Harvesters Benefits From the Bounty of Data Analytics
Challenge: Maximize donor prospecting and retention
Solution: Segmentation based on donor activities
Results: Reactivated donors increased by 65 percent and dollars from this segment more than doubled; cut unprofitable prospecting without the need to trim the acquisition budget
For 20 years, Harvesters - The Community Food Network has been fighting hunger in the Kansas City, Mo., area. And for the past year or two, it's been facing the challenge that nags at all nonprofits: how to maximize donor relationships for better performance. The food bank's database of 40,000 individual donors and 8,000 corporate donors has been built mainly through direct mail efforts but also represents a chunk of the organization's many volunteers and event participants. Just how deep that connection ran was something Harvesters needed to find out to better structure its donor relationship program.
A couple years ago, Director of Fund Development Angela Heer partnered with direct marketing consultants Alan Weber, principal of Data to Strategy Group, and Bob Merrigan, president of Merrigan & Co., to take a different approach to donor segmentation. They started with the premise that people who are involved in multiple ways with a nonprofit are more likely to be advocates who will give more and for longer with the proper communication stream.
By analyzing four years of data across four different databases—fund development, volunteers, food drive and product donations—Weber and Merrigan were able to discern some significant patterns of activity. For example, 12.5 percent of individual donors respond to multiple appeals and generate 33 percent of Harvesters' revenue. Of these donors, those who respond to two or more appeals give three times more than the average donor; those who respond to three or more efforts give 10 times more. What's more, this segment of loyal advocates also is more likely to increase its contributions from one year to the next. Finally, the retention rate for donors who also volunteered is 70 percent. On a corporate level, the big aha was finding out that 12 percent of these donors also volunteer, with a retention rate of 80 percent compared to just 51 percent for firms that only donate.