Donor engagement tactics in 2020 are all about retention, building lasting relationships, and sustainability for your nonprofit.
The 2010s were a wild decade for philanthropy. The nonprofit sector started the decade hobbling along after a recession, then recovered and pulled out ahead, experiencing unprecedented growth in 2016 and 2017. What do the 2020s hold? How will the state of philanthropy shift? Will there be another recession that has nonprofits shuttering their operations? It’s obviously too soon to say, but as you gear up to fundraise in 2020, it’s important to consider the nonprofit sector’s history as you plan your nonprofit’s future, and consider donor engagement tactics that will create lasting impact.
What’s New in 2020?
2020 is a unique year for philanthropy in a few important ways that will have a direct impact on your fundraising. Let’s break it down.
The Way People are Giving Has Changed
2017’s Tax Cuts & Jobs Act caused shockwaves in the nonprofit sector because it increased the standard deduction. That meant the bar for people to give to charity was higher as well, because their write-offs needed to exceed the standard deduction in order for itemizing to make sense. There was a lot of speculation that this would cause a seismic shift in charitable giving, even dissuading some major donors from giving, but that does not seem to have been the case in 2018 or 2019.
The new donation strategies
What did happen as a result of the Tax Cuts & Jobs Act is that people who give at higher levels gave differently, instead curtailing their giving altogether. Instead of giving a large donation near the end of the year, right before the tax deadline, major gift donors have had to get clever to make the most of the tax benefits of donating to charity. Here’s are a few ways these donors scaled the higher part for tax deductibility:
- “Bunching” — Instead of giving one large gift at the end of every calendar year, some donors gave the amount they would have given in a two-year period at once. This allows them to make a bigger donation and claim a bigger tax deduction on the years they give, without changing the overall amount they give. This strategy requires donors to think ahead, and your nonprofit will need to do some planning to account for this new giving tactic too so you’re not left in lurch when a big donation you were expecting didn’t come.
- Donor-advised funds (DAFs) — DAFs are probably nothing new to anyone working in nonprofit development, but they’re becoming more popular since the 2017 tax bill. That’s because a DAF allows you to put a lump sum into it, claim immediate tax benefits, and then make donations to charities they choose as grants.
- IRA rollovers — This is a smart tax strategy for retirees, and something Mightycause saw more of in 2019. By donating money to charity right from their IRAs, donors subject to required minimum distributions (RMDs) from their retirement accounts can contribute to their favorite causes from their IRAs, which helps keep their adjusted gross income lower (so it doesn’t affect benefits like Social Security and Medicare.)
These aren’t game-changers and likely only affect a small number most nonprofits’ donors. But it’s still important for nonprofit professionals to be familiar with these techniques — especially as it may mean you no longer just get a big check from certain donors in December.
2020 is an Election Year
In case you haven’t heard, there’s a presidential election in 2020. And historically, presidential elections have had a measurable impact on charitable giving, for better or for worse.
In 2016 – 2017, there was tremendous growth in the nonprofit sector, according to the M+R Benchmarks report. “Online revenue was 69% higher than in 2014,” the found. In 2018, there was a huge downturn in revenue growth, largely because the growth we’d expect to find in 2018 actually happened ahead of schedule, in 2017. “If this is the case, it could be driven by the political reaction to the 2016 election,” among other reasons.
Yep, that was a real thing! Many nonprofits saw a big jump in donations after the 2016 election. This was called the “Trump Bump” by some in philanthropy, because it seemed to benefit certain type of work specifically in reaction to the election. There was a notable increase in the number of recurring donations after the 2016 election as well.
While we have not seen that a significant amount of charitable donations diverted into political giving, it is simply unavoidable that political campaigns and the election can draw some of the focus away from charitable causes. Political campaigns have lots of money behind them, and some of the best fundraisers in the country working for them. So, a strong donor engagement strategy is particularly important in election years. The competition for their attention will be stiff. And you don’t want your message to get lost in donors’ inboxes.
