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Donor segmentation: An overview and 5 standout tips

May 13, 2020
This unsegmented group of nonprofit supporters is smiling at the camera.

Your nonprofit organization’s communications are most impactful when they’re tailored to your supporters’ needs and interests. Keeping supporters engaged relies on forming strong connections and making each individual feel valued. Instead of using a one-size-fits-all approach, make your outreach more personalized by segmenting donors.

Donor segmentation leads to more meaningful interactions with your supporters, which in turn can help you develop a stronger fundraising plan and grow your nonprofit’s impact. In this guide, we’ll walk through an overview of donor segmentation and share some tips to strengthen your organization’s strategy.

What is donor segmentation?

Donor segmentation is the process of dividing your organization’s supporters into groups—or segments—based on shared characteristics. It’s essential for effective donor management for nonprofits of any size and in any vertical.

The donor segmentation process typically involves three steps:

  1. Determine supporter demographics. Consider factors such as age, location, education, family status, and wealth.
  2. Analyze engagement data. Examine the ways in which supporters have interacted with your nonprofit (donating, attending events, volunteering, etc.), how frequently and recently they’ve engaged, their average gift amounts, preferred communication methods, and motivations for supporting your organization.
  3. Assign donor segments. Group donors based on the demographic and engagement characteristics they have in common. For example, one segment could consist of older recurring donors, while another segment may include younger supporters who enjoy volunteering and attending fundraising events.

Every nonprofit should have a unique donor segmentation strategy to address its individual needs. Let’s look at some tips to help you adapt the steps for your organization.

5 donor segmentation tips

1. Develop meaningful donor segments

As you begin segmenting donors, determine which groups are most relevant to your organization’s goals. For instance, newer nonprofits might not have a significant major donor segment yet, while organizations that support certain causes will need to factor advocacy campaign involvement into their engagement data.

Create sample donor personas for each of your largest segments and refer back to them as you create targeted communications. Also, use your nonprofit CRM to add custom fields to your donor profiles so you can tag each of them as members of specific segments.

2. Adapt your segmentation strategy to your nonprofit’s priorities

Your goals will shift as your nonprofit grows, and your donor segmentation strategy should evolve accordingly. Re-evaluate your donor segments by regularly asking these questions:

  • How have our organization’s goals changed since we last segmented our donors?
  • Which of our current donor segments are most relevant to those goals?
  • Are any major segments missing from our database?
  • Do we need to address any additional gaps in supporter data?
  • Have we applied donor data productively?

If you find room for improvement in your strategy, it’s worthwhile to re-segment your donors. Donor segmentation leads to more effective relationship-building efforts and greater fundraising success when your segments align with your organization’s current priorities.

3. Create an action plan

Your donor segmentation strategy should guide your organization’s interactions with supporters. After segmenting your donors, consider some ways to apply the data you collect. For instance, you could:

  • Track donation form completion rates across different segments to gain deeper insight into online and mobile giving patterns.
  • Monitor interactions on various social media platforms to create content that appeals to your audience on each site.
  • Compare email open rates to see which donor segments read the most emails from your nonprofit.

Use these considerations to create an action plan that breaks down your different donor segments, records relevant questions about each segment’s engagement with your organization, and outlines how you’ll answer those questions. This resource will help your team collect more useful data to evaluate your efforts over time.

4. Build your fundraising strategy around donor segmentation

Your completed plan of action should inform your nonprofit’s fundraising strategy. As you decide on your fundraising initiatives each year, review the previous year’s data and consider your most important donor segments’ preferences.

For instance, you might plan event fundraisers based on which segments would find them most appealing. If your major donors enjoy attending formal events, inviting them to an annual gala could help retain their support over time. But if you notice that a growing number of supporters have young children, you might also host a fun run or family-friendly movie night fundraiser to engage that segment.

To look at another example, your organization needs to engage all of your donor segments on Giving Tuesday to bring in critical year-end funding. Many nonprofits create #GivingTuesday social media campaigns, which younger audiences often prefer. However, your older donors may be more receptive to a direct mail solicitation. Appeal to both segments by creating multiple types of content and adjusting your messaging for each channel based on their unique interests.

5. Address your volunteer segments

When nonprofits segment supporters, they often focus on donors to boost fundraising results. However, your segmentation strategy can also help you understand and engage with volunteers, who help further your purpose in different yet essential ways.

Segmenting volunteers can help you:

  • Track volunteer-to-donor conversions. Your volunteer base is one of the best places to find new donors. Learn what engagement opportunities inspire volunteers to give and what fundraising methods appeal to them. Then, monitor which of your volunteers follow through with donating.
  • Offer tailored opportunities to different volunteer segments. Volunteers who enjoy their work are more likely to stay involved with your cause, so it’s useful to provide opportunities based on volunteers’ interests. For example, an animal shelter might group supporters based on whether they prefer dogs or cats and promote different volunteer opportunities to each segment.
  • Leverage volunteer grants. Create a supporter segment whose employers have volunteer grant programs so you can bring in additional revenue when those individuals volunteer.

By addressing your volunteer segments with the same care as your donor segments, you can build stronger relationships with all of your supporters and demonstrate that each supporter is valuable no matter how they choose to get involved with your organization.

Leverage donor segmentation to improve fundraising

The more you know about your donor segments, the better you’ll understand your community and connect with each supporter. Just remember to continue evaluating your strategy and keep your donor segmentation information up to date to improve fundraising outcomes over time.

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