As more and more donors abandon ship, the cost of replacing them has grown so great as to be no longer affordable for most nonprofits.
It doesn’t have to be this way, as I show in my book Retention Fundraising. In those pages I outline a proven process for increasing donor retention.
Here I’ll touch on seven factors important for keeping your donors giving year after year.
Odds are 2 percent
The average nonprofit has a 60 to 70 percent chance of obtaining additional contributions from existing donors, but less than a 2 percent chance of receiving a gift from a prospect.
With these figures in tow, you’d think we’d be pouring the bulk of our marketing and fundraising dollars into retaining donors, rather than laying out large sums to acquire more and more new ones.
Sadly, we’re not. Too many boards, CEOs, and fundraisers haven’t accepted the new reality that there’s no longer a seemingly infinite pool of new donors available to quickly and inexpensively replace those who have stopped their giving.
In your control
Four in ten donors stop giving for reasons that are totally in the organization’s control to fix:
The donor received no information on how their contribution was used.
The donor never got thanked for giving.
The donor felt there was poor service or communication by the organization.
When it comes to donor defection, we know why donors stop giving, and yet through our own inaction we continue to jeopardize our own retention rates.
Consistency is no hobgoblin
Fixing the problem of donor loss begins with understanding the quality of consistency.
For example, you acquire a first-time donor using a powerful message to save the baby seals. It’s reasonable to assume the donor has a special regard for animals, in this case baby seals. So your follow-up appeals would naturally focus on your work in this area. That would be consistent. What you shouldn’t do is acknowledge the donor’s original gift with an equally powerful message about the dangers of plutonium and then follow up with a well-crafted appeal to help stop strip mining. There’s no consistency there. And chances are, no additional gifts. And, yet, countless organizations engage in this practice.
Indistinguishable is bad
Apart from those who literally die and those whose incomes shrink, your defecting donors don’t simply retire from charitable giving. They most likely give to something else, and usually in the same sector. They don’t typically switch from cancer research to Greenpeace, in other words.
This happens often when you fail to differentiate your organization as the best vehicle for meeting the donor’s aspirations—in other words, when you don’t appear much different from the competition. In this case, you’ve entered a zone of sameness where, with the exception of its name, your organization is indistinguishable from others. And donors who can’t distinguish one group from another aren’t especially committed.
Don’t think it’s your organization’s name and logo that differentiate you. Rather, it’s the collective set of communications and experiences you provide that triggers and reinforces a donor’s emotions and expectations. It is these that offer the best insurance that donors don’t drift away.
Sooner or later, most of us in fundraising come to realize that over-reliance on tchotchkes, baubles, and other gifts to boost response rates is a long-term prescription for poor retention and reduced lifetime value. There’s a reason some jokingly refer to premiums as “the crack cocaine of fundraising.” The analogy is literally true. Using controlled experiments, scientists have determined that extrinsic rewards activate the same part of the brain and same chemical (dopamine) as does cocaine.
When donors are offered a premium, their focus changes to the self-interested question of what’s in it for them rather than the benefit that springs from altruism. This is why the hoped-for conversion from a premium donor to normal donor seldom happens.
Driving Ms. Donor
In a DonorVoice study several years ago, donors were asked to rate what drives them to make a charitable contribution. Seven “drivers” emerged as the most important.
Perceives your organization to be effective in trying to achieve its mission.
Knows what to expect from your organization with each interaction.
Receives timely thank-yous.
Receives opportunities to make their views known.
Is given the feeling that they’re part of an important cause.
Feels their involvement is appreciated.
Receives information showing who is being helped.
You can begin immediately to improve your donors’ experience and retention by determining how these seven key drivers can be applied by your organization.
All donors are not equal, at least not when it comes to retaining them and increasing their lifetime value. The sooner you identify your best donors and where they come from, the sooner you’ll be on the road to profitability. That’s because you’ll be able to invest more time and money in the donors who have demonstrated their loyalty and commitment and less in those who haven’t. In lieu of developing your own scoring system, there are some signs of commitment and loyalty you should look for:
Length of time as an active donor
Size of gifts, including whether the gifts have been trending upward, and
Involvement and engagement with you as a volunteer.
There are also some other signals that may be helpful in identifying your better donors. These include if a donor:
Has taken time to complain
Has gone to the efforts of having their gift matched by their employer
Has attended a conference call briefing or actual meeting
With respect to identifying your best donors, the question at the forefront of your mind should always be “What did we do that created the donor’s positive attitude?”
Roger Craver is author of Retention Fundraising, from which this article is adapted. Craver helped launch some of the household names in the nonprofit advocacy sector, including Common Cause, Greenpeace, the National Organization for Women, World Wildlife Fund, Habitat for Humanity, and Amnesty International.