Some rules are meant to be bren. These three aren’t. Never. That is, unless you want to continue to lose donors hand over fist. If you’re the average nonprofit you’re retaining only 19% of first-time donors and 44% of all supporters. The Fundraising Effectiveness Report reveals the depressing data. It shows a pattern of donor…
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What do you spend more time on? Asking or thanking?
The lion’s share of nonprofits spend more time asking. It’s a BIG mistake. Don’t get me wrong. I’m not here to shame or blame you. Of course you have to ask. The number one reason people don’t give is they aren’t asked. And …
The number one reason donors don’t give again is they aren’t properly thanked!
Believe me, most donors aren’t sticking around. Your own retention rates may be better or worse than average (do you know them?), but generally only 19% of new donors give again. For ongoing donors, it’s just 45%.
The time to nip this in the bud is now.
Did you know a study from Charity Dynamics and NTEN found 21% of donors say they were never thanked at all? My hunch is some of these supporters did receive something from you, but it was so perfunctory they didn’t really take notice. Maybe you just send a receipt. Or took them to a thank you landing page; then called it a day. Or maybe they received a brief, formal email that confirmed the gift, but didn’t make them feel particularly special.
If you don’t have a killer thank you letter prepared to send to the folks you hope will be giving to you between today and the end of the year, now is the time to right this wrong.
In fact, research from Penelope Burk, author of Donor-Centered Fundraising, found 70% of donors reported they would increase their giving if they received what they needed from you.
Brilliant, warm, authentic, personal communication stands out and leads to renewals. And this is a much less expensive strategy than new donor acquisition, which costs from $1 to $1.25 to raise a dollar. Whereas renewing a donor costs only 20 cents on the dollar.
By now you may be thinking: Sounds good, but how do we stand out? There must be some specific strategies that incline donors towards giving again, but what are they?
Today I share my top secrets with you. They’re simple and foolproof.
Ready?
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I hear a lot of complaining about donors.
They should do this:
They shouldn’t do that:
What about what YOU should and should not do to build sustainable, fulfilling relationships with your supporters?
I hear too much of “We already sent a thank you; that’s enough, and they shouldn’t expect more.”
Shouldn’t they?
Donors are people first, philanthropists second. And people need to know they’re important to you.
Let me tell you a true story.
DetailsA close friend of mine used to complain to me about her husband all the time. Why? Because he didn’t tell her he loved her enough. Understatement of the year.
You’ve got to make donor retention more of a priority to survive and thrive in today’s competitive nonprofit marketplace.
Research shows the average nonprofit in the U.S. loses 81% of donors after the first gift!!!!!
In and out a revolving door is too expensive to be sustainable.
To make matters worse, the probability a donor will make five consecutive gifts is only 10-15%. These numbers are just not sustainable for most organizations. By the time you’ve added a new donor most of your previous new donors are out the door.
And, by the way, did you know donor acquisition costs you money? Yup. On average, it will cost you $1.00 – $1.25 to bring in a new donor dollar. So… the value of a new donor to your organization is wrapped up in the concept of donor lifetime value. Once you have a new donor, the cost to renew them is much less expensive than the cost to acquire them. Just like in for profit marketing, keeping a current customer is easier than finding a new one. But… you have to actively engage in customer cultivation and renewal strategies.
If you don’t energetically renew and upgrade donors over time, you may as well never have recruited them.
Allow that to sink in a moment.
Might you effectively be wasting a lot of time, energy and money on acquisition? Could some of your resources be more effectively deployed to donor retention?
I’m going to go out on a limb and wager the answer is a resounding YES.
Do you know what your donor retention rate is? If you do, there’s hope for you to improve it. Read on.
If you don’t, you don’t even know there’s something that needs fixing! Read on.
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What do you most need to sustain your nonprofit through thick and thin?
A steady, reliable source of income – natch!
For most nonprofits this means loyal donors.
How do you get them?
Alas, too many nonprofits act as if all they need to do is acquire the donor; then, magically, that donor will stick with them forever. Sadly, the data shows otherwise. On average only 20% of first-time donors renew; only 43% of all donors renew. And there’s a very good reason this sorry state of affairs exists.
It may not happen all the time. But it happens enough. Too often, in fact. Does this look at all like the trajectory of how you handle a newly acquired gift?
Actively show donors love and trust. This is the best way to get them to love and trust you, and the two most important aspects of donor loyalty. Relationships that last are reciprocal. Penelope Burk, the queen of donor-centered fundraising, famously found through her research that donors’ number one desire is … please, please “show me that you know me.” If you want donors to trust you and be loyal to you, you have to trust them and be loyal to them. Simple, yes? Actually, no.
To earn trust and loyalty takes strategy. And it takes work. Mark Schaefer makes a brilliant analogy
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Trust defines the credibility and legitimacy not only of your organization, but of the entire social benefit sector. Yet too few organizations make the effort to operationalize this construct into their fundraising and marketing planning.
