Donor Retention

Wooing Less Committed Donors

Let me start by saying this is not another blog about the ALS challenge.

Yes, it’s been amazing. And yes, it proves that when celebrity, social media and peer-to-peer energy align perfectly, magic happens.

But that’s not what this is about.

This blog is about what happens six months to a year from now … when ALS works to convert the thousands (maybe millions) of new donors into regular supporters. 

Many nonprofits faced a similar challenge in the months and years following 9/11. The outpouring of generosity was nothing short of astounding. But when the mood faded, keeping the donations flowing in proved difficult.

If your nonprofit has brought in a sizeable number of new supporters, you may be wondering “What’s next?”

Here are a few tips to maximize your success:
  1. Act Fast—Don’t wait to start communicating with your new donors. Following the moment of donation, begin thinking about what they’ll hear from you. The longer you take, the less likely you’ll retain them. Be sure to collect email addresses to make this easier.
     
  2. Remind Them of Their Commitment—Tap into the emotion that made them give in the first place. Reinforce how they will feel when they make another gift. If they gave through a friend or loved one, remind them of that, too.
     
  3. Create a Separate Communication Track—Many nonprofits simply put their new donors into the standard stream of donor communications. Take a critical look if that even makes sense. Their commitment may not rise to the level of the rest of your donor base. How can you customize your communications to address that or orient them to the organization?
     
  4. Know When to Cut Your Losses—Hard as it is to say, some donors will NEVER convert. There, I said it. Consider how long and how much you’ll invest in cultivating less committed donors, and then hold firm to your choice. You’ll be glad you did.

You're Doing It Right—Spontaneous Online Gifts

One of our clients has had a lot of large unsolicited gifts come in online lately. Our interest is piqued because we're not in the middle of a campaign. There's nothing radically share-able that's been released. If I had to say it, this part of the quarter is a relatively quiet and calm period for this group.

Then it hit me.

This is when you can see your annual plan pay off. The consistency and authenticity of your workhorse communications make all the difference, e.g., newsletters, e-newsletters, alerts, tweets, etc. Being in front of your donors with useful information and copy that shows them exactly why they're so important keeps your group top of mind ... in a good way.

So when they feel moved to give, you're at the top of their list.

You've built a relationship with them that isn't reliant upon a hard ask or gimmicky campaign for support (written with full appreciation for the well-timed usefulness of the hard ask and gimmicky campaign). They feel involved—they feel necessary—to the success of your organization's work. They give freely and with a full heart.

That's when you know you're doing it right.

Raising the Bar on Retention

“Retention Is The New Acquisition” shouts the headline of a recent post in The Agitator, a position that fundraising legend Roger Craver has been rightfully advocating for some time now.

I think many nonprofits are beginning to heed that call. 

Donor notifications have become thank you messages ... Autoresponders are in place to welcome and inform new constituents ... Newsletter have been retooled to focus more on stories about the successes donors help achieve ...

So now what? 

How do you take retention management beyond simply generating a second gift from first-time donors? (Although that is a sizable enough challenge in its own right!)

Over the past few years, as we’ve helped several clients improve their understanding – and management – of donor retention, a few key themes have emerged. 

1) Not all donors are created equal.

It’s important to understand which donors are generating the most revenue (among annual fund donors, not just major gifts).

While it’s sometimes helpful to consider overall averages (average gift size, average retention rates, average annual giving, etc.), a more focused perspective is much more telling. 

When we showed a food bank client that fewer than one-fourth of their donors accounted for well over half of donor revenue, they quickly began to think of ways limited staff resources could be targeted to take even better care of those key constituents. Now, five years later, retention among this valuable segment has grown from a healthy 78% to a robust 85%. Average annual giving is up nearly $65 per donor as well.

Moral of the story: Your best donors warrant your biggest investment.

2) Money isn’t all that matters.

Typically transactions (donations) are only one type of interaction between an organization and its supporters. Other interactions may add – or at least indicate – value as well.

  • For that food bank client, only 13% of company donors also provided volunteers. The companies that did were more likely to give again (88% vs. 50%) and to give significantly more (by a factor of three!)
  • A religious organization has found that constituents who submitted prayer requests are more than twice as likely to make a contribution. 
  • A health care cause knows that donors who also participate in local events are more than twice as likely to give again. 

Simply put, more usually means more. You just have to figure our more of what and by how much.

Moral of the story: Unless you track other types of interactions, you’ll have no idea which ones matter … or how much.

3) Churn isn’t just about ‘coming’ and ‘going.’

Every year some new donors come in and some existing donors go away. And every year some returning donors give more than they did the prior year and some returning donors give less. 

Wile most development directors can readily report how many new dollars came in or how many potential dollars lapsed, few are following current donor activity closely enough to know who is giving more – or less – this year. 

And yet, for retention management, wouldn’t it seem smarter to try to do something about those declining dollars now, while the relationship still exists, rather than in a year or more when the relationship may not be in place?

Moral of the story: If you want to take retention management to a new level, you’ll need to upgrade retention metrics as well!

The bottom lime: you manage what you measure. In our experience, when an organization shifts its metrics to focus on retention, it finds itself shifting priorities as well.

And you can't start too soon!