Strengthen Your Donor Segmentation: 7 Successful Strategies

When it comes to making connections with your supporters, there’s nothing more important than making people feel like your nonprofit is actually talking to them. Instead of using the same communication, engagement, or fundraising strategies for your entire community, your team should instead take a segmented approach.

Donor segmentation refers to an effective donor management strategy of identifying core demographics within your base and tailoring your efforts to speak directly to those groups.

Not only does donor segmentation make your interactions with supporters more impactful, but this strategy also helps optimize your operations behind the scenes. When your team always knows who you’re talking to and why, it’s less likely you’ll run into logistical hurdles.

If your organization wants to find a way to make more meaningful connections with your supporters, then it’s time to rethink how segmentation fits into your strategy.

In this article, we’ll offer up our favorite donor segmentation best practices. Your team should:

1. Assign meaningful donor segments.
2. Regularly revisit your segment lists.
3. Create strategies for different donor segments.
4. Analyze engagement by donor segments.
5. Leverage donor segmentation for smart giving.
6. Address the needs of your volunteer segment.
7. Share segmented fundraising opportunities.

For nonprofits looking to strengthen supporter relationships and optimize donor management, take a second look at how smart donor segmentation tactics can improve your operations.

1. Assign meaningful donor segments.

To get started implementing donor segmentation at your nonprofit, you’ll first need to determine which donor segments are relevant to your cause.

While there are many different kinds of segments that nonprofits recognize, your team will have to decide for itself which segments are important to your organization’s strategy.

Many organizations segment donors by:

• Donor type. Perhaps they’ve made a major gift in the past, or maybe they’re a member of your recurring gifts program. Whatever the case, many nonprofits find it helpful to classify donors by the type of gift they typically (or historically) have provided.
• Demographic markers. Your team might want to have lists of your millennial donors, supporters who live in the southeast, or contributors who belong to a particular political party. Segment donors by whatever demographic groups are meaningful to your community.
• Networking flags. Maybe your nonprofit wants to improve your networking strategy and would find value in learning what companies your supporters work for, where they went to college, or what other nonprofits they support.

Once you’ve settled on your meaningful donor segments, customize your supporter profiles in your nonprofit’s CRM. Include fields to tag constituents as members of different segments.

If your fundraising or events software integrates with your CRM, you can even set up forms to automatically capture this data and input it into your CRM.

2. Regularly revisit your segment lists.

Your team is probably well aware that in the world of nonprofit fundraising, priorities can change quickly. The data that was meaningful to your strategy last year may no longer be relevant.

With that in mind, it’s important to not think of donor segmentation as a “set-it-and-forget-it” tactic. Be sure to regularly reassess what segments you track and why.

Gather key members of your data management team and ask:

• Are these segments still reflective of our priorities?
• How has our community evolved since we created these segments?
• Are we learning the kind of information we need to know?
• Have we experienced gaps in supporter data that we should address?
• Do we feel relevant segments are missing from our database?
• Have we applied data from our donor segments in a productive way?

Once your nonprofit has addressed these questions, you can make a more informed assessment of your segmentation strategy as it stands. If you feel like it’s time to update your key segments, don’t shy away from doing so!

Many organizations make the mistake of keeping their segments completely consistent even when their priorities, interests, or demographics change.

While it’s important to comprehensively collect data on your community, there’s no use in ignoring newly relevant segments or focusing your analysis on segments that no longer play a prominent role in your strategy.

3. Create strategies for different donor segments.

Now, the reason behind segmenting your donors is pretty intuitive: the more you understand different segments, the better you’ll be able to hone your strategies to those segments.

After creating your different donor segments and finding room for that data in your nonprofit’s CRM, convene with your staff to create plans of action for how that data might be implemented.

For example, your team could plan to:

• Track donation form completion rates among your different demographics to see which versions of your forms speak to which donor segments.
• Monitor the age demographics of supporters who share your post across various social media platforms.
• Analyze the wealth breakdown of individuals who attend your different fundraising events to understand their attendance habits.

Create a defined plan of action in which your team breaks down your different donor segments, records relevant questions you want to answer about these segments, and outlines how you’ll learn this key information.

This resource will help guide your team as it begins to collect more targeted information. Additionally, it can be used as a reference point after campaigns close out to determine whether or not your data collection strategy was implemented effectively.

Be sure to share your data strategy plans with core members of your nonprofit across different departments. This way, you can ensure many individuals in varying roles have a chance to take a look at the plan and offer up feedback.

4. Analyze engagement by donor segments.

When it comes to boosting the overall success of your nonprofit, a big factor to consider is how your community prefers to engage with your cause.

By adopting segmentation as part of your nonprofit’s overall strategy, your team can start finding out what kind of engagement opportunities your supporters best respond to and which engagement strategies fail to make a connection.

Engagement should never be a one-size-fits-all strategy for your nonprofit, especially because offering incompatible engagement opportunities to the wrong segments can dampen their excitement for your cause and even steer them away from future engagement.

For example, if your team tracks a metric like email open rates across various segments, you can learn what kind of language entices different demographics to open up important emails.

Or, your team could measure event attendance over time across certain segments to learn what kind of events excite different supporters.

Remember, your engagement strategy forms the foundation of other arms of your organization’s strategic efforts, including your fundraising strategy and stewardship strategy.

By researching how different donors engage with your organization, your team can save time in the long run by building your efforts off of a solid foundation of effective engagement tactics.

5. Leverage donor segmentation for smart giving.

Another area of your nonprofit’s strategy that can benefit from some segmentation best practices is your fundraising strategy.

