Test-giving, or under-giving, is a common activity for new donors.
First-time donors contribute a small amount, maybe towards a specific project or at an event, then wait to see what response they receive before deciding to contribute again. It’s an effective tactic used by skeptics to learn more about the nonprofit, but it also provides the organization with a better understanding of the donor.
Researchers have found that 49% of modest first-time donors consistently use test-gifting when entering into a new relationship with a nonprofit. An additional 22% use the method sporadically. Combining those groups means 70%+ of first-time donors routinely use test-giving to learn more about how a nonprofit operates.
So, what information are donors looking for when they dip their funding toe into your pond? And, what information can that test-gift provide you about the donor?
What the Donor Learns
Offering a test-gift as a first-time contribution provides insight into how the nonprofit is being managed, how successful it is in meeting goals, and how much it’s leadership team values the donor community.
1. How effective is the administration?
Above all else, donors want to know their contribution is not being wasted. A test-gift can alleviate this concern. Responding to their test-gift with a timely message of gratitude is the first step in reassuring donors the nonprofit is responsive to the needs of others. It also proves they have a genuine appreciation for the funding their donor community provides.
2. What work is currently being done?
The common, and necessary, practice of thanking a donor soon after the contribution is made should also include an update on how their funding is used.
Has a past project been completed? Has a new project begun? Provide them with the latest news on current projects to give them a subtext into how effectively funding is being managed. It also provides a subliminal feeling of inclusion that can deepen the bond between the nonprofit and the donors by reassuring them that their funding is an important part of reaching shared goals.
3. What are the successes and challenges currently being faced?
Donors realize the work of the nonprofit is difficult and they want to be your cheerleader. Giving them insight into the nonprofit’s success and the challenges faced will help them understand why their involvement is crucial to the work being done. It also sets up your future ask without having to go into detail.
4. Who are the leaders of the nonprofit?
Introducing your leadership team to your donors underscores their importance. When a board member or top leader sends a thank you note or reaches out with a call it grabs the attention of the donor, giving them the recognition it deserves. When those leaders’ names are recognizable that relationship can grow even stronger.
5. How much their donation (and they) are valued by the nonprofit?
Finally, a timely response to a test-gift tells the donor shows the appropriate appreciation of the nonprofit.
Donors are happy to contribute to causes they feel are valuable, but they want to know their hard-earned gift is appreciated by the nonprofit. A test-gift initiates activities that will provide the answer to this question. If the donor is left with an unsatisfactory feeling from the nonprofit’s response they may never contribute again.
What the Nonprofit Learns
A first-time gift is a nonprofit’s first opportunity to understand the mind of their most recent donor. Segmenting them into groups will help you zero in on your nonprofit’s strengths and weaknesses when it comes to your donor relationships and spot trends in how effective your marketing has been.
1. The donor profile
Categorizing your donor based by age, social status, and other telling information can happen by analyzing test-giving groups. Did the funding come through an event? An online ask? Or, is the address a clue about the income level that is attracted to your cause. Knowing this will help you drill down where to focus your marketing attention.
2. When is the best time to ask for funding?
If there is a surge of first-time modest gifts following an event or at a particular time of year, perhaps during the holiday season, you may be receiving a surge in test-giving.
A donor’s timing will highlight the best time to roll out a marketing campaign in order to get the most impact. It can also help when choosing the date for your most important events of the year.
3. Which fundraising activities or marketing campaigns do donors prefer most?
Donors are drawn to a nonprofit’s cause for many different reasons. Offering options in how, when, and where they contribute can be a great benefit to acquiring even more funding. For example, if you get a first-time contribution through a #GivingTuesday event you might explore more campaigns that make it easy to give. If a holiday gala brings in a lot of new first-time donors you may want to plan a second one for later in the year.
4. Which projects do donors find most important?
When a nonprofit approaches a donor they come with a story to tell. Finding the ones that motivate those donors giving will tell you which ones to focus on when you ask in the future. Maybe it’s a personal story of hardship that is overcome with the help of your nonprofit, or maybe it’s a goal-oriented story that points out a need and details how you plan to meet that need. A test-gift that comes after sharing a real-life account can shine a spotlight on the types of stories you should be sharing.
5. How much a donor is likely to give in the future?
Different donors are drawn to different fundraising events. Say you have a first-time donor who has made his donation at your annual gala and another one has sent in a check in response to a calling campaign. While each may give an amount that is similar in amount, there is a vast difference in where the motivation to give was initiated. High-end events typically draw a different high-income crowd, whereas a calling campaign might target a different income.
Test-giving provides information for both the donor and the nonprofit. Sometimes the answer is clearly revealed; sometimes it comes as a subtle impression that either encourages or discourages a deeper relationship. Tracking each first-time, modest gift can illuminate trends and give clues as to the best ways to approach your donor community.
It was a good initiative from your side. Thanks for sharing the valuable tips.
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