One Thing Most Nonprofits Stink at (Donor Retention) and How You Can Change It in 2019
Donor acquisition is all the rage, but did you know nearly 3 out of 4 new donors leave and never come back. I’d stay that’s pretty stinky, wouldn’t you? Blackbaud’s latest Charitable Giving Report sheds light on the importance of donor retention in the nonprofit industry.
According to the latest research from Blackbaud’s Charitable Giving Report:
- The average donor retention rates for first-year offline-only donors is 29%
- The average donor retention rates for first-year online-only donors is 22%
That’s shocking (and pretty scary). If the donor retention trend continues, we’ll eventually end up with donor retention rates under 20%. Couple that with the rising cost of donor acquisition and you’ve got an incredibly difficult environment for fundraisers (and their nonprofits) to succeed.
But we can and SHOULD change this! Adrian Sargeant says “a 10% increase in donor retention can increase the lifetime value of your donor database by 200%.”
So let’s get started, right? There’s no time like the present to improving your donor retention rates.
This post brings together fundraising experts from across the industry to share 12 super simple (but effective) fundraising ideas for boosting donor engagement, loyalty, and retention based on answering one simple question, “what’s the key to an effective donor retention strategy?“. We hope you find their advice useful as you navigate 2019!
1. Mark Rovner, founder and CEO of Sea Change Strategies
Authentic engagement: No bullshit like tote bags or fake emergencies. Deeply understanding why the donor supports you and delivering on her (or his) expectations. Superb content. Great donor service.
2. Marc A. Pitman, CFCC, The Fundraising Coach
The key? It goes beyond the fundraising appeal to seeing a gift as a step in a relationship, not a one-off business transaction. This forces us to create systems to deepen relationships with people that are fans of what we do, rather than just treating them as ‘the public’ or ‘our constituents.’ This takes more time initially, but it produces the levels of support and advocacy we really want for our organization!”
3. Simone P. Joyaux, ACFRE, Joyaux Associates
First, believe deeply – in your heart and then in your brain – that donors matter. Second, genuinely respect and honor your donors and the difference that they make in the world. Third, behave accordingly! Strategy only works when it’s based on heartfelt beliefs and deep commitment.
4. Lisa Sargent, Lisa Sargent Communications
Five years ago an organization asked me for help in overhauling their donor communications to: improve retention, increase revenue and grow their ranks. They were committed to doing everything they could, incrementally if needed, within their budget — starting with “the basics.” So in addition to acquisition rollouts 2-3 times yearly, they: created a terrific donor welcome pack and special new donor thank you; send heartfelt, hand-signed thank-yous promptly and make them as personal as possible; publish a donor-driven, story-focused newsletter now 4 times yearly (profitable FYI); send a minimum of 4 appeals annually; invite donors to engage with their organization in ways that don’t always include a monetary gift; use a drip-feed strategy to drive home the benefits of legacy giving; and, continue to invest in a quality donor comms programs as budget permits: a longer newsletter with cover letter, legacy programs, monthly giving, major donors, website overhaul, telephone and online/email program. But at the heart of it all is an ask-thank-report-back strategy as power plant. There are no silos. They set team goals to avoid little kingdoms. And they regularly maintain and update their database. This year they are on-track to break the 70% retention barrier and have already bested their stretch fundraising goal for the year. Their donor file has quintupled since 2008. Can you do like they do? Yes: The best donor retention strategies are still the ones everyone knows about.
5. Shanon Doolittle, Doogooder
Be a nice human. Say thank you, care deeply, and value kindness. Be unpredictable and unforgettable. Make your donors smile, celebrate their generosity, and tell them how they made the world a better place. Remember, the goal isn’t retention, it’s meaningful relationships.
6. Vanessa Chase, Philanthropy for All
An effective donor retention strategy requires a plan and consistent action. Regularly keep in touch with your donors and show them loyalty – that you care – beyond just making the ask.
7. Pamela Grow, PamelaGrow.com
The keys to building an effective donor retention strategy lie in:
- Thanking donors well — and promptly
- Speaking your donors’ language — lose the jargon!
