Reprinted from Contributions Magazine
Today, losing donors has special urgency because more and more organizations are struggling to acquire new donors. Response rates are down exactly at a time when paper and postage costs keep climbing.
Your organization may also be facing sharp drops in giving from major donors who have taken a beating in the stock market. Every donor you lose—no matter at what giving level—creates more financial instability for your organization.
Put positively, increasing the loyalty of your donors produces huge benefits. The longer a donor keeps giving to you, the more likely it is that you will receive a major gift—often because that individual receives a windfall (or his or her children finish college). Those donors who stay with you year after year are also more likely to leave a charitable bequest to your organization.
So, what can you do to achieve this state of bliss?
- Send a thank you note as quickly as possible. For most donors, the greatest motivation for giving is a sense that their contributions are appreciated—and make a difference.
- Get the new donors on your newsletter mailing list right away—or send the most recent copy in a special mailing. Loyal donors feel they are well informed about organizations they support.
- Call your new donors and invite them to become monthly donors. Automatic gifts through electronic funds transfer or credit card transactions creates a group of donors with almost zero attrition.
- Keep your names and addresses as clean as possible. NCOA and PCOA processing should be a regular part of your mailing plan (and NCOA is required if you want to get postal discounts). If your mailings stop reaching donors, then they can’t give to you!
- Encourage donors to use an 800-phone number or a dedicated e-mail address to let you know about changes of address.
- Survey your donors—ask them for their advice and suggestions. You’ll find out some things you may want to correct. Just as important, your donors will feel more involved and engaged with your organization.
- Be sure to have enough mailings in your schedule. At the most mundane level, mailing frequently enough will provide you with corrected addresses as your donors move. At a substantive level, more mailings give your donors more opportunities to contribute—and keep them from lapsing.
- Make it as easy as possible for donors to make contributions at your Web site. For some groups, the home page is now the donation page. More and more individuals respond to mailings or newsletters by making an immediate gift on-line.
- Even if you’re not a membership organization, you'll want to have a "renewal series" of anywhere from three to nine mailings. The message "It's time to renew your annual support (or membership)"quot; wins hands-down against any other philanthropic proposition. Individuals don't want to let their support "lapse" or become "inactive."
- Let your donors know that you haven't heard from them. It's always startling to hear and read from individuals who say, "I didn't realize that it had been so long since I've given." A simple letter that starts, "I'm writing to you because our records indicate your last gift of $50 was in May 2006. If we've missed a recent gift, please let us know."
Not all of these suggestions are "easy." All will require an investment of time and energy. Some may involve additional expense, but all of these initiatives—even the survey—will generate immediate income. And, best of all, long-term loyalty.
As you implement some or all of these activities, be realistic in your expectations. One of the realities of fundraising is that even the best of organizations experience donor attrition. In any given year, 20 to 25 percent of those individuals who gave to you last year won't make a gift again this year. If your organization is acquiring or attracting a lot of new donors, then this attrition rate can be 30 to 40 percent.
Remember, the challenge of direct mail fundraising is that less than half (and sometimes as few as a third) of those who make an initial first gift go on to make a second gift. However, of those that make a second gift, two-thirds to three-quarters will go on to make many more gifts.
So focus on gifts and donors—and watch your donor attrition rate fall.
© 2009, Stephen Hitchcock. Reprinted from Contributions Magazine, vol. 23, no. 1; reprinted with permission.
Stephen Hitchcock is the author of Open Immediately! Straight Talk on Direct Mail Fundraising: What Works, What Doesn't, and Why.