Trends in Giving Tuesday Fundraising Strategies for 2021

giving tuesday ideas

Trends in Giving Tuesday Fundraising Strategies for 2021

October 25, 2021
WealthEngine

Retaining current donors and drawing new supporters is key to the health of any nonprofit. Participating in GivingTuesday, an annual day of charitable giving celebrated worldwide, can help you accomplish both goals at once while raising funds.

Even organizations with limited staff and resources can take advantage of GivingTuesday. This guide covers data-backed strategies that are easy to implement in time for the late November campaign.

What is GivingTuesday?

GivingTuesday is an international day of awareness created in 2012 to encourage a culture of generosity. It takes place each year on the Tuesday after Thanksgiving.

Often stylized as #GivingTuesday, organizations typically leverage social media networks to spread awareness about their mission and make appeals. Some nonprofits also fundraise offline, using traditional tactics such as direct mail.

Nonprofits that participate in GivingTuesday can see significant returns on investment. In 2020 alone, organizations raised almost $2.5 billion during the campaign, a 25% increase from 2019 totals.

Both local and nationwide nonprofits have seen tremendous success as a result of Giving Tuesday campaigns. For instance, in 2014, the Michael J. Fox Foundation raised nearly $400,000 from over 1,600 donors for Parkinson’s research. In 2020, Dillard University in New Orleans raised over $780,000.

Donation Trends for GivingTuesday 2021

A study from GivingTuesday Data Commons found that despite increases in new donors, newly retained donors, and recaptured donors, donor retention was down in 2020. This was true for donors of all gift sizes.

Source

This implies that many donors stopped supporting one nonprofit in favor of giving for the first time to another. The COVID-19 pandemic and the racial justice movement likely played a role by influencing shifts in interests and concerns. For instance, the same study noted decreases in donations to arts and culture organizations and increased giving to health and human services nonprofits.

That being said, some experts contend giving trends could return to pre-pandemic levels in 2021. Regardless, the data suggests that this GivingTuesday, organizations should focus on retaining small and mid-size donors acquired in 2020 in addition to attracting new supporters.

Strategies for GivingTuesday 2021

These techniques will help you engage both existing donors and attract new ones on GivingTuesday:

  •  Get Clear on Who You’re Targeting

Before devising a GivingTuesday campaign, it’s important to clarify what kinds of donors you’re targeting and how best to reach them. A service like Wealth-X can analyze your donor database and provide market insights about your small and mid-size donors from 2020.

Wealth-X can also help you identify prime new donors by answering vital questions such as:

  • Where are our ideal prospects located?
  •  What are the common traits of prospects in these areas?
  • How familiar are these prospects with our brand?
  • What content can our marketing team create to attract and activate these prospects?

The data is then consolidated into an analytics report that can inform your marketing decisions.

Source

Once you know who you’re targeting and what characteristics define them, you can then begin to design a campaign tailor-made to appeal to their interests.

  • Make Your Campaign Unique

Thousands of organizations participate in GivingTuesday. Distinguish yourself by putting a spin on your campaign. For best results, keep the interests of your ideal donors in mind and look for ways to gamify the experience.

For example, since 2015, the Enoch Pratt Free Library in Baltimore has hosted the “Book Bowl” during the week of GivingTuesday. To capitalize on love for the local NFL team, the Baltimore Ravens, Pratt Library goes head to head with the library from the town of that week’s opposing team. The library that receives the most donations between the football game’s kickoff and midnight on GivingTuesday wins.

Source

In 2017, when the Ravens had a game against the Texans during the week of GivingTuesday, Pratt Library competed against Houston Public Library. Pratt Library won the contest, securing more than $53,000 from over 150 donors.

  • Garner Interest With Email and Social Media

GivingTuesday coincides with the start of the holiday season when people are typically very busy. As such, it’s vital to start dripping emails and social media posts weeks before in order to build enthusiasm for the fundraiser. Plan to draft marketing copy in October, then gradually increase the frequency of posts leading up to GivingTuesday.