You should.
Without donor trust and confidence in philanthropy there’s no future for social benefit organizations.
Donor retention guru Professor Adrian Sargeant has spent 20+ years researching the relationship between trust, philanthropy and continued donor commitment. And he has found, unequivocally, that trust is the essential foundation of the philanthropic relationship.
Ignore this at your peril.
The Donor’s Bill of Rights is a great starting point. But simply using it as a checklist is not enough. Too transactional. I encourage you to go above and beyond. Because the best predictor of future giving is when people feel good.
You can make giving to you a transformational experience. How? By actualizing what you learn here into a series of multi-step plans for:
If you take these five steps, I can guarantee you’ll steadily build trust and make donors happy. What I’d like to do now is break these steps down into 10 action strategies. They may seem simple, and they are. But honestly ask yourself if you really do these things? I’m going to guess you could do better. So please read these with an eye to what you might do to make your donor retention plan – what I prefer to call a “donor love and loyalty plan” – more vigorous.
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Have you ever made a phone call hoping to talk with someone, but instead reached voice mail?
Of course you have!
Does that mean you don’t ever make phone calls?
Of course not!
What do you do?
You leave a message and ask the person to call, email or text you back.
Sometimes they do, sometimes they don’t.
But at least they know you reached out to them. If they want to connect with you, they now have an invitation to do so. And if they know you, and like you, they’re very likely to return your call.
Donors know you. They like you. Otherwise they wouldn’t have made a gift to you.
So why are you, or your board members, so afraid to pick up the phone to thank them?
All the time nonprofits tell me “Asking our board members to make thank you calls won’t work, because people screen their calls these days; they won’t pick up.”
Sometimes they will, sometimes they won’t.
Either way, you’ll have accomplished something important merely by proactively reaching out.
Stop worrying about how your donors will or won’t behave. Instead, worry about how you’re behaving. Or not.
Don’t donors deserve thank you calls?
Of course they do!
Penelope Burk, author of Donor-Centered Fundraising, found 91% of donors said this is their number one preferred method of recognition.
Greg Warner of Market Smart writes a lot about the difference between “work” and “progress.” I appreciate the distinction, both professionally and personally. I think you can use this notion, so I’m going to suggest a way to extend this idea to your nonprofit fundraising.
Warner notes in Why You Should Never Get a Job and Go to Work: “work” is tedious and negative; “progress” is inspiring and positive.
This is about being intentional about where you’re going.
It’s somewhat about perception and desitnation, but I’d argue it’s largely about the journey.
Your journey. Your donor’s journey.
And how everyone feels about the endeavor.
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Giving is an emotional experience. It deserves an emotional response.
Be human.
Ever notice how sometimes when we put on our work hats we cease to be human? How we somehow morph into little robotic “professionals” and become enamored of jargon?
“Lybnts.” “Sybnts.” “Recaptures.”
Not that those things aren’t important. You need goals and objectives.
And given the dreadful state of donor retention in the U.S. today (and in the U.K and Canada as well), it’s vital you be able to measure how you’re doing. Because growth in giving is a factor not just of how many new donors and dollars you acquire, but also of how many donors and dollars you lose.
If you lose as many current donors as you gain new ones, you’re getting nowhere. Fast.
Slow down.
Think about what you’re doing and why. You may need to change your frame of mind.
When you acquire a new donor, is it for that one-time transaction? If so, that’s not a very thoughtful strategy, because it costs more money than you make to acquire new donors. In fact, you likely won’t make back your investment for 18 months or so. You won’t make it back at all if you don’t renew that donor.
Nonprofits, sadly, have been on a non-stop treadmill. Donors in. Donors out. Donors in. Donors out. So… something about just measuring this stuff isn’t really working.
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One of my pet peeves as a donor is making a contribution (via a peer-to-peer request or tribute gift in honor or memory) in support of a friend; then receiving nothing but a form receipt.
Some of you may be thinking, “That’s exactly how I like it; now I have no reason to get sucked in as an ongoing donor to this organization.”
Exactly.
Your job as a fundraiser and nonprofit marketer is this: Suck. People. In.
… with the good stuff.
Draw folks to you like bees to honey.
Give them something sweet and irresistible.
A one-time formulaic, “thank you on behalf of the board and staff of XYZ charity for your $50 gift,” won’t seduce or tempt me in any way. It won’t make my heart sing.
If you don’t reach your first-time donor’s heart immediately with something that makes them feel warm and fuzzy, guess what happens? When you come back to them a year from now with an annual giving appeal, they’re highly unlikely to make another donation. They don’t care about you. They car(ed) about their friend.
When I give in honor of someone else, to a charity to which they’ve directed me, I tend to feel a little bit good because I did something meaningful to them. But… I don’t feel good because it was meaningful to me.
Unless the charity does something proactive to make their cause resonate with me more directly, I’m not likely to be a repeat donor to this organization.
So don’t kid yourself.
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