“Repeat Donors” Matter Most….

January 10th, 2013

…unfortunately, fundraising organizations are NOT very good at retaining them.

This is the bottom-line report by Jay Love, CEO of Bloomerang, in a Katya’s Nonprofit Marketing Blog yesterday. This is logic I’ve known for years without any empirical support, but now with bona fide studies proving the point, real changes can occur.

This terrific graphic Jay developed to simplify his results  leads him to offer:

“What jumps out at you here is the comparison of the commercial sector customer retention average result of 94% versus the charity sector donor retention result of 41%.  That is a drastic difference by any means of comparison. I do not believe the donor retention percentage will ever be the same as those derived from customers paying for a service they use daily, and in most cases where they spent decent sums of money implementing.  However, as the bottom right corner block of information states, there are nonprofits who achieve a rate of 70% or higher.  Every organization should establish a goal for what their donor retention should be.  Unfortunately, many organizations are not aware of their current rate or if they know it do not share it with either their staff or board.”

All it will take to improve is to measure. Through careful study and evaluation of what is actually going on within the non-profit, a baseline can be set. Then one by one, each area of measurement can be considered within the context of the realities of the specific organization, i.e. “what can we do ourselves to change this metric?” So simple, but oh, so overlooked. Here are retention rates to track, according to Jay Love:

1. First Year Donor Retention Rate by Dollars
2. First Year Donor Retention Rate by Number of Donors
3. Repeat Donor Retention Rate by Dollars
4. Repeat Donor Retention Rate by Number of Donors
5. Overall Donor Retention Rate by Dollars
6. Overall Donor Retention Rate by Number of Donors

Coupled with the above, are the added measures of tracking “upgrades” and “downgrades”.  Together these metrics provide solid data to use for establishing individual key objectives and goals.

Just go forth and measure!

Yet, I believe that once you set your baselines, turn immediately to the types of recognition programs/efforts you enact to see very quick results. Review and improve policies with an eye toward better stewarding of givers, certainly. And we’ve all known for years that physical plaques and displays do wonders for capturing viewers’ attention. Now, I urge fundraising organizations to focus fully on the content and motivational purpose of each recognition element used from plaque on the wall, to online presence, to billboards.

(We’ve all donations improve when a donor learns of a display about to be implemented. Imagine that same donor knowing that his picture and the touting of his involvement with the organization over the years would be a part of the display. It follows that his giving will improve and his retention as a donor will be more assured. So I think that such a metric would be a valid addition to this list.)

Certain types of donor recognition do a better job than others in inciting giving. For example, donor retention, or continued giving is MOST readily influenced by a single public, hierarchical display of Lifetime Giving. And when that display is partnered in a presentation of all opportunities to give from Annual Giving, Employee Giving to Planned Gifts, then viewers (all, prospective donors) begin to understand the philanthropic impact that the community can make.

Just as powerful, too, is the use of  well-fashioned story-telling of need, partnered with stories of actual donor involvement/giving making a difference. The added benefit of this, of course, is that story-telling, by definition, will go  much further in the motivation of longevity-sustaining, new giving.

Botttom-line for me is that NOTHING (except personal relationships) will motivate and engage donors more effectively than public recognition and story-telling. Remember too that donor displays exist as the best 24/7 communicator the organization has. Use it more wisely. THINK, BEFORE YOU THANK!

Written by Robin E. Williams

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