- Creating a communications calendar with a minimum of 12 touches per year
- Sharing the stories of how your donors’ gifts are making a difference
- Understanding customer service and how it translates to donor service
- Building a culture of philanthropy throughout your organization
…and, I believe, most importantly, truly understanding your donor’s motivations in giving.
8. Claire Axelrad, CFRE, Clairification
Don’t treat your donors like gumballs. Chew ‘em up. Spit ‘em out! Don’t stick ‘em in your database to save for later. You’ll forget they’re there. Enjoy them now; then practice a year-round attitude of gratitude. Think from the gumball’s perspective. It’s happy to be enjoyed; that’s why it’s there. But it wants to know it made an impact. Now! Embrace ‘thank you’ as the beginning of the donor relationship, not the end. It’s give and take. Don’t just take. Find out more about it. Invite its friends over. Don’t wait until the next time you want a gumball to tell this one how you feel.
9. John Haydon, Author of Facebook Marketing for Dummies
The key an to effective donor retention strategy is to make your donors feel like they are the most important person in the world. Take a look at what charity:water did with their YouTube videos, or Epic Change with their thank you cards. On the surface, investments like these seem high. But when when you consider how much they’ll talk about you with their friends, it’s totally worth it.
10. Nancy E. Schwartz, GettingAttention.org
R-E-S-P-E-C-T is the key to donor retention:
- Respect donors’ wants, even when they DON’T want to hear from you
- Enlist your fundraising colleagues to segment donors so each one gets the right outreach every time (or no time)
- Start up a donor advisory board of folks willing to answer a few questions each month
- Put together an all-org donor listening team—Ask for help then show the WIIFM of donor feedback via tangible examples
- Execute a system to log, share and analyze donor insights throughout your organization
- Course-correct at a moment’s notice—agility in adjusting your fundraising approach to what’s vital to your donors RIGHT NOW is a must
- Take stock of what’s still not working with your donor retention program and ask the donor advisory board how to do better!
11. Rachel Muir, CFRE, Nonprofit Consultant, Speaker & Trainer
The key to keeping your donors is building a relationship with them. That relationship starts with thanking them in a thoughtful and meaningful way for their gift and it progresses by telling them frequently how they are making a difference. As their giving grows and you learn more about them you can retain them and get them giving more by developing a cultivation plan that honors their interests and sets a revenue goal for your ask. If you don’t know where you are going any road will get you there, but with a plan everything is possible.
12. Harvey McKinnon, Harvey McKinnon and Associates
The key to donor loyalty is being loyal to your donors.
*Bonus Donor Retention Tips* by Chuck Longfield, Chief Scientist at Blackbaud
First, acquire donors that are likely to continue donating. Acquisition should be judged on the multi-year return of new donors. That is, if list A has the best initial response rate but list B has the better return over 2 or 3 years, then list B should be considered the better acquisition source.
Second, devote time to your existing donors with the expectation that this will pay off in future years. For example, Fundraiser Penelope Burk showed that a thank you call to a newly acquired donor yields 40% more revenue in year 2.
Third, discover who your worthy donors might be. The Target Analytics nonprofit cooperative database compiles giving behavior from hundreds of participating organizations and billions of donations. This database is used to assess your organization against all other organizations your donor supports. The results are then refined into one of seven actionable, behavioral groupings called “Loyalty Insights,” providing you a clear understanding of which donors have the strongest affinity to your cause. A report is generated that highlights their level of support specific to your organization compared against all the others, enabling you to easily determine how to develop your ongoing engagement strategies.
Fourth, research financial capacity and solicit the wealthier donors. Or you could measure their passion by using the rich interactions that CRM systems have been tracking for years but that most organizations are rarely using. For example, look into donors who answered a survey, had their employer match a gift, read your newsletter, liked you on Facebook, attended a recent event, or said something nice about you while chatting on that thank you call!
So, what’s your “aha moment” or key takeaway?
I’d love to hear what stood out most from the fundraising tips above and how you plan on implementing the advice at your organization.
This blog post was originally published in 2014, but has been updated to reflect the most updated charitable giving data and trends.