Donor retention is a worsening problem for the American nonprofit sector, according to Jon Biedermann, Vice President of DonorPerfect. In 2011, only half of first-time donors to a charity could be counted on to make a second gift. As bad as that retention rate was, it dropped to 49 percent in 2012.
Something must be done.
It’s challenging and expensive to acquire first-time donors. Charities must do a better a job of hanging on to those donors. Cost-efficient annual fund campaigns as well as major and planned giving efforts depend on loyal donors.
Fortunately, guest blogger Amy Eisenstein, ACFRE offers a simple idea that can help: “The Rule of Seven Thank Yous.” Her rule will help you retain first-time donors, loyal donors, small donors, and major donors — in other words, all donors.
Amy is an author, speaker, coach and fundraising consultant who’s dedicated to making nonprofit development simple for you and your board. Her books include 50 A$ks in 50 Weeks and Raising More with Less.
In her current Amazon bestseller, Major Gift Fundraising for Small Shops, Amy takes the complex subject of major gift fundraising and distills it down to its essential elements. The book provides a clear, methodical approach that any organization can follow. Great tips, real-world stories, check lists, sample forms, and more make this a book that you will keep on your desk and refer to often, that is if you want to raise more money than you might have thought possible.
I’m happy to share Amy’s advice about how to more effectively retain donors. Here’s what Amy Eisenstein says:
There are two main reasons that donors, including those who make major gifts, provide for not making a repeat contribution:
1. They didn’t feel thanked; and/or
2. They were never told how their first gift was used.
Fortunately, the answer to this dilemma is a simple one: donors give because doing so makes them feel good. This includes feeling appreciated for their gift and knowing that their check has fed more children, cleaned the environment, or in whatever way has made a measurable, positive difference to a cause they care about.
Your job, no matter how large or small your budget, is to make sure your donors are satisfied on both counts. Over the course of working with dozens of nonprofit organizations, I’ve developed a simple process to help you do just that whenever you receive a major gift.
You may have heard that you should thank a donor seven times before asking for another gift. Here is my version of “The Rule of Seven Thank Yous” works:
1. Thank the donor at the ask meeting (once they say “yes”).
2. Have a board member call to say thank you after the meeting.
3. Send a tax-receipt thank-you letter within forty-eight hours of receiving the gift.
4. Have the executive director write a thank-you card as a follow-up to the ask meeting.
5. List the donor in your annual report, on your website, and/or in your newsletter (get permission first, of course).
6. If appropriate, list your donor on a donor wall and/or thank the donor publicly at a special event.
7. Follow up six to eight months after the gift was made to let the donor know how you spent or are spending the gift. (While you’re doing this, it doesn’t hurt to add another thank you!) This update can be in person, by phone, and/or by email (depending on the size of the gift).
The point of this rule is to ensure that your donors are thanked several times by several people – your goal is to make your major gift donors feel that your entire organization knows about and appreciates their gift.
Obviously, the people who attend the initial ask meeting will thank the donor at the conclusion of the meeting. Afterward, though, you can pull in other high-level members of your organization to help with expressions of gratitude.
When stewarding smaller donors, the more personalized the better. However, you might not use quite the same process as you would with major donors.
While the Rule of 7 Thank Yous is the kind of time-intensive process you’ll want to save for your major gift donors, there are also things you can do to make sure that everyone who makes a gift feels thanked and knows how you’ve spent their money. If yours is a small organization with a tight budget, this can be as easy as sending a different letter to repeat donors than the one you send to first-time givers.
And of course, no matter how generic your lower-level stewardship has to be, make sure to let these donors know how you’ve spent their money before you ask them to give again, either by email, mail, or with a phone call.
The Rule of 7 Thank Yous for major gift donors, coupled with a solid process for making sure all donors feel appreciated and know how their money has been spent, will strengthen your organization’s bottom line both now and in the future. Implementing these processes will increase the number of people who make repeated gifts to your nonprofit, increase the size of the gifts they give, and build the kind of trust in your work that inspires planned giving in years to come.
That’s what Amy Eisenstein and Michael Rosen say… What do you say?