Mastering an understanding of the real value of your donor base—along with the segments and audiences within it—is critically important for both fundraisers and nonprofit leaders.
That’s because your donor base is one of, if not the most, important financial assets that your organization possesses. You cannot sustain your mission or expand your programs without financial resources.
NextGen’s recommendation for how to manage your donor base portfolio is to simply think like an investor.
If you consider your donor base as you would an important financial asset, then take a similar management approach by starting with some easy questions:
- How does your donor base portfolio break out in terms of % of donors and % of revenue?
- Which segments produce the highest short-term yield to help with cash flow and current year budgets and is that revenue enough to meet organizational goals?
- Which donors produce the best long-term sustainable value? (We recommend focusing on retaining major donors and monthly sustainers.)
- How long does it take to produce positive ROI on acquisition across various channels?
- Which channels/campaigns/offers produce donors with the highest lifetime value?
- How are you measuring attrition rate across various segments both in terms of donors and revenue?
- What is the net outcome of upgrading and downgrading by segment?
Like a financial instrument or a mutual fund, it is important to balance yield, sustainable long-term value, and growth in coordination with the needs and goals of your nonprofit.
Having the answers to the questions above can help align fundraising strategy with mission, marketing, and financial strategy and make decisions that move your organization forward. Fundraisers and nonprofit leaders should always have a detailed understanding of which segments deserve more investment and which ones are a drain on resources.
Let NextGen Help:
NextGen consultants can help you place value on your donor base segments and interpret the trends that drive short-term yield and long-term value. Let us partner with you to design the best approach forward to helping you meet your organizational goals.
Interested? Get started with a free DIG Donor Base Trend Analysis, and we’ll get you on your way to thinking like an investor!