Depending on what software you use for securing gifts, you can give donors the option to schedule a donation for GivingTuesday. Let supporters know during your lead-in campaign that this service is available.

Source

This takes the pressure off the donor to remember to give the day of, allowing them to participate on their own schedule.

  •  Create a Recurring Donations Program

During GivingTuesday, give donors the option to automatically donate a small amount monthly. This increases donors’ overall donation and gives you an opportunity to connect with them throughout the year.

For instance, plan to automatically send an email thanking them after each recurring donation. You can also craft personalized emails that share news about the projects funded by their gifts. This lets donors see the concrete impact of their donations.

  •  Design a Year-Round Donor Engagement Plan

When it comes to keeping donors engaged after GivingTuesday, sending regular emails is only the tip of the iceberg. Different gift tiers will need to be engaged throughout the year in different ways, like being invited to program demos or galas. Come up with a plan now so you’re prepared to follow up with them once GivingTuesday is over.

How WealthEngine Maximizes Your GivingTuesday ROI

WealthEngine is a tool that allows nonprofits of every size to better understand and act on their prospects. These techniques are applicable during GivingTuesday and beyond. Reuse them for year-end giving, capital campaigns, and more.

  • Better Understand Your Prospects

As your donor base grows, keeping all that data up-to-date is a full-time job. WealthEngine automates the process by detecting and correcting inaccuracies. With data cleaning, you always have the most current email or mailing address on hand.

WealthEngine also enriches data, giving you a more complete view of donors and prospects. The tool draws from 60 sources and 300 million profiles on individuals. With this information, you can understand donors’ wealth, income, lifestyle, and affinities.

WealthEngine Prospecting

Source

With better data enrichment, it’s easier to group donors into ultra-targeted groups. As we’ll discuss shortly, these groups make it possible to predict campaign outcomes and even increase the size of gifts.

  • Analyze Your Audience

WealthEngine digs into your donor list and generates actionable insight to help you identify your top prospects. It also scores and ranks individuals so you know which prospects are ready to be engaged during your GivingTuesday campaign and which ones you can likely pass on.

Using your best donors as an example, you can also use WealthEngine’s database to find new prospects with similar attributes. Their donor score updates in real-time as they interact with your organization’s website or email marketing.

  • Design Your Donor Pyramid

WealthEngine can predict the outcome of campaigns using donor pyramid modeling. For example, you can forecast how many prospects will donate within a specific gift tier or you can anticipate donation ranges for each prospect.

Source

The modeler works by first building a unique formula for your organization’s donor base. It then generates a score to compare prospects against. Finally, it splits your donor list into ten deciles that illustrate individuals’ lifetime value and probability of being retained.

Source

This bird’s eye view of your list makes it easier to target people who are the appropriate match for your GivingTuesday campaign.

  • Make Tier-Appropriate Asks

You wouldn’t ask a prospect who falls into a lower decile within the donor pyramid for a $100 gift. Likewise, your “true believers” probably aren’t expecting you to ask for $10 this GivingTuesday. Plan to personalize your requests based on the tier a donor falls into.

To simplify the personalization process, use a combination of email templates and targeted email lists with donors grouped according to tier or decile. This way, you only need to adjust the size of the gift request within the body of the email, then automatically send it to the appropriate list.

  • Use Email, Social Media, and Press Release Templates

While you can create your own email templates from scratch, customizing existing templates can save time. This GivingTuesday Toolkit not only includes email templates but also social media and press release examples.

Using templates keeps the focus on essential information and frees you to spend more time on high-touch tasks, like connecting with major gift donors in person or over the phone.

Start Planning Now for GivingTuesday

GivingTuesday is one of many ways to activate donors throughout the year. It helps you attract new donors and engage existing supporters, increasing retention.

Wealth-X helps you zero in on who you should target during GivingTuesday and how to engage them. With this data-driven information, your marketing team can strategically design a GivingTuesday social media campaign. Once the campaign is over, Wealth-X can analyze your donor database and organize gifts by tiers, giving you a better idea of what engagement strategies you should use to engage individuals in the months to come.

