlining the renewal process allows members to be comfortable and makes them more amiable. 

  1. Providing a 24/7 Online Membership Renewal Gateway

Sending your members email and text reminders with an attached 24/7 functional membership renewal link increases the likelihood of membership retention. 

Remember, membership renewal should be as simple and user-friendly as possible. Membership renewal that involves simple signup at a time convenient to your members is much more likely to be successful compared to a burdensome renewal process where members must navigate to your website and find a link themselves.

  1. Surveys

Surveys help you understand what your members want. They are a vital method of communication and validation. Surveys can also serve as a means to acknowledge donors’ expectations from your organization.

 A survey can collect important information that you can use to better understand what membership means for your organization. Careful consideration of this data allows you to see which members are more likely to be retained, enabling you to concentrate your efforts on these individuals.

Surveys may also assist you in identifying why some members choose not to renew. This kind of information is valuable for improving future member retention initiatives.

The fundamental keys to achieving positive nonprofit membership renewal rates are communication, remaining consistent and true to your organization’s mission and values, and making the renewal process as user-friendly as possible. 

To see how the WealthEngine W9 platform can assist your nonprofit membership renewal and acquisition efforts, sign up for a free trial today!