Segmentation: How and Why You Should Organize Your Database

For all types of nonprofits, the power of personalization cannot be overemphasized. Personalizing the donor experience enables you to forge deeper relationships with valuable supporters, which means your fundraising and marketing teams need to take time to deliver appeals that resonate with each individual they reach out to. Especially for larger organizations with thousands of donors, delivering personalized appeals that grab the reader’s attention to every single supporter can seem impossible. That’s where donor segmentation comes into play.

Segmentation involves separating a nonprofit’s donor base into smaller groups, which empowers you to deliver meaningful information to supporters based on shared interests, behaviors, and needs.

This type of intentional outreach enables you to get the most out of each donor’s engagement, putting your organization on the path to success. Whether you’re new to the concept of segmentation or you’re already implementing it at your organization, it never hurts to revisit and refine your approach.

If you’re looking for smarter ways to leverage segmentation at your nonprofit, you’ve come to the right place! In this guide, we’ll walk through the following topics:

• Why Segmentation Matters
• 5 Ways to Segment Your Donors
• Best Practices for Effective Segmentation

Before diving into the basics, make sure your tech is up to the task. Effectively implementing segments starts with choosing the right constituent relationship management platform, so double-check that your CRM enables you to group supporters by any relevant indicators, including donation history, demographics, affiliations, and event attendance. With the right tools and strategies in your fundraising arsenal, you’ll be well on your way to implementing smarter donor segmentation tactics. Let’s dive in.

Why Segmentation Matters

One major benefit that we’ve already briefly hit on is personalization. Segmentation empowers nonprofits to achieve greater outcomes for their mission by connecting with donors on a more personal level. Rather than sending over-generalized mass communications that don’t pertain to anyone in particular, you should customize the information you send to each group, making it more personal and relevant to their needs.

Not only can personalized segmentation improve the donor experience, but it also streamlines operations on the backend. When your team knows exactly who they’re talking to and what they’re trying to accomplish, they can optimize each message to be more likely to increase engagement.

With the right segments, your fundraising and marketing teams will be able to:

• Send appeals via the right channel at the right time — maximizing the likelihood of a response
• Ask for the ideal gift amount through the right donation channels
• Pinpoint and engage donors who are at risk of lapsing
• Offer relevant opportunities (such as an event invite) based on past engagement history

A solid understanding of how to leverage your segments allows organizations like yours to make the most of each potential engagement opportunity. All in all, segmentation can save your team time, streamline communication, and solidify your base of support — but only when used effectively. 

5 Ways to Segment Your Donors

To experience all of these great benefits, you need to carefully plan what your segments will look like. While the groups you choose should be unique to your organization, nonprofits often implement many of the same types. Let’s explore a few common segments and how they can play into your stewardship efforts.

Engagement Type

While you might initially focus on your donors, you can expand your segments to account for your entire supporter base, giving you a sense of what activities everyone’s interested in. Consider their engagement history and group them into categories such as:

• Donors
• Volunteers
• Advocates
• Peer-to-peer fundraisers
• Board members
• Event attendees

Some segments will naturally overlap. For instance, you’ll have board members who also fundraise for your organization, advocates who also give, and so on. The important part is that you understand how they like to engage with your cause, so your team delivers the right appeals. 

For example, if someone has historically attended your events, you’ll know to invite them to your upcoming annual gala, or if someone regularly volunteers, you’ll know they’ll likely be up for helping out at your upcoming 5K.

Donation History

While every donor wants to support your organization financially, not every donor prefers to give in the same exact ways. That’s why you can group them by their giving history. You can split donors up in a few different ways, including:

• Size of gift, broken down into dollar amount ranges. For example, these segments could include donors who annually give under $100, between $100 to $249, between $249 to $499, and $500+. It all depends on the average donation amounts you typically receive.
• Type of donor, such as first-time donors and recurring donors. Knowing this, you can focus on stewarding the right donors. For instance, a donor who gives on a regular basis is much more likely to stick around, while first-time donors may need more attention so that they’re inspired to give again.
• Donation frequency, such as monthly, quarterly, annually, and so on. This allows you to send appeals at the optimal time. For instance, if you know one segment of donors typically gives during the year-end giving season, you can ramp up appeals for them in the latter part of the year.

Knowing how much and how frequently your donors give allows you to send appeals for the right amounts to the right donors at the right times. Otherwise, your requests may be left unnoticed, resulting in wasted time and resources.