For most nonprofits, perfecting their fundraising strategy is top priority. You want to know that your efforts aren’t going to waste and that every dollar you spend behind the scenes will result in positive fundraising progress for your cause.

With that being said, there are many ways smart segmentation strategies can help strengthen your fundraising efforts over time. Your team should:

• Collect key donor data during giving. The best time to gather important data to build your different donor segments is when your supporters give. You can ask them questions to determine their demographics or automatically sort them into segments based on their giving activity.
• Create corporate philanthropy lists. After donors have given for the first time and have their data added to your CRM, you can sort them by their corporate philanthropy eligibility. Manually flag their eligibility for matching gifts opportunities by searching a database like Double the Donation. Or, if you use an integrated prospect research database, certain corporate affiliations can be automatically flagged.
• Find out giving patterns among donor segments. Another way segmentation can improve your fundraising strategy is by tracking what kinds of fundraising opportunities inspire different groups of donors. This way, your team can focus on offering similar opportunities to these segments going forward.

Above all? Be sure your fundraising strategy takes into account segmented supporters who behave outside of the norm for their groups.

These individuals, like older donors who prefer to donate to social media-driven campaigns or donors with lower wealth markers who still manage to make generous gifts, shouldn't be set aside as anomalies.

Your team should make note of who these givers are and learn to offer tailored fundraising opportunities to their unique needs instead of solely focusing on larger, more predictable segments.

6. Address the needs of your volunteer segment.

When nonprofits segment their supporters, they often focus on segmenting different donor groups to give fundraising their full attention.

However, segmentation can also serve your team well when you apply it to analyzing the makeup of your dedicated volunteers.

Volunteers offer a lot of benefits to nonprofits that you may not realize. Not only are they one of the more likely segments to donate down the line, but they also do much of the hard work of spreading the word about your cause to their friends, family, and colleagues.

Keep in mind some of these essential volunteer segmentation strategies as you begin to prioritize volunteers in your different supporter segments:

• Track volunteer-to-donor conversions. Find out how to convert volunteers into donors by tracking these important conversions. Your team can learn what engagement opportunities inspire them to donate or what fundraising methods they prefer as a segment to develop more effective prospect lists.
• Offer different volunteer opportunities to different segments. To boost your volunteers’ engagement at your nonprofit, track their segments to see what kinds of volunteer events and opportunities they prefer. When you offer volunteers the kinds of opportunities they enjoy, they’re more likely to stay involved with your cause.
• See where segments overlap with volunteers. Just because an individual belongs to your volunteer segment, that doesn’t mean they aren’t also a member of another segment you track. Create subsegments of volunteers who are matching gifts eligible, volunteers who engage in peer-to-peer fundraising, or other impactful groups.

When nonprofits take their volunteer segment seriously, they help show their whole community that they value all kinds of engagement with their cause.

When your supporters feel like it’s worthwhile to continue engaging with your cause over time (even when they can’t make a gift), you’ll build relationships that last a lifetime and set your cause up for success in the long term.

7. Share segmented fundraising opportunities.

Finally, one of the most effective strategies your nonprofit can adopt is offering segmented fundraising opportunities to different donor demographics.

If your nonprofit is always offering the same fundraising methods or campaign types to supporters regardless of their segment’s preferences or history, you’ll likely drive them away from your cause.

Remember, your donors want to feel seen and heard by your organization and not like they’re just an anonymous member on your mailing list.

Your team can tailor its asks to different segments in a few key ways:

• Consider their communication habits. If certain segments have high response rates to email messages, share your asks via that channel. Alternatively, one segment may prefer receiving asks via direct mail and would likely respond better to that form of solicitation than an in-person or online ask.
• Keep in mind the fundraising method. Remember to offer tailored asks to supporters by emphasizing their preferred fundraising method. If you ask an internet-averse segment to give online, they’re less likely to make a donation than when presenting them with a more traditional method, like direct mail giving or at on-site fundraising events.
• Always have a backup. Even though certain segments have their primary fundraising preferences, that doesn’t mean that’s the only way they’ll want to give. If you’re not having luck presenting a segment with their traditionally-favored fundraising opportunity, consider what methods have been successful with similar segments and give that a shot.

Although segmenting your donors can be a great way to predict their future behavior and plan your nonprofit’s fundraising efforts, it’s not magic.

However, the more you know about all of your segments, the better you’ll understand your community as a whole, how to connect with them, and what strategies may be successful across your different segments.

Donor segmentation is one of the most effective ways for nonprofits to better know their supporters and improve fundraising outcomes. With these best practices on hand, your team can get started more effectively engaging with supporters!

For nonprofits looking to strengthen their donor management efforts, segmentation can be a great step in the right direction. Is your nonprofit ready to revitalize your approach to donor management?

If you want to unlock more supporter management and fundraising tips, check out these additional resources:

• Free Download: Annual Development Plan Checklist. Identify the key people, resources, collateral, and technology you need to build a comprehensive development plan.

• Free Guide: Clear and Complete Guide to Nonprofit CRM Software. Learn 5 top ways CRMs are used, 12 considerations to make when choosing a system, and 14 tips for setup.

• Free Guide: Clear and Complete Guide to Fundraising Software. Learn 34 features and 5 integrations you need plus the 4 best ways to sell your boss and board on new software.

• Free Demo: Salsa's Donor Management and Fundraising Software. See how your nonprofit, campaign or 501c3 organization can leverage our online and offline fundraising tools!