Get in touch today for a free, personalized demo and learn more about how Wealth-X can help you exceed your fundraising goals.

The Next Generation of Wealth

The Next Generation of Wealth

October 11, 2021
WealthEngine

Whether you’re in the non-profit or for-profit industry, millennials, those between the ages of 24 and 40, are likely not the last group you think of as being wealthy. While only 12% of the world’s population of ultra-high net worth individuals, those with a net worth of $30m and more, are under the age of 50.  Millennials are in fact a growing and influential proportion of the wealthy.  

 

Age based on percentage of population and wealth

Source 

It can take many years, if not decades, to build substantial wealth. Most of the ultra-wealthy are between the ages of 50 and 70 and it is those individuals over 70, who hold the highest percentage of wealth.  

With most of the ultra wealthy over the age of 50, why should your business or nonprofit invest in younger populations, including millennial millionaires?  

The millennial generation will continue to grow and become a larger proportion of the wealthy as the baby boomer generation continues to decrease. In the future, many of your wealthy patrons and donors will be those who are currently millennials.  

Despite the pandemic and its economic impact, the wealth of ultra high net worth individuals grew by 2% in 2020. With the heightened digitalization from remote working and online shopping in 2020, wealthy individuals under the age of 50 saw the most financial growth. The wealth of millennial millionaires contributed to two-thirds of the total ultra high net worth wealth growth, the largest of any age group.  

Wealth by age group

Source 

Investing in millennial millionaires now has the potential to pay off big in the future. However, many organizations do not yet have this minority of wealthy on their radar as potential donors or investors. Taking the time to build relationships with them now will make them loyal donors or patrons later.   

When you become familiar with their passions and interests, valuable relationship-building forms. Over time, millennial millionaires will keep your organization at top of mind. This increases the likelihood of them supporting you when they accumulate more wealth.  

How do you engage with wealthy millennials? Like their non-high-net-worth counterparts, those between the ages of 25 and 40 have unique interests.   

Who Are Millennial Millionaires?  

Very high net worth millennials, those with a net worth between $5m and $30m and those with ultra-high-net-worth, $30M+ have a different makeup than the older wealth cohorts. Some key observations about the characteristics of wealthy millennials include:  

The wealthy millennial VHNW group features the highest concentration of women. 

 Gender of millennial millionaires 

Source  

 

For most millennial VHNW individuals, their wealth is self-made. 

Sources of wealth for millennial millionaires

Source 

Over a fifth of VHNW millionaires have gained their wealth through the banking and finance industry.  

Top 5 primary industries of millennial millionaires

Source 

 

The Interests of Millennial Millionaires 

The interests of very-high-net-worth and ultra-high net worth millennials vary from their older counterparts. The amount of wealth accumulated, and life stage are the two biggest reasons for this difference.  

Top 10 interests and hobbies of millennial millionaires 

Source 

 Despite the millennials’ modest share, examining their current interests provides an insight into emerging trends and the likely interests of the future wealthy. 

VHNW millennial interests differ significantly from those of the general VHNW population.  

These millennials’ top 10 interests include travel, music, food and animals, none of which feature among the leading pursuits of the general VHNW population.  

Sports, technology and travel come top.  

Sports, technology and travel are more important to VHNW millennials compared to the rest of the population, and there is a much higher degree of engagement.  This is likely a reflection of the group’s interests but also of the advantages of their age and relative health. Technology also ranks much higher with VHNW millennials than non-millennials, with younger individuals more likely to be involved with tech innovation in their leisure time and working lives.  

Millennial Millionaires are also expanding on their interest in travel and entering the world of private aviation.  A Wealth-X Spotlight on Private Jet Owners finds younger wealthy are more interested in owning very light and large private jets.  

Very light jets are typically the entry point for first-time plane owners. As one accumulates more wealth, they tend to buy larger planes. Some millennials (especially those with inherited wealth) go straight for the large jets if they can afford one.  

Philanthropy is important but comes lower down the list than for older VHNW individuals. 