Donor Retention Remains Low
This is nothing new for 2020, but donor retention across the nonprofit sector remains notably low. For several years, nonprofits have been retaining less than half of the donors they acquire. In 2018, the number was 37%. We’re still waiting to see what the sector-wide retention rate was for 2019.
Nonprofits on Mightycause can track their donor retention rate, and access a comprehensive donor retention report, to build a strong strategy for retaining donors.
Donor Engagement Tactics for 2020
So, with all of that in mind, how do you tackle donor engagement in 2020? What should you focus on? These strategies will help you engage donors better in the year ahead, and beyond it, too.
Focus on Retention
A retained donor is an engaged donor. So, hunkering down and focusing on donor retention efforts (as opposed to ramping up acquisition) is no-brainer here. (And should be one of your key donor engagement tactics in any year.) Here’s how to make donor retention a priority in 2020.
Take stock of where you are
Again, Mightycause users have all the tools they need at their disposal to start focusing on donor engagement.
Start by accessing your donor retention report on Mightycause, finding your donor retention rate, and exporting your list of unretained donors. Sometimes backtracking through a few unretained donors’ histories can also help you identify where you may have lost them. When was the last time you contacted them? How did you contact them? What did you say? There’s enough information in your donor retention report to help you figure out where your nonprofit is currently at with donor retention, to help you plan to move forward.
Create a donor retention plan
Once you’ve got an idea of where your nonprofit is with donor retention, sit down with your staff and make a plan for donor retention in 2020. Here’s what to include:
- A goal — Now, it’s important to note that it’s unrealistic to aim for 100% or even 70% donor retention. So set a donor retention goal that is achievable, such as increasing your donor retention by 5%.
- Donation follow-up plan — How are you reaching out to donors when they make their donation? When do you follow up after they make their donation? What’s your follow-up ask? Plot out the course of your post-donation interactions to make sure you’re trying to engage your donors and move them own the pipeline.
- Ongoing engagement plan — How are you going to engage your donors throughout the year? Things like an e-newsletter, a quarterly phone call, or events can help keep your donors engaged throughout the year.
- Re-engagement campaigns — Donor retention requires ongoing maintenance. Think through how you’ll identify donors in danger of lapsing, and plan campaigns to check in with donors who have lapsed to get them re-engaged.
Love the ones you’re with
So, amid a sea of one-time donors you’re trying to retain, you likely have a bunch of donors who give faithfully. Whether they’re recurring donors who give monthly, or those awesome people who can be counted on to give to every campaign, they’re donors you can count on. But just because they can be counted on does not mean you can take them for granted! These donors can be lost, too… through neglect.
Come up with a plan to keep these donors engaged. Whether it’s giving them shoutouts in your your newsletter, starting a “Donor of the Month” program, showing them gratitude in your lobby, or organizing a happy hour to thank them, make sure these donors feel the love. Otherwise, they may be lost to attrition.
Move Donors into Other Areas
One of the secrets of donor engagement is ramping up their involvement in your nonprofit incrementally. For instance, someone may start out making a one-time donation to your nonprofit. Then, as part of an onboarding email journey you’ve set up, you get them to make their donation recurring. And then you invite them to a volunteer info session, and they become a volunteer. During #GivingTuesday, you ask them to start a peer-to-peer fundraiser, and they end up raising $500 for your organizations. And at that point: You’ve got ’em. They’re enmeshed in your organization, and they’re not likely to go anywhere.
Here’s how to pull off this masterful donor engagement hat trick.
Volunteers are essential, especially at small nonprofits. And volunteering is a nice non-monetary ask. Instead of asking for more donations and more money, you’re asking for time and effort. Volunteering tends to be extremely rewarding for those who do it, and volunteers often make friends and build social connections with one another. (Some people even meet their spouses through volunteering!) So, it’s a win-win! And often, all you need to do to turn a donor into a volunteer is ask:
- Email invite — Including a link to your volunteer application or volunteer opportunities is a great follow-up email for new donors, especially as part of an onboarding journey! And if at first you don’t succeed, check in again throughout the year.
