Posts tagged ‘donor attrition’

October 4, 2019

The 4 Pillars of the Donor Experience

Your nonprofit organization has a serious problem. While you are expending enormous energy to attract, retain, and upgrade donors, things aren’t working out as well as they could. As a sector, charities are doing a horrible job of hanging on to supporters.

Let’s be clear. The low retention rate among donors is not their fault. Instead, the fault rests with charities that do not ensure a donor experience that inspires long-term commitment.

Fortunately, there’s something you can do about this. You can enhance the experience of your donors and thereby increase your chance of retaining them and upgrading their support. A new book by Lynne Wester, The 4 Pillars of the Donor Experience, will show you the way.  Lynne is the principal and founder of Donor Relations Guru  and the DRG Group. In addition to her books and workshops, she created the Donor Relations Guru website to be used as a unique industry tool filled with resources, samples and thought leadership on donor relations and fundraising.

I first encountered Lynne several years ago at an Association of Fundraising Professionals International Conference. She was leading a mini-seminar in the exhibit hall hosted by AFP. As I was walking past, her talk stopped me in my tracks. She was entertaining while talking about a subject that seldom is properly addressed at fundraising conferences. And her thoughts about donor relations resonated with me. I’ve been a fan ever since.

Lynne’s latest book, which is graphically beautiful and accessible, breaks down the philosophy of donor engagement while providing concrete strategies, tangible examples, and a whole slew of images and samples from organizations across the nation who are doing great work. The book is interspersed with offset pages that really drive home the theories outlined and provide specific examples that nonprofit professionals constantly crave and request. You’ll find key metrics, team activities, survey questions, and so much more. If you want to improve your organization’s donor retention rate, get Lynne’s book and improve the donor experience.

I thank Lynne for her willingness to share some book highlights with us:

 

When I sat down to write The 4 Pillars of the Donor Experience, I wanted it to be a continuation of our thought work in The 4 Pillars of Donor Relations. But honestly, I wanted it to be a book that was read beyond donor-relations circles and practitioners and instead shared across departments and read widely by the nonprofit community.

Why? Because we have a huge problem facing our sustainability in nonprofits and that is donor retention. With first-time donor retention rates hovering below 30 percent, and overall donor retention less than 50 percent, we are in danger of losing our donor bases. We see this in the fact that 95 percent of our gifts come from five percent of our donors and, in higher education, the alumni giving rate is falling each and every year. My belief is that most of these declines can be attributed to our behavior and our insistence on ignoring the donor experience.

The donor experience is everyone’s responsibility and it requires much more than a thank you letter and an endowment report. It is a mindset. The four pillars—knowledge, strategy, culture, and emotion—can be applied in a wide variety of areas.

Knowledge is essential because it lays the foundation for all of our actions with donors. Far too often, we make dangerous assumptions that affect the donor experience. Getting to know your donors is essential. Look beyond the basic points of information and dig into a donor’s behavior and also communication preferences. Gathering passive intelligence is inextricable from the practice of crafting the donor experience. Seeking active intelligence is essential. What information are you gathering through surveys, questions, and intelligence gathering? Intentional feedback can help you prove your case for additional human and financial resources, new programs or initiatives, and gives you new content and activity to test.

In addition, consider how you can use this information to enhance the donor experience for all donors, regardless of level. Curiosity and tenacity are encouraged in this space. Being intentional is a mindset, a new way of operating and data drives all that we do. It’s your responsibility to gather as much data as possible to help build the strategic case for your donors and their experience.

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April 17, 2015

Is It Better or Worse to Send More Appeals?

Part of me is definitely a fan of conventional wisdom. Come on. What’s not to like about wisdom?

On the other hand, part of me hates the notion that we should continue doing things because that’s the way they’ve always been done. All too often, conventional is code for mediocre.

In other words, I think it’s wise to regularly challenge conventional wisdom, so long as we do so thoughtfully and preferably with good data.

