It may sound like the opening line of a joke, but now is the time to start planning your budget for 2018 if you want to be armed with the information you need to take your program to the next level in the coming year.

Are you mailing enough acquisition? Should you be starting a monthly donor program? Is this the year to invest in planned giving marketing or other forms of donor cultivation? If you wait until the end of the year to gather the data to answer these questions, you may find yourself a day late and a dollar short.

Here are three actions you can take right now that will help point you in the right direction for year-end budgeting and a successful 2018.

1. Determine the overall health of your file

Creating a budget should be about more than planning the cadence of your campaigns. It’s an opportunity to look at the health of your program and decide which fundraising tactics you need to undertake to build on strengths and address weaknesses.

The place to start is with some deeper analysis into your file’s performance (beyond results by campaign). Metrics to consider are overall retention of your donors, retention of new donors, reinstatement of lapsed donors and retention of multi-year donors. You’ll also want to determine the value of these donors. How long is it taking to recoup your investment in acquisition? Are your donors increasing in value the longer they stay on the file or is their value flat? Is the overall value of your donor file increasing year over year?

In looking at these metrics, seek out trend lines over four or five years. Also, compare your organization’s metrics with others in your sector. Blackbaud provides quarterly benchmarks by fundraising sector that can show you how your organization’s direct response program is stacking up to others like it.

What’s the purpose of all this data? To help you pinpoint areas of opportunity for growth, and then plan for strategies to take advantage of those opportunities. For example, finding out that your new donor retention is lower than it should be is cause for handwringing if you learn that after your budget for the year is set. Discovering that now will enable you to actually do something about it. Maybe you need to acknowledge your new donors more quickly (necessitating more frequent acknowledgement runs, which will add cost). Perhaps you should test a new donor welcome package? You can make a case for this added expense if you have the data.

Alternatively, you may find that your retention is right on target, but your donors aren’t upgrading. This may be the year to undertake a more aggressive upgrade program. Consider everything from low-cost ask-string testing to dedicated upgrade mailings. And remember—you can increase donors’ value by increasing the number of gifts in a year, not just by getting them to make a single, bigger gift. Decide whether additional information on your donors (like wealth screening) might help those efforts. Then, get them in the budget!
And, this data will also provide a vital benchmark that can help you determine if your tactics and (the added investment) are helping to move the needle on the metrics you are trying to improve. Important note: If you are reading this article and realize that you don’t have the ability to get to these metrics for your donor file, the first thing to add to your budget for 2018 is an analytics line item.

2. Look for low-hanging fruit

As direct response fundraisers, we often hear about the wisdom of starting a monthly giving program and pursuing planned gifts (two very different upgrade techniques). And while those may certainly be good strategies for your organization to undertake, they aren’t advisable for every organization, and they are not without investment. Now is the time to decide if these are initiatives that make sense for your program, and determine what assets you need to have in place to maximize your chance for success.

Let’s start with monthly donor programs. These are very useful as an upgrade for lower dollar donors— especially if yours is a larger file with a program that features monthly appeals. If that’s the case, converting low dollar donors to automatic monthly giving through EFT or credit card charges can increase the value of these donors and save your organization on the cost of mailing these donors on a monthly basis. If you could convert even 3 percent of a 50,000 donor file to monthly giving, you’d have 1,000 sustainers—a viable program. However, if yours is a smaller file, with fewer mailings or a file that doesn’t include a large group of under $100 donors, the cost of starting a monthly donor program may not be worth the return.

Take the time now to investigate the number of under $100 donors on your file. What would 3 percent of that number be? How much would you save by not mailing these donors on a regular basis? What changes do you need to make to your website to make monthly giving prominent and simple? Run those numbers now and (if it looks like a sustainer program is right for you) determine those start-up costs and add it to your budget. If not, move on.

Planned giving is another upgrade option to consider. For a variety of reasons, direct response donors are excellent planned giving prospects. Employing a relatively basic planned giving marketing program can (over time) result in a steady flow of bequests from your direct response file. Now is the time to budget for that program.

First, determine how many long term consecutive donors you have on your file. Often, these are the best prospects. If you have a program that’s been running for 10 years or more, planned giving marketing probably makes sense for you. Determine what assets you need to have in place to be successful. Does your website have a planned giving section? What communications do you currently have in place that you could layer planned giving messages on to? Is this the time to create a planned giving buck slip to add to acknowledgements, or should you add a planned giving lead generation campaign to your mail and email schedule? Now is the time to think about those costs—and plan for them.

3. Conduct a website audit

Every piece of mail or email you send is an invitation to donors to come to your website. What are they finding when they get there? Most importantly, how easy have you made it for donors and prospective donors to make a gift? Having a website that truly supports your development efforts is critical. Now is the time to determine what changes you need to make to your website to maximize its effectiveness for your organization—and how much it will cost to get you there.

Does this list make your head spin? There’s no need to panic, especially if you start now. Begin with your file analytics and choose one metric you want to improve, then design a program and budget to get you where you want to be.

Originally published as part of the "Out of the Trenches" series in the July 2017 issue of Marketing AdVents by DMAW