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Background
Like many charities, Welcome Hall Mission kept a record of every donation but struggled to meaningfully utilize that data to improve fundraising results. As their direct mail fundraising agency, we knew that their data held the key to improving results. Over the many years that we worked together, we more than doubled their direct response fundraising revenue. One of many strategies we used came straight from our fundraising data team.
One thing that makes Frontier so uniquely effective is our crew of experts who specialize in multiple areas of fundraising. Our in-house Data Specialists passionately crunch numbers and increase revenue wherever possible.
The Question
Thousands of donors give generously to Welcome Hall Mission every year, but why do they donate the amounts they do, and would they be giving more if we asked for more? When we set ask amounts, how do we know if we’ll “over ask” and scare off potential donors or “under ask” and miss an opportunity?
It’s questions like these that lead us to hypothesize about new potential ask strategies.
Previously, we sorted donors into segments using the recency, frequency, monetary-value algorithm (RFM). Once segments were determined, another algorithm set the ask amounts for each grouping. Our data specialist then manually adjusted those results to take into account the psychological or location-based factors that the algorithm may have overlooked.
Setting an ask amount is not an exact science. These amounts can be determined by multiple variables. We consider the following metrics:
the average contribution
the median contribution
the most common contribution
the highest previous contribution
the most recent contribution
the minimum contribution
Tweaking ask amounts often causes a seesaw effect between response rate and average donation. Asking for too much can mean fewer donations overall, but asking for too little can mean smaller gifts. Segmentation helps determine the appropriate ask for groupings of people but creates a one-size-fits-all approach per group.
The Test
With groupings of donors, it’s unavoidable that some recipients receive ask amounts outside of their comfort zone. That’s why there is always an open ask included, where donors can fill out an amount themselves. However, research has shown that ask amounts can either influence gift size or discourage gift giving altogether. In other words, ask amounts wield the power of suggestion, which can be very useful to an NPO’s bottom line. But is there a way to avoid playing the odds and tailor our asks to each individual donor? Enter, the test.
We concentrated on 3,000 donors from Welcome Hall Mission’s 2018 Easter appeal as a sample size. The control group, along with each of the 2 test groups contained volumes of 1,000 people.
The 1st test group retained the segmentation but based the ask amounts on the median contribution for each donor segment.
The 2nd test group removed segments entirely and provided each recipient with a set of personalized ask (or Bespoke Ask) ask amounts based on their most recent contribution.
The Results
When the results came in, we noticed a few things. Firstly, our test proved previous theories to be true: the group of median-based donors performed better on the response rate, but worse on the average gift than our control group. Secondly, we found that most grassroots donors gave more when their ask amounts were personalized to their specific donation history.
One detail stood out among the rest. Not only did the bespoke ask amounts achieve the highest average gift, but they also maintained a higher response rate than the control group! Our Data Team attributes a large part of this breakthrough to the psychology of suggestion, which cannot be utilized as effectively when working with fixed ask amounts or generalized segmentation across a broad donor base.
What do all these numbers mean for Welcome Hall Mission? Our Data Team’s strategy of customizing amounts to individual donors produced an increase of approximately 15% in revenue for the Mission! And as you know, a few dollars more from thousands of potential donors adds up to make a significant impact on the Montrealers being served.
The Power of Data
Personalized giving amounts elevated donor response and boosted revenue, but it wouldn’t have been possible without the proper analysis of the data at every point. A 15% increase in giving from this change alone is proof of the remarkable impact that data-driven, psychology-informed fundraising strategies can have on giving.
Most charities are sitting on data that could increase giving. But they need the right team to analyze that data, communicate it clearly, and streamline the process for actionable results.
If you’re ready to explore how you get get your data working for you, let’s talk. Partner with Frontier nonprofit marketing agency today to start raising more money!