Demographic markers 

Demographics can be very useful when it comes to customizing engagement opportunities to target different segments. Pick those that are meaningful to your community, whether that’s:

• Age
• Geographic location
• Political party affiliation or issues they support or oppose
• Gender

Knowing this information allows you to deliver the most relevant appeals to each segment. For instance, Millennial donors are much more likely to participate in a peer-to-peer fundraiser, whereas Baby Boomers are more likely to respond to direct mail appeals. Similarly, you’ll know to market your in-person events more to those who are in close proximity to your venue, whereas virtual events may be better promoted for those who live further away and can’t make the commute. 

On another note, if you’re hosting an advocacy campaign that’s targeted toward making a policy change, you can reach out to supporters whose political views likely align with the change you’re advocating for. This may result in them signing the relevant petition or even reaching out to a lawmaker on your behalf.

Communication preferences

Most people will have very specific preferences when it comes to how they want to hear from your nonprofit team. As such, communication preferences are an important aspect to note and consider when developing outreach.

Successfully tracking and segmenting donors by their communication preferences involves two factors:

• Which channels an individual prefers to be contacted through (e.g. social media, email, phone call, text, etc.)
• How frequently the supporter wants to be contacted

Bearing these in mind, you can send well-timed asks to segments with high response rates for certain communication channels. For instance, if a group historically responds well to emails, send your asks via email. If they’ve indicated that they prefer direct mail, they may respond better to that form of solicitation than to online fundraising appeals. 

If you choose to rely on communication platforms that your supporters rarely check, they may never see your outreach. Or worse, if you rely on an unpreferred channel you may flood supporters with too many messages via the wrong platform, annoying them and steering them away from your organization for good. 

Corporate giving eligibility 

Knowing your donors’ business connections enables you to group them based on their eligibility for corporate philanthropy programs. Be sure to gather their employer information as soon as possible, so you can research their programs and reach out to the appropriate people.

There are two primary forms of eligibility that you’ll need to track, including those for:

• Matching gifts. With matching gift programs, companies will match their employees’ donations to a nonprofit (usually on a dollar-for-dollar basis). There are usually stipulations around eligibility, including minimum amounts they’ll match, maximum amounts they’ll match, and type of employee (e.g. part-time, full-time, or retired). That’s why it’s also important to track donation amounts and other key giving information.
• Volunteer grants. Those who regularly volunteer for your organization may work for employers who will send volunteer grants to your organization to multiply their employees’ impact. Like matching gifts, companies implement requirements for these grants, such as a minimum number of hours volunteered within the year.

These programs can dramatically boost your fundraising potential. In fact, Double the Donation’s corporate giving statistics page estimates that corporations gave more than $21 billion to nonprofits in 2019, which was an increase of 13.4% over the previous year. These programs are becoming more popular as time goes on. Tracking eligibility along with other key giving information will allow you to jump on these opportunities and leverage that extra revenue stream.

Best Practices for Effective Segmentation

As donors continue to engage with your organization over time, you’ll be able to continuously build on the data in your system for more effective strategies. Salsa’s guide to nonprofit fundraising strategies explains how a robust CRM platform should enable you to create rich donor profiles to store and organize this continuous influx of data. Then, you can continue to adjust and refine your actionable segments for even more precise interactions. 

However, choosing the right CRM is only the first step toward effective segmentation. What really matters is how you leverage segmentation within your CRM. Of course, you’ll want to start off by implementing the right segments that suit your nonprofit’s unique audience. Beyond that, there are a few other best practices you can leverage to get the most out of your segments, including:

• Collect data during the giving process. The best time to gather information to build out your donor segments is when people are donating. You can ask them key questions regarding their demographics or preferences. Bear in mind that you don’t want to require so many questions that they get frustrated filling out your form and ultimately abandon it.
• Revisit your segments regularly. Your organization and its base of support are constantly evolving. Regularly update your segmentation strategies and ask yourself whether your segments reflect your current priorities, your community has evolved, or your team is leveraging your current segments effectively. Knowing this, you can eliminate irrelevant segments and create any that are missing.

Collecting the right data at the right times, ensuring you maintain good data hygiene, and putting the information you gather to use can go a long way for your nonprofit. With the right information and strategies on hand, you can develop a smart segmentation strategy that evolves with your organization and promotes true progress for your mission. 

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No matter the size of your nonprofit or the cause you’re working toward, segmentation is a fantastic way to get to know your supporters and deepen your relationships with them. Grouping your supporters in meaningful ways will allow you to deliver a highly personalized donor experience that will encourage them to stick around for the long haul. All it takes is a proactive approach to collecting data and effective strategies for organizing and leveraging it. Is your nonprofit’s team ready to refine its segmentation strategies and solidify its future?