Beyond Omicron: 5 Fundraising Strategies To Consider In 2022
At charities around the world, Omicron is authoring a new chapter in the ‘managing uncertainties’ playbook. It is by no means easy to focus on strategy whilst juggling multiple operational issues, from ensuring campaign continuity to predicting government action and its impact on fundraising.
During pre-pandemic days, individual giving across all channels, specifically face-to-face, had seen continuously strong performance, with donor acquisition consistently outstripping donor attrition, and yielding donor base growth. However, multiple lockdowns, some at national levels, precipitated a sudden reduction in new donor acquisitions. Some charities were less affected, especially those with a diversified channel distribution in recruiting donors. Nonetheless, despite the report cards from over the last two years, charities must look beyond the immediate operational concerns and start planning for longer term sustainability of their regular give programs.
Over the past two years, one of the fundamental realisations was the importance of examining our donor management strategies. In 2022, charities will need to precisely categorise their supporters’ new behaviour patterns and adjust their fundraising approach accordingly:
1. Understand the lasting changes to donor behaviour. Certainly, face-to-face acquisition is still alive and well in the digital era. However, there is little doubt that how we live, and work has evolved dramatically since COVID’s inception in 2020. Looking ahead, current donor behaviour can be linked to technologies that offer the most daring breakthroughs in the hybrid fundraising experience. That promise can come packaged in perplexing hype, whether it’s with some non-fungible tokens (NFTs) or the increasing use of e-Wallets. However, it would still be wise to evaluate all the various uses of e-commerce technologies, digital payments and emerging tools. At the very least, charities should be able to offer multiple payment options so the digitally savvy donor can contribute consistently and securely in their preferred method.
2. Fully adapt to the new realities. We’ve all learned ways of doing more with less during the pandemic. Maximising donations from existing donor bases and reducing donor attrition while coming up against stagnated growth in face-to-face acquisition. Considering that in 2022, charities will likely encounter in-person acquisition pressures, efficiencies from new ways of fundraising need to be realised to their fullest extent. On maximising donations, key areas for driving improvement involve asking for the right amount from the right segments, reaching out to the right people at the right time, and reducing downgrade and cancellation triggers. All in all, donor segmentation is critical to improve sustainability without creating insupportable cost increases. Specific targeting strategies will require effective and regular data housekeeping. When there are systems to support, segmenting is made easy. And, as the donor base grows, so will donor segments, making it more efficient to succeed with donation upgrades.
3. Diversify acquisition channels. In 2022, innovation in all its forms will be crucial, and a few stand out. The first is the exploration of diversified funding models. In this case, it means charities can explore the option of using telemarketing to expand their revenue streams. Although the outcome varies for each case, focusing on the correct donor or lead segments allows telemarketing strategies to be more personalised, which delivers better success in donation requests. The second is a conversion campaign targeting donors who have given multiple one-time gifts to become monthly givers. Certainly, regular giving donors have a higher Lifetime Value (LTV) over time because a consistent donation for a certain period, such as 1 year, 2 years, or even 5 years, is higher than a lump sum donation for one time. The third is reactivation calls to donors who cancelled or lapsed. Restarting these donations is one of the most crucial segments in the charity’s existing base. These telemarketing strategies tap into donors who have given previously and as they are already aligned and supportive of a charity’s social cause, the success rate is likely to be higher.
4. Foster “donate better” sustainability. Focusing on donating better can give charities a continued funding momentum and improve sustainability without creating additional insupportable costs. Even at the largest and most well-known charities, annual attrition rates can run as high as 30% of the donor base. Therefore, it is crucial to retain the most valued donor segments. Focus on providing donors with options that suit their personal circumstances and preferences so that they will continue giving. Often, donors do not realise that alternative regular giving plans are available, and it is up to the charity to inform them. In some cases, donors may prefer to donate less. A lower monthly gift is still a better outcome than losing the donor altogether. Furthermore, retaining an existing donor is far easier than trying to acquire a completely new one.
5. Retain donors despite the turbulence. The flux in the charity sector at the start of 2022 is hard to overstate. To mitigate the effects of churn, it is crucial to give every chance for a donor to make their donation for the month. Aside from cancellations, donors can become lapsed due to failed payments caused by insufficient funds, expired payment methods and other banking anomalies. Hence, to maximise opportunities for successful donations, it is important for the charity to have a strong payment optimisation strategy.
Increasing the payment reject window may increase the realised rate as it allows more time for debit failures to be fixed.
The frantic start to 2022 is unlikely to be followed by an abrupt slowdown. Another COVID wave might be one of the year’s few constants. This emphasises the significance of charities codifying what they’ve learned in the year about managing channel diversity and payment-processing-centric initiatives. And should we encounter another unexpected twist, they can swiftly adjust the playbook. Despite its operational obstacles, 2022 will bring opportunities for charities that can keep their eyes on the broader picture.
A clear realisation is that a donation is not the last thing on the list after the household bills. So, while giving through traditional methods is challenging, it is not because of donor sentiment. A sustainable fundraising strategy not only requires a strong acquisition and retention program but also needs to be highly flexible in optimising traditional operational processes and designing personalised and responsive donor stewardship programs. And only then, onwards with confidence to overcome uncertainties that may arise.