Did you know that nearly eight out of ten new alumni donors don’t give again the following year? Or that it’s even lower if they are graduating seniors? If not, stop reading this right now and start reading this year’s donorCentrics® Higher Education Alumni Giving Report. If so, then you probably already know that this means it is more important than ever to develop key strategies for prioritizing and keeping your best donors, reactivating those who lapsed, and acquiring donors who will not contribute to the “churn.”
Watch the donorCentrics® 2018 Annual Report on Higher Education Alumni Giving webinar featuring Shaun Keister, PhD, vice chancellor of the University of California-Davis, for the online presentation of the Index of Higher Education Fundraising Performance.
As you begin to think about your strategy and goals for next fiscal year, it’s good to spend some time understanding the current climate and key metrics within higher education fundraising. To do that, let’s examine some key findings from the most recent Alumni Annual Giving report, a comprehensive analysis produced each year by Blackbaud Target Analytics. The FY2018 analysis features median metrics from the over 200 institutions that participate in the annual donorCentrics Collaborative Benchmarking service.
Alumni donors are consistently giving more each year to their college or university. While indeed donor counts were down for the fourth year in a row for private institutions and third year for public, revenue continued to increase for both groups. Therefore, we can presume that an increased focus in leadership annual giving, widespread adoption of second ask programs, and the addition of giving days are all influencing a smaller cohort of donors to give more.
Another crucial ingredient in the mix for programs is the adoption of multi-channel or even omni-channel marketing strategies at higher volumes throughout the year. While the increase in outreach through multiple channels makes it more difficult to attribute the motivation for the gift, the most successful programs remain those whose distribution of gifts come relatively evenly from mail, phone, and digital or online channels. By employing these strategies, institutions typically see an increase in revenue per donor, gifts per donor, and particularly in the case of leadership giving, an increase in the percentage of donors giving at the crucial $1,000+ level. As the 2018 report shows, once donors reach $1,000, 77% of them continue to give the following year. Unlike some metrics in this analysis, there is little difference between public and private institutions.
This report unpacks some of the key ways these strategies have had an impact on retention, reactivation, acquisition and donor migration (upgrading and downgrading). To build your own strategies, forecasts or set goals, you’ll need a clear understanding of your own trends within these areas and more importantly, what may be impacting these trends. For this reason, the analysis reveals first-year vs. multi-year donor retention, or more specifically what sets apart a donor giving for the very first time with one who is more committed. As schools dig deeper into the data, they may also take this down another layer. For example, what are the trends of first-time donors who made their initial first gift at the $25 level? If you find that less than 20% of these donors returned (i.e. less than the first-year donor retention rate), something is not working. Rethink your investment and stewardship strategies for this group next year. You can continue investigating these segments to determine the impact of areas of focus and decisions. You can also use this to identify key pockets that may need additional investment.
Giving Days are another important area to review for strategic planning. Blackbaud Target Analytics began studying the impact of giving days in 2016 and the data continues to present an increasing compelling case for their success. The percentage of donors taking part in a giving day has increased each year and the retention rate for giving day donors continues to be higher than other donors. Though not included in this analysis, reports produced for customers who take part in donorCentrics collaborative benchmarking show that giving days attract alumni of variety of class decades and appear to be a successful way to get students to give back as well. Additionally, in reviewing individual results, some schools are finding that giving days are their best means of reactivating lapsed donors. This is significant in that reactivation of lapsed donors continues to be one of the biggest challenges seen in the annual report.
Finally, it’s always good to understand the overall fundraising landscape and study trends outside of higher education. Because Blackbaud Target Analytics holds benchmarking groups for other types of nonprofits, we’ve been studying the rampant donor growth in 2017 and the bounce-back to reality (though still growth compared to previous years) in 2018. Additionally, we’ve had the opportunity to do in-depth analysis on sustaining or monthly donors. We highlight some of this growth, along with the ridiculously high new donor 13–month retention rate (that’s the percentage of sustaining donors still giving 13 months after their acquisition) in a webinar and the impact these donors have had overall. While anecdotally, we know that a handful of schools within the Higher Education sector have established recurring giving programs and multi-channel marketing efforts to recruit these donors, the reality is that the majority of the market has just not embraced the monthly donor model. That means there is a tremendous up-side and potential for growth yet within this industry and perhaps key area of focus in strategies for the upcoming year.
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