Wealth data can improve lifetime value of donors

How wealth data appends can dramatically improve lifetime value

Avatar

I’ve worked with dozens of nonprofits of all shapes and sizes in various capacities over my career. Everyone from small local nonprofits providing services addressing homelessness to private universities to global nonprofits that operate on every continent (ok…so not Antarctica); smaller organizations with $500k annual budgets to massive organizations flirting with $1 billion in annual support.

Some nonprofits are more efficient at fundraising than others. And by efficient, I don’t mean they have the best ROI or raise the most on an annual basis. I mean they aren’t “leaving money on the table.” (In case you’re curious: most efficient doesn’t necessarily mean the highest budget.) What I really mean by “more efficient” is how well they’re able to connect with their supporters to inspire them to give at their maximum potential.

I’ve pounded this into your brain here on the Virtuous blog a million times: knowing your donor should be priority numero uno. It’s the foundation upon which all communication is built. If you don’t know who you’re speaking to, how do you know what to say or ask for?

One of the things I haven’t yet touched on is using wealth data overlays as one possible way to “know” your givers. For those unfamiliar with wealth data overlays: first, check out DonorSearch… they’re amazing and Virtuous has a direct integration with their web services (BONUS POINTS!); and second, think of it as a way to get financial metrics on your current or potential supporters like: household income, total assets, real estate value metrics, age, and other organizations they support (and at what levels). The list goes on and on.

Let’s take a look at two totally real organizations that are in no way fake: OldSkool.org and WayOfTheFuture.org. Both receive a generous $50 gift from Mrs. Jane Peabody. But that is where the similarities of their relationship with Jane ends.

  • OldSkool.org immediately sends a really well-crafted and timely “thank you” receipt; WayOfTheFuture.org immediately appends wealth data after receiving Jane’s $50 gift, sees that she typically gives $1,000 to similar organizations and sends a handwritten “thank you” notecard with a personal message about how her gift will impact the organization’s mission.
  • Because they use best practices, OldSkool.org drops Jane in their normal direct mail/email communication stream asking for a $35 gift each month based upon her RFM score. WayOfTheFuture.org drops Jane into a Potential Major Donor communication stream. She receives monthly communications about the organization’s impact and what supporters’ contributions accomplish. She also receives a personal phone call from a Donor Rep ten days after her first donation. The two talk about why Jane gave and what she’s passionate about.
  • Over the next year, OldSkool.org gets three more $35 gifts from Jane as part of their normal donor communication plan. Four total gifts with a life-to-date total of $155 in just 12 months… not too shabby. During the same time period, WayOfTheFuture.org received one $500 and one $1,000 gift from targeted major donor development mailings, and a commitment from Jane to give $3,000 in the coming year.

If I were the Director of Development at OldSkool.org, I’d feel pretty dang proud (and I should!). I’d thank my team for all their hard work and would probably get a pat on the back myself. I followed all the industry best practices to a T and it paid off. Just look at the results: a generous new giver with four gifts in the first year! No nonprofit on the planet would NOT want a new giver like Jane.

But obviously, when you take a closer look at the data and do a quick compare and contrast between the OldSkool.org and WayOfTheFuture.org, the results start to look a little lack-luster.

If the giving levels outlined above hold true over the next 5 years, Jane will have a lifetime value of $755 with OldSkool.org and $12,650 with WayOfTheFuture.org. With the wealth data overlays, WayOfTheFuture.org also has the insights and opportunity to put Jane in touch with their Director of Gift Planning for a potential bequest from Jane’s estate. Same person, but two dramatically different experiences and results. Because WayOfTheFuture.org used data appends and scoring to understand Jane from the get go, her impact and connection to them resulted in nearly a 17x LTV.

To learn more about wealth data appends, check out DonorSearch. I promise you’ll like what you see!

Raisers Edge and Virtuous demo

Take a tour of the Virtuous Platform

Learn more about how the Virtuous can help you save time and build better relationships with your donors.

Take a Product Tour