Donor Segmentation: Slicing and Dicing to Raise More

Segmentation Made Simple

Donor Segmentation Made Simple

I keep receiving postcards about charitable gift annuities. I'm not offended, but this is not the type of gift most people under 65 are thinking about. In fact, I’m far from that age bracket, and yet, this direct mail keeps showing up.

I’m all for direct mail—when it’s done right. Casting a wide net is great for catching fish, but in the sea of emails, social media, and direct mail, you’re far more likely to build a meaningful relationship if you can zero in on the right audience.

Donors can be finicky. No one wants to be aged up by 20 years or receive a piece of mail with their name misspelled. With a few simple steps, you can target your donors better, leading to:

1. Increased Efficiency

2. More Effective Targeting

3. Positive Engagement

4. Saved Time and Money

   
   

Here’s how you can improve your segmentation process and make your fundraising efforts smarter, not harder:

1) Past Giving History: Know How They Give

Tracking how your donors give is crucial. While many nonprofits track donation histories to some degree, I’ve encountered several organizations that miss this step entirely. With all the ways people can contribute—whether by check, credit card, stock, or donor-advised funds (DAF)—it’s essential to understand the patterns behind their gifts. Especially for non-cash donations like appreciated stock or DAF gifts, which tend to be larger than traditional gifts, this tracking will help you build stronger, repeat relationships.

Here’s the key: Once you’ve thanked them for their contribution, make sure next year—to ask them for the same gift. If your organization isn’t set up to accept gifts like Bitcoin, stock, or crypto, now is the time to have that conversation with your bank or payment provider. It might be a small investment upfront, but it can pay off in the long run as more donors prefer these methods. And I cannot believe I’m including crypto and bitcoin but people are donating them.

2) Age: Simple Yet Powerful

Age is an easy and effective way to segment your donors—if you have the data. Some gift types, like IRA Charitable Rollover gifts or charitable gift annuities, are specifically suited to older individuals. For example, if a donor gave via their IRA, they’re likely 70.5 years or older. This is an easy assumption to make, but what if you don’t have age data on your donors?

Here are a few ways to collect this information:

1. Hire a Data Broker: They can clean up your donor database and provide more accurate data. It’s a good investment if your records need an update but be aware that it won’t be 100% perfect.

   
   

2. Ask Your Donors: Yes, you can directly ask your donors for their age or birthdate. This could be part of your event registration process or an online account setup. You could even incentivize them by offering event discounts or special gifts in exchange for providing their birthday information.

   
   

3. Leverage Social Media: While not everyone lists their birthday on social media, many do. This can be a valuable resource for updating your database. This is a bit time consuming, it might be a great project for an intern (or other trusted staff). Another benefit of this is seeing who’s active on social media and who’s talking about your nonprofit. This could help form a social media ambassador program.

   
   

4. Giving History: Donors who have been contributing for decades are likely older, especially if they’ve been consistent in their support. If you’re paying attention to patterns, you can make reasonable assumptions about their age based on the length of time they’ve been giving. Consistent donors are also your best prospect for endowment gifts.

   
   

3) Geography: Know Where They Live

Sometimes, donor location can tell you a lot about their potential. During my time at JUF, I wanted to understand who was contributing through DAFs. What did they look like? What was their age, their occupation, and where did they live? What I discovered was that one particular zip code stood out—it had the highest concentration of DAF holders. This insight allowed me to refine my marketing efforts.

Similarly, you might notice that some of your donors have multiple homes. If so, you could make a few educated guesses: They might have greater capacity for giving, or they may only be in your community part of the year. Either way, these are donors worth spending extra time cultivating.

Stop Mass Marketing. Start Segmenting!

If you’ve been relying on mass marketing, it’s time to rethink your strategy. It’s tempting to cast a wide net, but segmenting will help you build deeper and meaningful relationships. Your donors will thank you for making them feel seen, heard, and valued.