Building Donor Loyalty: What’s New?

Among first-time donors to nonprofit organizations, the median rate of attrition is 77 percent! In other words, more than three-quarters of all new donors to a charity walk in the front door and promptly exit out the back door. That’s the appalling finding of the Association of Fundraising Professionals Fundraising Effectiveness Project.

First Time Donor RetentionOver the past few months, the issue of high nonprofit Donor Attrition rates has received increasing attention. I’ve even put a spotlight on the issue with the following posts:

As I worked on those articles, I couldn’t help but wonder: What’s new and effective that can help us build donor loyalty? Well, we’ll soon find out.

Adrian Sargeant, PhD, Director of the Centre for Sustainable Philanthropy at Plymouth University, will be presenting “Building Donor Loyalty: What’s New?” at the AFP International Fundraising Conference (Baltimore, March 29-31, 2015).

Sargeant has been passionately conducting donor loyalty research for two decades. Sargeant and his colleague Elaine Jay wrote Building Donor Loyalty: The Fundraiser’s Guide to Increasing Lifetime Value.  Tom Ahern, the internationally recognized communications expert at the helm of Ahern Donor Communications, has described the text as: “Transformational.” I cited this informative book in my post: “Avoid Making Faulty Assumptions about Donor Loyalty.”

In his upcoming session at the AFP International Conference, Sargeant will demonstrate how even small improvements in loyalty, in the here and now, translate to whopping improvements in the lifetime value of a fundraising database.

Cover- Building Donor Loyalty -- click to see book at AmazonFor example, he has found that a 10-percentage point improvement in retention can lead to a 200 percent improvement in the lifetime value of the fundraising database!

Sargeant will also look at what drives loyalty, drawing on lessons from both the commercial and the voluntary sectors, including work on the big three drivers of loyalty: satisfaction, commitment and trust. He will also explore new work on loyalty that looks at the role of donor identity and the extent to which donors identify themselves in part through their support of a nonprofit.

Sargeant will show how the concept of identity interacts with the other three big drivers of loyalty and which of all these factors offers the greatest potential to the sector to bolster giving and grow long-term support.

Sargeant told me recently:

Fundraisers have for too long focused exclusively on the work the nonprofit does with the beneficiary, without giving adequate consideration to the impact of the organization on the donor (i.e.: How do our communications make donors feel and, consequentially, how might we add more value?).

”Too many organizations focus on the what of communication (i.e.: what email, mail, etc. a given segment of donors will receive). They regard this as the supporter journey. The supporter journey should involve a consideration of what will be said in those communications and at what point in the relationship those messages will be delivered.”

In other words, it’s not just how you communicate with donors; it’s what you have to say, how you say it, and when you say it.

Unfortunately, the nonprofit sector has been slow to address the Donor Attrition problem. Sargeant thinks this could be due to a number of reasons, including:

•  High levels of turnover of fundraising staff which makes continuity a challenge.

•  Few fundraisers have been exposed to the body of knowledge associated with their profession (i.e.: ask any group of fundraisers what the three big drivers of donor loyalty are, and you’ll get an embarrassingly interesting mix of responses).

•  Organizational metrics continue to focus on short-term performance, not the drivers of long-term value. This is typically a board issue, and it’s why we are driven to continue to recruit people who will only ever give once. The approach pushes up short-term Return-On-Investment and response rates at the expense of LTV.

•  Poor overall understanding of LTV and (what should be) its relationship with fundraising strategy.

•  The general lack of understanding concerning fundraising metrics.

If you want to learn more about how you can raise significantly more money by building donor loyalty to your organization, plan to attend Sargeant’s session at the AFP International Fundraising Conference.  If you’re unable to attend the Conference, an audio recording of Sargeant’s session, as well as other sessions, will be available for purchase shortly after the Conference.

By the way, I’m planning on attending the Conference. Let me know if you’ll be going. I hope to see you there.

That’s what Michael Rosen says… What do you say?

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