Millennial Millionaires are likely to be focusing on their careers at this stage of their Lives. As their net worth rises with their age, and they choose to spend a greater proportion of time on more personal and emotive ambitions — such as creating a legacy and giving back to society — we find this interest tends to increase in popularity. 

Causes Millennials Care About 

Millennial millionaires are generous donors. According to a Wealth Engine report, 56% have donated to charities. This number is higher compared to the 35% of non-wealthy millennials who donate to causes.  

This growing populations is more likely to make significant donations to charity now, rather than waiting to accumulate more wealth. Some of the causes wealthy millennials care about include:  

  • Education 
  • Civil rights/racial discrimination  
  • Employment/job creation 
  • Healthcare reform  
  • Climate change 
  • Immigration  
  • Wages 
  • Poverty and homelessness 
  • Mental health and social services 
  • Women’s rights 
  • Criminal justice reform 
  • Early education 
  • Sexual orientation-based rights 
  • Literacy 

Wealthy millennials give to nonprofits that earn their trust by being transparent. For them, a sign of trust includes being informed as to how their contributions help make an impact. If they don’t know how their donations are being used to meet a need, 75% of millennials will stop giving.   

Besides making online monetary donations, millennial millionaires are more likely to be activists. Instead of using social media, millennials will participate in marches and contact their local representatives to bring about change. More than any other generation, wealthy millennials can put themselves into the shoes of others who are different from them.  

 Engage Millennial Millionaires Now  

While millennials make up the smallest segment of very-high and ultra-high-net-worth individuals, they should not be overlooked. Millennials will become the largest proportion of the wealthy, and their interests, the causes they care about, and their giving practices should not be overlooked. Businesses and nonprofit organizations who want to succeed must build relationships with these individuals now.   

Connecting with millennial millionaires can be a challenge for any for-profit or nonprofit organization. Wealth Intelligence solutions like Wealth Engine can help by providing valuable insight and expertise in building relationships with the wealthy.  

WealthEngine’s proprietary WE Search wealth screening platform makes it possible for you to personalize your donor targeting strategy by using advanced data analytics from 60 sources to search 300 million profiles and 122 million households. WealthEngine compiles the insights gathered from this data into its user-friendly Wealth Signal feature—a visual indicator that displays a prospective donor’s income, real estate holdings, net worth, estimated giving capacity, donation history, and personal network. The Propensity to Give (P2G) score is a proprietary tool that indicates the individual’s propensity for general philanthropic giving. 

Using WealthEngine’s wealth screening tools allows you to pinpoint prospects most aligned with the values and mission of your charitable organization and most likely to be willing to support its endeavors. Learn how WealthEngine can help take your fundraising initiatives to the next level by requesting a free demo today. 

Venture Philanthropy: Is it a Worthwhile Investment?

fundraising campaign ideas

Venture Philanthropy: Is it a Worthwhile Investment?

July 12, 2021
WealthEngine

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.

Adding Tomorrows infographic

Source

 

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

 

Source

 

  • 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.

 

Source

 

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.

 

Source

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

WE-GivingTrends-BlogPreviewsq

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

June 21, 2021
WealthEngine

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

Source

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

Source

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

Source

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

Source

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

Source

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

Source

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

REL SCI Logo

RelSci Acquired by Euromoney People Intelligence

May 24, 2021
Courtnee Davis

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

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

April 21, 2021
WealthEngine

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.

Find on the App Store

Find on Google Play Store

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

A Comprehensive Guide to Reviving Annual Funds

April 16, 2021
WealthEngine

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. 

Source

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.

Source

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.

Source

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.

Source

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.

Source

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

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

April 14, 2021
WealthEngine

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

Source

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

Source

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

luxury consumer demographics

Coping With COVID-19: Luxury Hospitality Brands

March 29, 2021
WealthEngine

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.  

Source

 

  • 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. 

Source

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.  

Source

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. 

Source

 

  • 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

financial services marketing

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

March 26, 2021
WealthEngine

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.

Source

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.

Source

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. 

Source

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.