Why Identity-Based Fundraising Matters

If there is one thing you should focus on this year, it’s identity-based fundraising. 

While this may not be at the top of your fundraising list, I am willing to bet it will be the thing that prepares your fundraising rocketship for takeoff not only this year, but into the stratosphere of years to come. 

You may be reading this and thinking, “Wow, that’s coming in hot. Where does she get this from?”

That’s a very good question.

What is Identity-Based Fundraising? 

First, understanding identity-based fundraising will set the foundation for understanding why it matters.

Identity-based fundraising recognizes that individuals often have strong emotional connections to their identity, to those elements that define who they are. By understanding and tapping into these identities, fundraisers can create personalized campaigns and messages that resonate with the donors’ sense of self, resulting in increased engagement and support.

This approach of Identity-based fundraising is effective because it leverages the power of personal identity and shared affinity to drive donor engagement and giving. Animal care organizations are much more likely to be successful in their fundraising if they are targeting self-identified animal lovers such as pet owners or even vegetarians and vegans. When you can find donors who see that their identity aligns with your mission, that’s where the magic happens. 

Donor Retention and Identity-Based Fundraising

Any good fundraiser should be focused on donor retention this year as external motivational factors wear off and a donor is left with the question, “Do I want to give?” Looking at your own portfolio, how do you suppose those donors would answer that question? 

You won’t have to look far, you just have to look at your retention numbers. Retention is one of the closest indicators of a donor’s identification with you and is key to identity-based fundraising. How they see, value, and how easily they identify with you shows up in their willingness to remain an active member of your donor file. 

When donors identify with you, you become their people. And when you are with your people, you’re no longer just asking for money, living in the transactional. No, instead you step into the transformational. And it’s that transformational engagement that has the potential to solve some of the world’s most pressing needs.  

Have I convinced you yet? 

The State of Generosity 

Last year, The Barna Group published a research series on The State of Generosity. One of the studies got our attention not because of what it said on the surface, but what it is starting to uncover about donor motivations. Understanding donor motivations is important for implementing identity-based fundraising.

Midway through the research, donors were asked one of the most critical questions as it pertains to donor behavior:  “Why do you choose to give?” 

Talk about asking for the secret sauce recipe for fundraisers! Here is what the research uncovered.

The Results 

The survey provided donors with several options for why they choose to give. Let’s look at the results and see how they point us toward identity-based fundraising. 

Because of why the donor is asked? 

No, only 11% said that mattered but let’s keep investigating the study.

Because of the person asking? 

No, just 8% of the survey group identified this as the main driver to give.

Because of the ministry asking? 

Again, single digits. Just 6% identified this as their primary motivation.

Because of how the donor is asked? 

Another 7% actually cite this as their motivator.

Then we saw the jaw-dropping response: 69% of adults choose to give because of… who they are.

The proverbial drum roll stopped and we looked at each other… Because of who they are? We weren’t expecting that. What does that even mean for fundraisers building strategy to meet revenue goals? 

These results mean that we have to reconsider how we are partnering donors with our charity. We must move towards identity-based fundraising. Simply put, we have to ditch the transactional fixation for the pursuit of transformational. If done right, this can look like an increase in gift frequency, gift size, and ultimately in asset-based gifts. 

But where do you start?

Be Personal+

Every good fundraiser will tell you personalization matters. And it does. However, if you ask a commercial marketer if personalization matters, they’ll tell you it’s imperative. McKinsey & Co released a study earlier this year that identified consumers’ preferences:

• 72% of consumers expect the businesses they buy from to recognize them as individuals and know their interests.  
• 76% said receiving personalized communications was a key factor in prompting consideration of a brand.  
• 78% said personalized content made them more likely to repurchase.  

Commercial marketers have it right. When we personalize, we slowly bring down the walls between the organization/charity and the donor. Our personalization connects us closer to our donors. So personalize everything you can, and then look again at what ELSE you can personalize to make the donor feel known. That’s where the “+” comes in.

