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Why Do We Give? A Review of Donor Segmentation Schemes

 
 

As part of our study on donor motivations the ABA research team investigated past research – in the arts and beyond – around donor segmentation. Here we share a synthesis of segmentation approaches to help arts organizations consider new ways to message to, and build relationships with, donors in this time of limited in-person interactions.

 
 
 

Background on the Research

 

As our audience research Coming Back Stronger suggests, we’re big believers in tailoring outreach and experiences to match customer/donor needs.  But sometimes those needs can be a challenge to figure out.  One method for eliciting customer needs we frequently talk about is the “jobs to be done” method from Harvard Business School professor Clay Christensen.  This approach asks a set of questions around the environment and source of the need to understand what individuals are trying to accomplish rather than their feedback on the product.

When you are done with a set of jobs-to-be-done interviews, you have an assortment of customer needs.  How do you turn that into a system that regularly supports those needs? The answer, more often than not, is a robust segmentation scheme that organizes those needs into a manageable number of personas.  Then you can size and scalably target those personas or motivational segments with messaging and offers.

For this research initiative, we looked at the most frequently-cited donor segmentation schemes – see the list and links at the bottom – and synthesized them into a single list.  We also conducted a set of interviews with donors across our member organizations 

We incorporated this list in our donor survey, which already has 3,000 responses across 50 different organizations.

ABA members, you’ll receive an invitation to a research summit at the end of May where we will incorporate our quantitative and qualitative findings into a set of recommendations, and you’ll have a chance to discuss with your peers.

Curious about the research or have a point of view?  We’d love to have a research conversation, just send us an email.

 
 
 

Common Segments for Donors

 

Across the many research initiatives, we found that donor types (inside and outside the arts) fell into one of nine categories, beginning with those closest to the organization, ending with those who are least connected. These are not yet fully validated through our quantitative work, nor sized – but may provide inspiration nonetheless.

 
 

1. Mission- or Emotion-Driven: donate based on passion, values or faith. These are our ideal donors. They are connected to our organization for our central mission: the art we create and the way that art helps the world. These donors are likely to be particularly attracted by a statement of shared values or what your organization stands for above the level of the genre. They likely appreciate your community engagement and education work as much as the performance itself. The Wolf Brown research with Helicon found five values in Bay Area, California donors and suggested that values-based donor communication is essential to success.

 

2. Repayer: give to those who helped me.  These are prominent in educational institutions and hospitals but likely also present in the arts.  In our interviews, donors talked about appreciating going to performances as children and the formative nature of the arts on their lives and careers.  

3. Co-creator: build something together.  The Wolf Brown study of 2007 suggested this was a small but clear segment in the arts.  These donors are most attracted by commissions and new works. 

4. Investors: see impact, especially in community.  This group looks at donation as a portfolio of investments to have a particular impact.  Seeing that impact - in the form of return-on-investment calculations or participation in the initiative, is critical for this group.  These donors may be inclined to donate to smaller organizations where their donation can have a bigger relative impact.

5. Altruist: moral imperative/anonymous.  This group feels compelled to donate, not for individual gain or understanding, but simply because that is the right thing to do.  They are more likely to be your anonymous donors.

 

6. Personal Ties: to org, artist or asker.  While personal ties are likely helpful no matter the donor motivation, there are some donors who donate entirely based on relationships and trust in the individuals aligned with the organization.

7. Socialites: build relationships and have fun.  This is the first of the more ‘transactional’ donors.  These donors are attracted by social events alongside the performances, including galas and cocktail events.

8. Recognition-seeker: see and be seen.  These donors care about recognition in the program, naming rights and more.  The opportunity to be seen as an important contributor to the community or generous donor is essential.

9. Purchasers: viewing the donation as primarily an exchange for benefits (e.g., parking and lounge access).  This donor segment did not show up specifically in our review of the literature but was mentioned frequently in our interviews with members.  In a way, it is hard to call these individuals donors: they are purchasing add-ons to the performance experience and are relatively price-insensitive for those benefits.  These are the donors that are most likely to not renew their membership during the pandemic, even if benefits switch to digital experiences. 

 

Did we miss any? Are there some you don’t see in the arts (even if they appear at other nonprofits)?  Let us know by contacting the research team.

 
 

Sources