“Active donor commitment is the enduring passion for your nonprofit,” said Jay Love, Avectra senior vice president, in the Donor Retention session at the Avectra Users and Developers Conference. The full title of the session was Donor Retention: Current Rates are Plummeting! What Can Every Fundraiser Do to Reverse the Trend!
There’s good reason for that slightly alarmist description. In 2012, nearly 3,200 nonprofits participated in a survey commissioned by the Association of Fundraising Professionals and the Urban institute, the Fundraising Effectiveness Project (FEP). The survey found that the average nonprofit donor retention rate is only 41 percent, compared to a customer retention rate of 94 percent for businesses. The average new donor retention rate is only 27 percent.
Is this a donor relationship problem? Are nonprofits failing to build relationships with their donors?
What’s the cause of donor attrition?
We can deduce some of the causes of donor attrition by looking at the commercial sector and why customers leave. According to a Gallup poll, only 5 percent leave because they’re won over by a competitor and 14 percent because of poor complaint handling. A whopping 77 percent of customers leave because of a lack of interest shown by the vendor.
Other key reasons for donor attrition are:
- They can no longer afford to donate.
- They have no memory of supporting the organization. Most likely they supported a friend in a fundraising event.
- The organization asked for an inappropriate amount.
- They feel other causes are more deserving.
- They were not reminded to give again.
- They didn’t feel connected.
- The organization didn’t tell them how donations were used.
How to increase donor retention?
Dr. Adrian Sargeant, one of the world’s most renowned authorities on building donor retention, says “Even a small change in retention of 10 percent can double the lifetime value of your current donors.” The “cures” for donor retention that Jay shared are based on years of research conducted by Dr. Sargeant.
A board discussion of metrics – retention, attrition, average lifetime value, average donation – will lead to deeper insight and action. He shared an example of that insight and action leading to impact. Jay serves on the board of his regional food bank. If they received a higher than average donation (above $70), the board wrote a personal thank you note to the donor. They tracked what happened. Those who received a thank you were twice as likely to donate again.
Jay shared many donor retention tactics:
- Know your average gift. When an above-average gift comes in, call the donor. One phone call leads to a 2-3 times higher renewal rate.
- 91 Days is the lapse period. If you don’t communicate in that window, the chances they’ll donate or volunteer again are slim.
- Shop your competition. He once gave his staff $50 each to make donations – half online, half by mail; half local, half national. Staff reported back on which organizations started to build a relationship with them by thanking them within 90 days.
- Connect and communicate with them as if you were nurturing a long-distance relationship with a friend.
- Implement A/B testing to determine frequency and content. Always experiment to see what works.
- Show donors how their funds help you achieve your mission. Charity:Water demonstrates the impact of a donor’s contribution by sending them a link to a Google Earth page that shows them the location of a well being built in Africa because of their donation.
- Segment your list and personalize communication. Make the lead article in your newsletter dependent on their interests, activities, or location. You can also personalize your website in the same way. For example, a shelter’s website showed a photo of a cat or a dog depending on the donor’s interest.
Don’t make assumptions about engagement; track engagement data. The Avectra A-Score™ module can help you measure engagement, based on criteria you specify, and produce a score based on the donor’s level of engagement. Consider tracking these factors:
- Did they make a donation? Multiple donations? Recurring donation (credit card on file)?
- Donations via multiple channels?
- Event attendance?
- Social media engagement? The Avectra Social Console can help you monitor and track the social media activity of donors.
- Phone number on file?
- Survey participant?
- Stated communication preferences?
- Indicated interests?
- Opened emails, clicked on links, forwarded emails?
- Updated contact info? Those that do are ten times more likely to leave a gift in their will.
- Logged into site?
- Indicated a bequest?
Measure volunteer hours too, for example, chapter meeting attendance, grassroots political action, or sharing your cause on social media. Trout Unlimited uses their volunteer engagement data when discussing grants and legislation with foundations and elected officials. Amanda Thacker-Heidtke, Director of Online Operations, said they can show foundations how deeply their volunteers support them in specific geographic areas. They can show elected officials how many of their constituents support a Trout Unlimited cause, which is especially helpful when working to reach their organization’s goals on bi-partisan issues.
You can double your donor’s lifetime value if you strive to connect with them, engage them, satisfy them, and gain their trust and loyalty.