A Realistic Look at Annual Funds
Find those SYBNTs with the best combination of high recency and high frequency. Focus on them like you focus on LYBNTs. Set goals for each segment of this group, design targeted strategies for the group and work to achieve the goals. A statistician can build a grid based on your donor records that segments your SYBNTs strategically. Use recency as one axis and frequency as the second in the grid. The upper left cell will contain those who have the longest giving record and the shortest lapse. The lower right cell will contain those who gave only once many years ago. Work from the upper left first toward the lower right. Identify how many you need to reacquire to compensate for LYBNT attrition, and target accordingly. Think about real numbers for these goals. “More” and “as many as possible” are not helpful unless you have infinite resources to invest in the effort. The key here is to budget finite resources to achieve specific goals — strategies are not strategies if they are vague.
4. Understand the average size of gift not as a question of money. Rather, it is a question of loyalty and engagement. Not everyone can or will increase his or her giving every year. In fact, if someone just made a significant increase last year, you risk sending him a message of ingratitude by asking for another this year. The donor might not hear you are grateful for that increase, but that you consider it to have been too small. In a typical annual fund, about a third of returning donors increase annually — loosely translated that means it takes about three years to grow into a giving level psychologically. Until the donor gets comfortable with this new giving level, you run a risk of pushing her out, rather than up, when you push. Build your segments and target your messages accordingly.