The nonprofit sector is bleeding to death. It's hemorrhaging donors and losing millions monthly. Attrition is a horrible word. Its antonym, retention, has a golden ring to it.
What follows are the questions I'm most often asked about retaining loyal and committed donors.
Why do we hear so much about donor retention today?
Because for the past decade, donor-retention rates have been sinking. Today, they're at an all-time low. According to studies by the Association of Fundraising Professionals (AFP), every $100 raised from new donors is offset by $100 in losses because of attrition.
All this despite the facts:
- Organizations have a 60 percent to 70 percent chance of obtaining additional gifts from an existing donor.
- A 20 percent to 40 percent chance of obtaining an additional gift from a recently lapsed donor.
- But less than a 2 percent chance of obtaining a gift from a prospective donor.
So one thing should be blindingly obvious. The bulk of your fundraising expenditures should be aimed at holding onto and building relationships with existing donors, not in acquiring new ones.
Are there primary reasons why donors stop giving?
Yes, I detail them at length in my book Retention Fundraising. In short the main reasons are:
- Failure to properly thank and involve donors.
- Failure to place the focus of communications on the donor, rather than the organization.
- Failure to be consistent, both in message and in service delivery to the donor.
Organizations that brag about themselves and ignore donors will ultimately fail. Yet it's surprising how many organizations simply don't understand this.
Are there any easy, inexpensive steps we can take to hold onto our donors?
Surprisingly, there are. The three that come to mind quickest are:
- Say Thanks. You don't have much competition here. Our research shows that more than 60 percent of all nonprofits thank their donors impersonally, slowly, or not at all.
- Be Consistent. If you're consistent with your message you build trust. To a donor who gives money for feeding the hungry, switching the thank you to all the great stuff you're doing in the area of social justice is joltingly inconsistent, and you're likely to lose the donor.
- Be Reliable. Just as in personal relationships, reliability is essential. If a donor calls your service center with a question or a request for an address change and is met with a rude or unknowledgeable representative, you're on your way to losing that donor. Don't stint on donor service. It's the best investment you can make.
What experiences or outputs of an organization matter most to donors?
It's certainly not because you have 10 regional offices, a bright CEO, or even a great rating among the charity watchdogs.
Donors "hire" an organization for a variety of reasons, most of which have nothing to do with what the organization thinks is important. That's why it's key to understand which organizational actions inspire donor loyalty. I call these "drivers."
I've identified more than three dozen in my book, but seven are essential if you hope to retain your donors.
Is there a way to tell if a donor is about to leave us?
These are the telltale signs that a donor is about to abandon ship:
- Downgrading of gift levels
- Unsubscribing from your various e-newsletter and email lists
- Cancelling a recurring gift, such as a monthly retainer/sustainer payment
- Negative comments about you in social media
- Cancelling an event reservation
On the other side, are there obvious signs that a donor cares and is likely to be more loyal than others?
Absolutely. In my experience, the tip-offs are when he or she has:
- Taken the time to complain
- Reached out to change his/her address
- Gone to the effort to have his/her gift matched by his/her employer
- Attended a conference call briefing or actual meeting
The key to retention seems to be understanding donor attitudes. Is that correct?
Without a doubt. Attitude determines behavior. And that means donor behavior (giving) is determined by the actions you take to influence his or her attitude positively or negatively.
Few organizations understand that the actions they themselves take determine the donor's attitude—positively or negatively.
Importantly, all these positive and negative actions can be measured. The "good" reinforced. The "bad" eliminated, and the "weak" improved.
So if you could sum up the message in your book, it would be?
Not a single message, but several:
- Donors are made, not born. It is the actions you take—not the economy, not the competition—that determine whether your donors will stay or leave.
- You can measure commitment. This is not some fuzzy, loosey-goosey concept. There are methods, as outlined in the book, to determine what drives donors to you or away from you.
- Retention is hard work. Unlike acquisition that is as easy as signing a purchase order, retention takes time, skill, evaluation, and investment.
But it's worth it, you're saying, and all this effort will ultimately produce loyal donors?
I'll go out on a limb and say that anyone who follows the recommendations that our research has uncovered can expect as much as a 130 percent increase in income in the next 36 months.
© 2014, Emerson & Church, Publishers
Roger Craver is author of the new book Retention Fundraising: The New Art and Science of Keeping Your Donors for Life.