How involved is your board in the fight against low donor retention?
Business owners, executives and other for-profit professionals are used to customer renewal rates of 90% or more. That's why most board members are shocked when they learn that the charity they serve has a low donor retention rate.
In my last blog post, I told the story of how this shock spurred a strategic discussion that ordinarily would not have occurred had our nonprofit's dismal donor retention rate not been brought to light. While there are many benefits to such discussions, they alone are not enough to fix the retention problem. Action was needed.
Obtaining the second gift is the key to donor retention
Nearly every board member fully understood the vast difference in average first-year retention rates (22.9%) and repeat retention rates (60.8%). Our discussion focused squarely on what could be done to bridge the immense gap between first and the second gift among our donors.
Numerous theories and strategies were explored from top to bottom. The board concluded that it might be best to move many of our resources and activities from donor acquisition activities to donor stewardship and relationship-building activities! This was a eureka moment; one that seldom happens in any board meeting. Most of the board volunteered to help.
What can your board members do?
Board members can make a difference!
They can make thank you phone calls, write handwritten thank you notes, and get involved in face-to-face follow-up meetings for first-time donors who make above-average gifts.
Perhaps the most important part of this type of board involvement is the example it sets for the staff at the nonprofit. Improved donor relationship-building must become a mindset that permeates far beyond just the fundraising team.
It should be firmly entrenched in the mind of every single member of the team!
Strategic discussions lead to strategic actions
It's amazing what can happen when the true power of a board awakens. There are very few strategic items more vital to achieving mission success than improving donor retention.
Hopefully, the discussion outlined above can prompt a similar discussion at one of your future board meetings. If it does, please let us know the result!
The preceding is a guest post by Jay Love, Co-Founder and CEO of Bloomerang, which helps nonprofit organizations to reach, engage, and retain the advocates they depend on to achieve their vision for a better world. A veteran of the nonprofit technology sector, Jay is a founding member of the AFP Business Member Council and chair of the AFP Ethics Committee.