[Publisher’s Note: From time-to-time, I will invite an outstanding, published book author to write a guest post. If you’d like to learn about how to be a guest blogger, click on the “Authors” tab above.]
This week, I have invited international fundraising superstar Roger M. Craver, a direct-response fundraising pioneer, Editor at The Agitator, and author of Retention Fundraising: The New Art and Science of Keeping Your Donors for Life to share his wisdom with us.
However, do we really need a book about something as fundamental as donor retention? I believe we do. And so does Ken Burnett, Managing Trustee at SOFII and author of Relationship Fundraising. Here’s what Burnett says in the Foreword to Craver’s book:
Our nonprofit sector is bleeding to death. We’re hemorrhaging donors, losing support as fast as we find it, seemingly condemned forever to pay a fortune just to stand still.
It’s time we stemmed the flow.”
While the latest Fundraising Effectiveness Project report, developed by the Association of Fundraising Professionals and the Urban Institute, shows that the nonprofit sector’s donor retention rate has improved for the first time in years, the number is still wretched. The nonprofit sector’s donor retention rate now sits at a shameful 43 percent! For every 100 new and renewed donors, 102 donors are lost through attrition.
As a sector, we must stop this donor churn. It’s expensive. It prevents organizations from building long-term relationships that lead to large current donations and significant planned gifts.
Sadly, doing business as usual is not working. It’s time to change the way we do things.
Fortunately, the solution to the donor retention problem faced by the sector is not overly complicated or pricey. It simply requires a commitment to change. Once you’re committed to enhancing your organization’s donor retention rate, Craver’s mercifully brief and easy to read text will show you the way. Based on science and decades of practice, Craver’s book will explore what measurements are important to track, what tactics you need to adopt, and what messaging secrets you need to learn.
Noted philanthropy researcher and author Adrian Sargeant finds that “even small improvements in the level of attrition can generate significantly larger improvements in the lifetime value of the fundraising database. A 10 percent improvement in attrition can yield up to a 200 percent increase in projected value.”
By following the advice found in Craver’s book and its companion website, you will be able to improve your organization’s donor retention rate. With increased fundraising effectiveness, your organization will be far better positioned to fulfill its mission today and well into the future.
Here’s an excerpt from Retention Fundraising that further reveals the problem faced by nonprofit sector:
I’ll never forget the little old lady.
Early in my career I called on her to discuss the college’s plan for a new library, hoping she’d become a major contributor. She served tea and little cucumber sandwiches. We chatted amiably and then got down to business.
With great enthusiasm I showed her the architect’s schematics, explained why it was a sound idea to raze the old dorm that had stood for ninety years, and how attractive the new library would be in its place.
My confidence grew as she took it all in. She asked bright, incisive questions and didn’t wince when I suggested the amount of a gift that would represent her share of the project.
“Young man,” she said as I concluded, “I’m very impressed. But I won’t be contributing to this project.”
I was startled. “May I ask why not?”
“Well, you see, I’m all in favor of progress, but I’m absolutely opposed to change.”
All too many of our organizations are like that little old lady. We claim we’re in favor of income growth and a sustainable future. But in practice we ignore the huge fundraising changes that threaten both. We blithely continue doing the same old things, ignoring the eventual and inevitable day of reckoning.
Surprise! That day has already arrived. Year after year for the past decade, donor-retention rates have been sinking. Today they’re at an all-time low. In a 2013 study by the Association of Fundraising Professionals, only 65 of the 2,377 organizations surveyed had a retention rate over 70 percent! (Sadly, the study contained no profiles of the 65 high-retention organizations.)
That same study also found:
Flat Fundraising. Every $100 raised from new donors was offset by $100 in losses.
Negative growth in the number of donors. For every 100 donors acquired, 107 were lost through attrition.
Small organizations suffering most. On average, charities raising more than $500,000 lost $90 for every $100 raised. Those raising between $100,000 and $500,000 lost as much as they gained. And organizations raising $100,000 or less lost $110 for every $100 raised.
In brief, the days of the seemingly infinite pool of new donors available to quickly and inexpensively replace those who’ve stopped their support are long gone.
Today, 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. Consider this:
The average nonprofit has a 60–70 percent chance of obtaining additional contributions from existing donors; a 20–40 percent probability of securing a gift from a recently lapsed donor; 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.
But sadly we’re not. Too many of our boards, CEOs, and fundraisers haven’t accepted the new reality of a world that’s never going to return to the good old days.
Fortunately, there is good news. There’s a proven process now for increasing donor retention—for plugging the holes in the bucket through which our donors are pouring.
This process outlined in this book is based on empirical evidence. By understanding and putting it to work, we can add tens of thousands or even millions of dollars to our organizations’ bottom lines.
All that’s required is adopting new mindsets, new metrics, and new methods—all of which we can learn quickly and start to apply immediately.
I invite you to comment below and ask whatever questions you might have. Roger and/or I will respond.
That’s what Roger Craver and Michael Rosen say… What do you say?
Michael Rosen Says... 