Identity-based fundraising only works if you personalize your communications to your donors’ identities. And with the right automation tools, you can personalize at scale without requiring too much manual work from your staff. Don’t let the potential workload of effectively implementing identity-based fundraising hold you back when the right nonprofit CRM can help. 

Be Holistic

Let’s step back even further. In order to personalize your communications, you need to understand your donors. Identity-based fundraising only works when you know your donors, which means the data and donor signals you track are key. 

While tracking is a wonderful thing and the right approach to validate the effectiveness of fundraising efforts in a linear method, most organizations don’t zoom out enough to properly track impact. The donor journey is not always linear. Therefore our methods of tracking healthy donor engagement need to transition from transactional (campaign only) to transformational (whole donor health).

Metrics we like to help keep a pulse on donor health include:

• Retention:
  How well are you doing at keeping the donors you already worked so hard to earn?
• Lifetime Giving Value:
  How is a donor’s overall investment growing? This can come in a variety of channels, seasons, etc. It’s important to keep a global view of their engagement at hand.
• Upgrades:
  Pairing a compelling vision with the right time and the right people creates an opportunity for donors to identify their own values with your mission. When these align, it naturally translates through upgraded giving whether in average gift size or frequency. In best cases, both!

Be a Good Listener

While tracking data builds a good foundation for identity-based fundraising, you need to go another step further to truly know your donors. Talk to your donors, ask them questions, and listen to the answers. 

We understand that it is easier to set up pathways to talk to donors than to talk with donors. It’s far simpler to send a mass communication out to the whole email list and say we did our job, we sent a solicitation. It’s a completely different animal to send a communication that requests donor information and wait for it… do something with it! And when we say “do something with” we mean more than collect responses on someone’s Excel spreadsheet on a locally stored drive. We see you. 

Asking the Right Identity-Based Questions

While it can be an overwhelming concept, start small. Issue a small communication to a small sample group where the primary goal is to collect new information on the donor. Ask the donor a few easy questions that provide new intel that can enhance your segmentation and donor journey curation. Great examples include:

• Which of these areas do you most enjoy learning about? (list different areas of your program delivery)
• What is the easiest way to reach you? (phone/email/mail/personal visit)
• Do you have any questions about how your donation is <insert mission>?

Study the Answers 

When you get responses, first of all, rejoice! Each response is worth its weight in gold because a donor is not only giving you intel but also demonstrating that they are willing to go deeper. They are willing to be known. They are willing to forge a relationship. In short, they are willing to identify with you.

Study each response as it comes in and review the group. Review what donors are saying. Search for emerging themes. And most critically, partner with your nonprofit CRM person/team and learn how you can store this information in intuitive and accessible places within the database.  

Key Takeaways

Starting with actionable and palatable steps will make the journey to developing identity-based fundraising much more sustainable. And as with anything, the more you intentionally pursue the integration of these things, the more muscle memory will begin to develop as you partner with the donor in their generosity journey.

Dear fundraising friend, it’s too easy to get stuck in the way it’s always been. We get that. 

But more than that, we also get that each of us, as fundraisers, are entrusted with critical work. Often fundraising happens in the background, but it is our diligent work that will help equip charities to boldly chase solutions that can make a better world for all of us. Maybe in this lifetime or in those to come. We don’t wear capes, but we hold this work as heroic. So with that, we deputize you to tenaciously challenge everything. Test anything. And share freely. Our work is too important to allow mediocrity any room to percolate.

You’ve got this.

About the Author

Victoria Mannoia is an Account Director with DickersonBakker. She is an award-winning marketer and fundraiser with a passion for seeing organizations with heart, thrive. Her career started in the nonprofit space, so she understands what it means to live and breathe the mission of an organization while tirelessly pushing it forward for greater missional impact. Now on the agency side, she is able to be more than a colleague, but a partner in making this world a better place. Her creative and strategic way of thinking means she’s not afraid to ask tough questions that lead to breakthrough and growth.