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Embrace Relationship Fundraising to Stop Losing Donors

broken_heart-1.jpgDo you regularly break your donors’ hearts?

If you’re like the average nonprofit, sadly, you do.

It’s not conscious, of course.

But that doesn’t make it any better.  You’re not excused for being asleep at the wheel.

Remember the old adage: “Do unto others as you would have them do unto you.”

Now think about what you’re doing to your donors -- most of the time – when you’re not asking for money. What, you say?  You’re not doing anything?

Exactly. When you ignore your donors, don’t be surprised when they respond with a “back at you.”

Think about this from your donor’s perspective.  You’ve told your nonprofit’s story, and they’ve swooped in to give that story a happy ending. They’ve opened their hearts and voluntarily given their hard-earned money in order to give someone… some place… some cause… a positive outcome. 

They feel a bit trepidatious.  Did they make a good decision?  Or did their money go into a black hole? Did they give enough to do the job?  Did others help too? They wait anxiously to hear back from you.

Then you short-change them.

Instead of warmly welcoming them into your family, letting them know how much they’re appreciated, telling them you’re thinking about them fondly and generally keeping them close and letting them know how important they are to you, you send a perfunctory thank you. Then nothing much else. Until you want another donation.

Or perhaps you do update them, but you talk about what you accomplished, rather than what they did. Or about how great the need still is, rather than how much they helped you progress towards a cure.

You leave them hanging.

And guess what happens?  Nothing. Nada. Zippo. Your budding relationships are nipped in the bud.

Nonprofits are losing donors by the bushel!

By tending to focus more on expensive, staff-intensive acquisition strategies like direct mail and special events, charities are bringing in one-time donors who never give to them again.  Donor retention (excuse the expression) sucks.

The latest Fundraising Effectiveness Project Report revealed that an astounding 81% of first-time donors lapse. Of repeat donors, 37% lapse. For every 100 new donors acquired, on average nonprofits lost 96 existing donors.

This is the proverbial three steps forward, two steps back – only worse!

This burn and churn strategy is killing nonprofits — and burning out the folks who work in them.

The end-of-the-year numbers tell the story. Overall, an average nonprofit keeps just 46% (4.6 of 10) of donors vs. 94% (9.4 of 10) of customers for businesses. Why the disparity?

In the for-profit world it’s common knowledge that it costs much more to secure a new customer than to retain an old one. So businesses, because they know it’s cost-effective, focus on customer service. Otherwise, they’d run out of potential customers pretty soon. They’d go out of business.

Somehow too many nonprofits haven’t fully grasped the same holds true with donors and nonprofit businesses.  Your supporter world really isn’t infinite (even in the digital age).  If you keep ticking folks off after they’ve given to you, you’re not likely to keep them for long. Or their friends, family or colleagues either. Word gets around.

You can’t keep losing ground at the rate at which the average nonprofit today is losing it.

This is why I’ve chosen to focus on mastering donor retention as one of my “Dive the Five” priority strategies all nonprofits must excel at in 2016 — and beyond. And it’s why I want to alert you to a new report:  Rogare’s Relationship Fundraising: Where Do We Go From Here.

This report may change the way you do fundraising.

It should.

I hope if you read the latest fundraising research to come out of Rogare you will have a “light bulb” moment or two.

If you’re unfamiliar with Rogare (Latin for ‘to ask’), it’s fundraising think tank at Plymouth University’s Hartsook Centre for Sustainable Philanthropy and the home of the Critical Fundraising blog which regularly evaluates what fundraisers know, or think they know, about their profession.

Last year I had the honor to serve as part of an international Advisory Panel to Rogare, in a project jointly funded by US donor management software company Bloomerang and American fundraising agency Pursuant. This was the first major study on relationship fundraising conducted in 25 years. Other advisors included such well-known nonprofit experts as Ken Burnett, Sean Triner, Craig Linton, Tom Ahern, Simone Joyaux, Jay Love, Gail Perry, Marc Pitman, Kivi Leroux Miller, Kent Stroman, and more. We embarked upon an almost year-long, international effort to evaluate the status of relationship fundraising by incorporating ideas from psychology and relationship marketing science. Then recommendations for moving forward to stop the leaking bucket syndrome and drive greater donor commitment were made.

The four-volume report is now available to download. I strongly encourage you to do so. And also to subscribe to Critical Fundraising to follow ongoing discussions on this important topic.

Volume 1 – Examines the evidence for relationship marketing in the commercial sector and assesses whether, and under what circumstances, this can be transferred to fundraising, or if there are times when transactional approaches are appropriate.

Volume 2 – Explores how fundraisers can utilize and adapt current and emerging theories in social psychology to build better relationships that help meet their donors’ needs.

Volume 3 – Leading relationship fundraising practitioners from around the world describe current trends in relationship fundraising and outline some of the key challenges they think it faces, and what the profession needs to do to meet those challenges.

Volume 4 – Summarizes the findings from volumes 1-3 and recommends future directions that relationship fundraising could take.

If you’re strapped for time, here are two bottom-line takeaways for you:

Before you enact any fundraising or marketing strategy, always ask the donor-centric question “What’s in it for me?

If the donor can’t see why they should say “yes” – be it to accepting an invitation to coffee, coming on a tour, opening an email, sharing a link on social media, or making another gift – then you’re not going to get very far down the road with them.

Get inside your donor’s head, and think consciously about what may connect with them.

Isn’t this what you would do with anyone with whom you wanted to build a deeper, lasting relationship?

  • What may be relevant and meaningful to them?
  • What may reward them for their incredibly important support?
  • What may make them feel special?
  • What may make them feel like they belong?
  • What may make them feel they’re part of something important – something larger than themselves?

If you can stand in your donor’s shoes, and show them you know them, you can’t help but improve your results.

Before you ask for another gift, be sure to send stories and reports that clearly demonstrate the impact of your donor’s philanthropy.

A fundraising program that focuses on one-time transactions won’t get you very far. You need to build a business model that moves your organization steadily forward – based on your reputation for effectiveness and service. You won’t build this reputation unless you put work into it.

Get inside your donor’s head, and think consciously about what they may like to know about the impact of their philanthropy.

Communicate. Frequently. Generously.

Donors lament that reporting, if it happens at all, rarely includes accountability for how their contributions were spent and what was achieved. However, when this information is provided to donors, they are ready to give again almost immediately.

Research shows the primary reasons why donors leave are closely connected to failed communication strategies. Ongoing communication is the foundation of any real friendship and, not surprisingly, the key to fundraising sustainability.

If you will comply with donor wishes, and meet their straight-forward requirements for donor acknowledgements and donor-centered communications, they are more than willing to stay loyal and give even more generously in the future.

Folks, this really isn’t rocket science. It’s pretty simple stuff.

There’s tons of competition for donor dollars today.

You must do something intentional to make donors happy and assure their loyalty; donors will not otherwise stick with you.

Got it?

Let’s review.

To stop losing donors and gain ground requires you to (1) actively show donors the impact they’ve made through their philanthropy, and (2) frequently remind them they are heroes for having come to the rescue.

I am convinced that if you do just these two things, consistently over time, you will raise a lot more money from current donors and lose a lot fewer of them.

claire-axelrad.jpgThe preceding is a guest post by Claire Axelrad, J.D., CFRE. A version of this article originally appeared on Clairification June 19, 2016. 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.

Topics: Fundraising Donor Relations Fundraising Strategy