Let me start off by apologizing for the bad news that I am about to share; summer is coming to an end.  Sorry about that, but it’s true.  The days are getting shorter, Labour Day has come and gone, the nights are getting cooler.  All evidence supports my statement.  It won’t be long now before the leaves start to change colour and we will have no choice but to accept the fact that winter is coming.

I can almost feel you hating me right now.  I may as well double down on that…

If you didn’t have enough to worry about at this time of year – Fall appeals going out, preparing your Holiday and Year End appeals – for many of you it is time to start preparing your budget and projections for the upcoming fiscal year.

Donors Move About in Your Database

One important thing to consider when you begin your budget and projections planning, is the fluid nature of your donor database.

A significant number of your donors will transition and move from one segment to another over the course of a year.  As you acquire new donors, your New to File segment grows.  After your New donors have been with you a while or give additional gifts, they transition to your Active donor segment.  Sadly, not all of your Active donors will give regularly and you will need to move some of those folks to your Lapsed donor segment.  Perhaps you had some great success this year converting annual donors to monthly donors.  Or maybe you have had success reactivating lapsed or long lapsed donors; move those folks back into your Active donor segment.

That Movement Impacts your Budget…

Even if the relative size of your donor database remains the same, there is a current and flow to the movement within your database that can impact your budget costing and results projections.  A banner year for acquisition would result in an increase in the number of welcome packages that you have to send out.  A successful monthly conversion campaign could have you mailing those donors less than you did before.  Growth in your Active segment might mean that you could see additional donor love and stewardship costs in the coming year.

…And your Results

Similarly, the ebb and flow of donors through your database will impact your projected results and revenue as well.  Different segments will respond to different things at different rates.  What works for your active, engaged donors may not see the same rates of return for your lapsed donors.  Success acquiring or renewing lapsed donors early in the year will result in more New and Active donors later in the year.  Predicting and following that flow is at the core of your annual budget planning and projections.

Planning in Our New Reality

In past, “normal” years, this database flow may have become somewhat predictable.  You may have even become pretty good at following the different tides and currents of your database.  The past two years, however, have been anything but normal.  Fundraisers in all sectors are going to have to peer deep into their crystal balls to try to understand the effect COVID has had on their databases and how long those effects will be felt.

Many health charities, particularly those with a direct connection to COVID, saw increases over performance pre-COVID.  Organizations that were event fundraising focused faced enormous challenges as they re-tooled their fundraising model for a COVID world.  And almost everyone saw an increase in the amount of their digital or online donations.  That crest or trough, depending on what your fundraising model was and how COVID impacted you these past 17 – 18 months, will be important to consider as it moves through your database over the next few years.

As a starting point I would recommend that you take a snapshot of the current number of donors you have in each segment.  Compare those segment counts to segment counts from this time last year and if you have them available, each of the two years prior to that.  This should give you an idea of the effects that your COVID era fundraising has had on your database so far.

The Only Constant is Change

COVID has affected each of us in a variety of different ways.  The one universal suggestion we can make is to be prepared for more change.  Where possible, position yourself to adapt to an uncertain future by building buffer into your budget and timelines. Where you can, give yourself room to maneuver and adapt to that change when it comes.

Whatever the future brings, be prepared to go with the flow.