- Info session — Try hosting an in-person session where people can learn more about volunteering for your organization, and invite donors. People largely donate because they care about their cause, so meeting in person helps to forge a personal connection and give them the information they need to start volunteering!
- Volunteer application — If you don’t already have a generic volunteer application, create one and make it available online. Asking people to fill one out (totally optional) can help you get to know them, their interests, and their skills. Even if you don’t have a specific job for some folks, you might be able to find, say, a graphic designer who can help with your fundraising materials, or a web designer who can help with your website.
- Mightycause’s Volunteer Management tool — Did you know Mightycause has a tool you can use to post volunteer opportunities and manage your volunteers?! We do! It’s available to all Advanced subscribers and can help you get started recruiting volunteers.
Peer-to-peer fundraising is a low-bar, non-monetary ask. It can be done from home, and on Mightycause, even from a smartphone. It doesn’t require a specific time commitment, or showing up somewhere, or manual labor. So, it’s a pretty easy ask that pays dividends. Not only does it get a donor to bring in new donors and raise money, it gets them publicly involved in your nonprofit!
If you need an intro or refresher on peer-to-peer, we’ve got you covered! Download our FREE ebook all about peer-to-peer fundraising to learn how it works, and how to start turning donors into fundraisers!
Teams & Events
Teams & Events are peer-to-peer fundraising, kicked up a notch. The big difference between a regular peer-to-peer campaign and a team or event is that it’s multiple people coming together to raise money for your cause. Not only do Teams & Events raise more money than standalone campaigns (about 30% more, to be exact), they inspire friendly competition and camaraderie. And that helps people get invested and stay invested in your work.
We have a wealth of materials on this very blog that dive deep into the weeds of Teams & Events, along with ideas for Team & Event fundraisers!
Focus on Recurring Giving
If you want to build a sustainable nonprofit organization, recurring gifts are essential. When a donor gives on a recurring basis, you’ve got their long-term investment. And retention is, obviously, built into a recurring gift.
Here are some things you can do to boost recurring giving in 2020, and make sure you keep these rockstar donors engaged.
So, there are a handful of things you can do easily today that will help you get more recurring donors:
- Embed or update your widget — Last year, the Mightycause widget got a serious upgrade. The widget is a free but powerful way to collect donations on your website. Donors can set up recurring monthly donations through the widget. So, install or update your widget to capture more recurring donors! And if you haven’t been using the widget, get it up on your website to make it easy as be for supporters to set up a recurring donation! (They can also make a regular, one-time donation, of course.)
- Update your Suggested Donation Amounts & Descriptions — All nonprofits on Mightycause can customize their suggested donation amounts in their checkout flow and add a short description of what each amount provides. Why not updates yours to focus on recurring giving?
Start a recurring giving program
It’s the perfect time to launch or refresh your recurring giving program! We have a guide to help you learn how to launch one.
Donor engagement tactics for recurring donors
As we mentioned earlier, it’s important not to take your tried-and-true supporters for granted, and that definitely includes recurring donors. If they don’t feel appreciated, they can easily slip away. These donor engagement tactics for recurring donors will help you keep these key donors engaged and giving.
- Get their opinion — Everyone likes to feel heard! Get your recurring donors talking about their experience and what’s important to them by creating a survey, hosting annual town hall meetings, or just calling them up to ask how you’re doing. Opening up a dialogue can help your nonprofit get valuable feed while engaging these important donors.
- Shout them out — People also love getting shout out! Dedicate a spot on your website, your e-newsletter or printed newsletter, or even in your lobby for appreciating your recurring donors. You could even consider starting a “Donor of the Month” program to make donors feel special.
- Host events — In-person events are a great way to deepen the relationship between your nonprofit and your donors. Consider semi-regular happy hours for donors, things like having guest speakers, lunch-and-learns, workshops and so on!
Watch the “Donor Engagement Tactics for 2020” Webinar!
These are only a handful of donor engagement tactics to consider for 2020. We presented even more donor engagement tactics in our most recent webinar about this topic. Check it out for extra tips!