I’ve been thinking a lot about donor retention lately especially as we enter the busiest time of the fundraising year. Whether or not your fiscal year ends on December 31st, donors and nonprofits alike know this is prime giving season. Consider these stats from Network for Good’s Digital Giving Index:
· 30% of all giving occurs in December
· 12% of all giving happens in the last three days of the year
Faced with the frenzy of increased competition for our donors’ limited philanthropic budgets, nonprofits often feel a mark of success is getting lots of donors rather than larger amounts of revenue from a steady corps of supporters. What’s the difference, you may ask, since increased revenue is increased revenue, right? If we aren’t focused on keeping the donors whom we know believe in us year after year and who are the best positioned to increase their giving—maybe even to major gift levels—then it’s a huge waste of resources and energy to keep churning new donors. It becomes a zero sum game.
According to the Fundraising Effectiveness Project report released earlier in the summer the average donor retention rate had actually climbed from 43% in 2013 to 46% in 2015. But this still means that nonprofits are, on average, losing nearly 60% of their donors every year. If we look at donors as people and not walking ATM machines, it boils down to a failure in developing relationships with our donors especially from their very first gift. I mean developing the kind of relationships that stick with you through thick and thin. That believe in you and your mission. That share your dreams.
I’m a classically trained singer so I’m hardwired to listen attentively to lyrics of every song. This is why I have always loved mix tapes (yes, cassettes not CDs), or in 21st century terminology, “playlists.” Growing up, to spend the time making a mix tape meant that the person for whom you making it to was pretty special. These playlists could articulate feelings or thoughts far more effectively than one’s own awkward words. Think about the emotions evoked seeing Lloyd Dobler holding a boombox playing Peter Gabriel’s “In Your Eyes” outside his girlfriend’s window of after she broke up with him.
With this idea that good relationship fundraising is no different than how we create meaningful relationships in our personal lives, allow me to share my own Playlist for a Lost Donor:
1. First-time Gift
Walking on Sunshine—Katrina and the Waves
You and the first-time donor are excited to meet each other. How are you welcoming them to your organization? Do you send special communications tailored for first-time donors, like a welcome packet? Do you have any personal outreach for larger first-time donors to show them you are paying attention to their self-solicited higher annual gift? Are your communications—e-newsletters, mailed and electronic solicitations, tweets, Facebook posts, and so on—bringing your donors closer to your work and inspiring them to more deeply commit to your mission without always asking for money? 2. But then you don’t get a second gift…
2. But then you don’t get a second gift…
Hello (Adele or Lionel Richie depending on your generation)
Do you track your donors and know who has given and not yet given that year? Develop a strategy designed specifically for lapsed donors to understand why they haven’t given to you lately. Consider inviting lapsed donors to donor events or site visits to see first-hand how their past support has made a difference.
3. Still no answer…
We Don’t Talk Anymore—Charlie Puth
Survey these lapsed donors to find out their communication preference (printed v. electronic), frequency, and areas of interest. Continue your non-solicitation communications on your organization’s news and results. For larger annual donors or prospective major gift donors, plan personal phone calls by staff and/or Board members to update them personally on your work and try to reengage their interest.
4. Is it really good-bye?
The One That Got Away—Katy Perry
Did any of your LYBUNTs not make a gift this year? Focus on finding out why your larger and longstanding LYBUNTs didn’t include you in their philanthropic plans this year. Understanding what drove their decision is important for you to find out and could, in fact, lead to renewal of support down the road. It shows your donors that you care about their motivations and don’t just view them as checks.
I suggest keeping your lapsed donors in your electronic communications until they opt out. There may be a whole list of reasons why they have stopped supporting you but continued communication about your work, your impact, and your hope for their return to your corps of supporters shows them that you care about them as partners not just cash.
As you move forward with your year-end giving activities, remember to take a moment to ensure that all that you do is aimed at keeping and growing the relationships you have with your new and long-standing donors. Have a great Q4!