The GuideStar Blog retired September 9, 2019. We invite you to visit its replacement, the Candid Blog. You’re also welcome to browse or search the GuideStar Blog archives. Onward!

GuideStar Blog

4 Things Clothing Upcycling Can Teach Nonprofits about Keeping Donors

Part 1

Claire Axelrad Claire Axelrad

I know this may sound silly, but I sometimes like to think of my donors as clothing.

Huh?

Well, shopping is one of my favorite activities so I think about clothing a lot. With love. I think about the many ways I can use it, repurpose it, mix and match it, show it off and even share it with friends and family. I treasure my clothing, and have a great deal of difficulty letting go of any of it (yes, my closet is stuffed to the gills)!

So, how are donors like clothing?

They cover a lot of basic needs. They keep you (aka your nonprofit) warm and cozy. They enable you to get through different seasons. They help you look good. They help you show off your brand and strut your stuff. They attract others to you. They are a big part of the story of your life. And you should have a lot of trouble letting go of them.

Unfortunately, most nonprofits are much too cavalier about letting go. It’s expensive. It’s a waste of time. It’s completely irresponsible if you care about your nonprofit’s future – so I want you to STOP IT!

4 Ways to Cherish and Hold on to Donor

1. Stop Discarding Donors; Treasure Them

If you’re like the average nonprofit, here is the abysmal state of your donor retention:

  • Overall: 41% (compared with 94% for commercial businesses)
  • New donors: 27%
  • Repeat donors: 70%

One of the reasons this is happening is that you’re not really paying attention to keeping donors; all your resources are going into acquiring new ones. This is extremely ineffective, as it is much more expensive to get a new donor than to renew an existing one (the same is true for customers of for profit businesses).

In fact, research shows it takes-7-12% more effort, time and money to bring in a new donor than to raise more from a current donor. You’re fooling yourself if you think the name of the game is just donor acquisition. Want to know why? The latest Fundraising Effectiveness Project report reveals that for every 100 new donors you secure you’ll lose 102 through attrition – a gain of -2!

In order to do better, you need to begin by knowing what you’re doing now. The bad news is that the lion’s share of executive and development directors to whom I pose the question “what is your donor retention rate?” do not know the answer. If you’re a development director or executive director, you need to know what your donor retention rate is!

On top of that, you need to have a goal you’re trying to meet. There are nonprofits who achieve a rate of 70% or higher. Every organization should establish a goal for what their donor retention should be.

ACTIONABLE TIPS (Closet analogy): Stop discarding clothes (aka donors) after you wear them once. That’s expensive and wasteful! Are there some you haven’t worn for a year? Two years? Five years? Apologize and begin to reconnect! Go through your existing clothing (aka donor base) and figure out which ones have been neglected. If these pieces no longer exactly “fit,” see if there is a way to upcycle them (I sometimes turn my old sweaters into skirts; maybe you can find another program that would interest your donor more at this point in time). Set a goal for what percentage of your old clothes you will strive to keep. Then make a plan for the steps you’ll need to take in order to do so.

2. Meaningfully Thank Donors; Do it a Lot

Do you have a written Donor Acknowledgement Program? Are you clear about how many hours you’ll let elapse before someone receives a thank you? Do you have guidelines that suggest how you’ll thank different categories of donors? Do you mail perfunctory receipts, or do you send personal, handwritten notes or make phone calls? Is everyone in your organization on board with participating in the gratitude process, or is it just one person’s job?

Thank you is the beginning of building a relationship with your donor; not the end. If you do it in a slapdash, perfunctory manner you may as well not do it at all. You’ll end up with a “one and done” gift transaction. A tee shirt you wore once; then balled up and threw into a corner to forget about it.

Sometimes organizations focus on thanking just their major donors, ostensibly cutting costs by not thanking donors under a certain donation amount or not sending personal letters to donors who give online. Or organizations squander precious opportunities, neglecting to thank donors in newsletters, programs and annual reports because it “takes too many pages”. This is pennywise and pound foolish.

Thank all of your donors – online, offline, big and small -- promptly and personally. When donors make a noteworthy gift, or a significantly increased gift, show them you noticed. Take the time to make a call. Make it a point to have someone else in your organization send an additional thank you (e.g., a program manager or board member). Incorporate gratitude into your culture and your year-round planning so you don’t waste opportunities to connect donor’s gifts to the impact they have. Thanking donors more than once will increase retention and boost future giving.

ACTIONABLE TIPS (Closet analogy): Thank your sweaters, jackets and jeans (aka donors) promptly for the great time they gave you. Thank them specifically so they know you mean it (“You kept us warm on the bus trip;” “You looked great at the Gala;” “You helped me get the job!”). Focus on being demonstrative so they appreciate their impact on you. Post a photo of you and your outfit (aka donor) on Instagram. Take a video of your friend (aka client) actively enjoying your outfit and upload it to YouTube. Be creative and surprise and ‘wow’ your clothing (aka donors) with spontaneous, unexpected praise (“Happy Valentine’s Day! I always think of you today because I love you”)! Elicit compliments for your donors (and clothes) from other folks as well. The more praise donors receive from folks in your organization, the better.

What we’ve learned thus far about donors (and clothing):

  • It’s expensive to keep getting new donors (or clothes) while not really paying attention to the donors (or clothing) you already have. Ask: How might I use my resources more intelligently to still find new donors while also keeping and upgrading more current donors?
  • It’s important to take an inventory; know who (or what) you’ve been neglecting. Ask: What is my current rate of donor retention? What is my goal for improvement?
  • In order to get better results from existing donors (or more use from clothes) I need a plan to renew and upgrade them. Ask: What steps can I take to connect with donors differently moving forward? How can I get to know them better?
  • Donors appreciate being thanked for the impact they’re having. They (and clothes) don’t like to be used one time; then discarded. Ask: What can I do to assure my donors feel really thanked and appreciated over the long haul? How can I be more specific about the impact of their gift?
  • Donors like to be praised more than once. Ask: Who else in our organization might be enlisted to recognize and express gratitude to our donors from time to time?

In Part 2 releasing on March 23rd, we’ll learn two more things nonprofits can learn about donor retention from the practice of clothing upcycling. Now… go clean out your closet and see what’s in there!

The preceding is a guest post by Claire Axelrad, J.D., CFRE. Claire was named Outstanding Fundraising Professional of the Year by the Association of Fundraising Professionals and brings 30 years frontline development and marketing experience to her work as principal of her social benefit consulting firm, Clairification. Claire offers oodles of resources on her site, writes a monthly feature for Maximize Social Business on social media for nonprofits and is a frequent contributor to leading nonprofit resources including Nonprofit Hub, 4GOOD, Fundraising Success Magazine, Nonprofit.about.com and npENGAGE Experts. Claire Axelrad: Clairification was named “Best Fundraising Blog of 2013” by FundRaising Success Magazine.

Topics: Fundraising