So, being a good fundraising nerd, I enjoyed reading a number of articles this week that explore how often charities should send appeals to donors.

Let’s start with the conventional wisdom:

The more appeals you send, the more money you will raise.

Change in Hands by Randy Willis via FlickrAndrew Olsen, CFRE, Vice President of Client Services at the Russ Reid Agency, tested the conventional wisdom. In his blog post “Fundraising Myth Busters: Solicitation Frequency,” Olsen concludes, “Don’t be afraid to add a solicitation or two to your annual line up. As this case shows, you stand to make a lot more money for your cause if you do!”

In his post, Olsen shared testing that was done for two nonprofit organizations:

  • In the first case, the organization went from five to 10 solicitations, and year-over-year revenue increased 123 percent.
  • The second organization increased from three to six solicitations, and year-over-year revenue increased 110 percent.

Given that the highly respected Russ Reid Agency conducted the tests, I had to take notice. However, Olsen’s post raised more questions for me than it answered:

  • While gross revenue increased in both test cases, did net revenue increase significantly?
  • What impact does increasing the number of appeals have on long-term donor retention?
  • How does increasing the number of appeals impact donor Lifetime Value (LTV).
  • If revenue went up, why stop at six or even 10 appeals? Why not send an appeal out monthly, weekly, daily, hourly? When should we stop?

With these questions nagging at me, I was relieved to see that direct-response guru Roger Craver wrote a four-part series on the subject for The Agitator blog (Note: The Agitator is now a paid subscription site.).

Craver looked at solicitation frequency a bit more closely than Olsen did. For example, he reported that the net income from successive appeals goes down after a point. He also showed evidence that some donors on a file are more receptive than others to multiple appeals. While not surprising, it is nice to see the data on this and have a chance to reflect on how screening for solicitation-frequency preference can affect net revenue. Craver shows that sending fewer appeals, particularly to certain individuals, can lead to greater net income.

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February 20, 2015

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:

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February 17, 2015

The Greatest Idea for Retaining and Upgrading Donors

Every charity wants more money from donors. If only existing donors would write larger checks, become monthly supporters, make a major gift, and/or commit to a planned gift, there would be less pressure on the fundraising staff and the organization would be able to do more to fulfill its mission.

But, how can you raise more from your donors if they do not stick around?

Nationally, the median nonprofit organization finds that its donor retention rate is just 43 percent! Among first-time donors, the retention rate is an obscenely low 23 percent! (The stats come from the AFP Fundraising Effectiveness Project.)

Donor Retention 20013-14The good news is that if you can increase your nonprofit organization’s donor retention rate by just ten percentage points, you could see an increase of up to 200 percent in donor lifetime value, according to researcher Dr. Adrian Sargeant. In other words, if you retain more donors, they will increase their giving and some will even encourage others to support your organization as well.

Unfortunately, increasing your donor retention rate won’t happen all by itself. You need to make it happen. So, what is the simplest, most effective tactic for accomplishing this?

Telephone by laerpel via FlickrDo you see that shiny box on your desk? It’s probably black with some flashing lights, and it’s plugged into the wall. It’s a telephone. Pick it up and call your donors to thank them for their support. While you’re at it, find out why they support your organization.

Yes, it really is that simple. CALL YOUR DONORS!

Multiple research studies have proven that thank-you calls are a powerful donor retention tactic. For example, Penelope Burk, in her book Donor Centered Fundraising, reports:

•  95 percent of study donors stated they would appreciate a thank-you call within a day or two of the organization receiving their donation.

•  85 percent said such a thank-you call would influence them to give again.

•  84 percent said they would definitely or probably give a larger gift.

Burk went on to report, when donors were tracked after 14 months, the group that received a thank-you call gave 42 percent more on average compared to similar donors who did not receive a thank-you call. During the renewal cycle, those who received a thank-you call were 39 percent more likely to renew their support.

Here are some tips to make your thank-you calls effective:

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