How to Grow Your End-of-Year Appeals in a Bad Economy

As economic conditions worsen, Dataro customers from around the world have shared with us the challenges they are facing in forecasting appeal revenue.

Depending where in the world you are, as much as 30% of all charitable donations take place in December. So the end-of-year fundraising push is an opportunity to secure vital fundraising dollars that will help your nonprofit meet the increased demands on services during an economic downturn.

With the all-important end-of-year appeals now in the planning stages, we thought it would be a good time to share some thoughts on how to give your charity the best chance of reaching your end-of-year appeal targets.

Even as inflation continues to squeeze your donor’s capacity to give, you can still plan an end-of-year appeal that achieves fundraising targets with these simple strategies.

Tip # 1 – Be clear in your communications

Of course, the demand for charitable services doesn’t decrease as prices go up. Depending on your cause, it is likely that demand on your services will actually increase as more people are impacted by inflation and face economic hardship of their own. That’s why the Charities Aid Foundation refers to the cost of living crisis as a “perfect storm” for charities. Once again, fundraisers are asked to do more with less.

It is also important to remember that your donors’ philanthropic instincts or desire to give has likely not lessened, although for many their ability to give will be reduced during times of economic downturn. This usually means donors will reduce the number of charities they give to, not the amount they give to a charity.

It is critical that fundraisers craft a compelling end-of-year appeal narrative and carefully communicate the impact of inflation on their cause to increase the chances of a gift. It’s important for your donors to understand your end-of-year appeal is an opportunity for them to maintain or increase their impact and help ensure the financial viability of your cause.

Tip #2 – Ask for more, not less

The other issue for charities is that the donations received just don’t go as far as they did last year. So a donor who gave you £100 last year is actually giving less to your cause if they give £100 again this year. Although many donors might not think about this!

In the context of a crisis you shouldn’t be afraid to ask for more from your committed donors. 

For some organisations, this has translated into a new ask amount strategy. For instance, asking donors to increase their gift to account for inflation has been a common suggestion, rather than using a typical approach based on their last, maximum, or average gift amount.

Asking donors for the right amount is also an effective way to increase response rates and total revenue. To help charities come up with a more effective way to find the best ask amount, we have added a recommended ask amount propensity to our Dataro Predict solution, which uses AI to calculate the optimal ask for each donor to help grow overall appeal revenue.

By making sure your end-of-year appeal message is highly relevant and clearly articulates the increasing demands on your charities services, as well as the impact of rising costs on services, charities can help donors to understand the impact their donation will have compared to last year. Donors can then adjust their gift accordingly. 

Tip #3 – Use analytics to target your campaigns more effectively

Rising costs focus our attention on the need to cut wastage, especially in more expensive marketing channels. They also highlight the need to measure our performance, so we know what is and what is not working. Of course, this does not mean cutting investment in fundraising altogether. History has shown that in times of financial turmoil, charities that lean in to their fundraising are able to weather the storm better. Reducing investment in fundraising will almost certainly have a significant negative long term impact on an organisation’s ability to fulfil its mission. Instead, we recommend measuring the impact of your fundraising investments and reducing costs only in areas that aren’t working whilst increasing investment in areas that are.

For instance, many Dataro customers have successfully reduced the costs of their appeals whilst increasing appeal revenue. In essence, they have sent less mail but raised more money. During times of inflation, that’s exactly what charities should aim to do.

How? By using their data more effectively to target their campaigns. In a bad economy charities and nonprofits that move away from inefficient communication strategies based on broad donor segments towards a more targeted approach, using machine learning, will reap the rewards. This is a simple change that has a big impact. It allows the charity to focus on the donors who are most likely to give.

Here are some recent examples of charities who are using AI-powered donor targeting to get more gifts in their appeals, while sending less mail:

• Canteen increased net revenue by 13-14% 
• Parkinson’s UK increased net revenue by 23% 
• St Helena Hospice increase net revenue by 8.6% 

Smarter fundraising and predictive analytics have a lot of other benefits, including helping you manage donor attrition and identify the best profiles for new acquisition. Using reporting tools like Dataro’s Fundraising Intelligence to track the performance of your fundraising campaigns – including critical metrics like net revenue – also allows you to identify the areas that are performing well – so you can make informed decisions about future fundraising initiatives.

Tip #4 – Focus on growing your mid-level and major giving

Inflation affects everyone, but people with more of a buffer tend to feel the impact less acutely than those without. Your mid-value and major donors are motivated to make an impact, particularly during a crisis and usually have the means to keep supporting your cause. This reliable cohort of donors are likely to help your charity during tough times and the good news is that there are probably more of them than you expect in your existing donor pool. 

So whilst ensuring that your fundraising team is focussed on cultivating strong relationships with these donors, machine learning tools like Dataro can also be used to find the hidden ‘gems’ in your database that may be in a position to give more. Developing a robust mid-level or stewardship pathway for these donors is a key strategy to tackle a forecast decline in the volume of smaller gifts. Find out more about building a mid-level program here.

Your end-of-year appeal is a key conversion opportunity for many potential mid-level and major donors. Developing and implementing your communication and stewardship plans now means you are more likely to be ready to ask and your donors more likely to give in time for your end-of-year appeal.

Ready to use data-driven fundraising tactics to plan your end-of-year appeal?

This is by no means a comprehensive list of tips for planning an effective end-of-year appeal in a bad economy. We’d love to hear from you with other tactics and strategies you’re developing to grow revenue in your end-of-year fundraising push.

So please come along to our webinar on 22 September (UK, 10am BT) or 28 September (US, 10am PT) where we will be discussing appeals in more detail and sharing more ideas to help you plan an effective -end-of-year appeal.

Unable to attend a webinar? You can  book a 15 minute demo with our team to learn how data-driven fundraising technology like Dataro can help you plan your most successful end-of-year appeal yet.