retention

Step one in welcoming: the thank you

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I’ve already done a week on thanking your donors.  Somehow, I managed to talk about why to thank people, rules for thanking donors, 50 ways to thank donors, and ways to thank people multichannel-ly.

And I didn’t talk about what should be in a thank you.

It’s a wonder you even read this blog — thank you for that.

One source to which I’m indebted for this week and many others is Roger Craver’s Retention Fundraising. It is a classic about how to retain donors that I can’t recommend highly enough.  He posits that there are seven drivers of retention:

  • Are you effective at your mission?
  • Does the donor know what to expect from interactions with you?
  • Are your thank yous timely?
  • Do you listen?
  • Does the donor feel s/he is a part of something important?
  • Does the donor feel appreciated?
  • Does the donor receive information about who is being helped?

These are the things you are trying to accomplish with your thank you, and with your welcome series.  Most of these apply to any acknowledgment, but they are most important for a first gift.

Remember emotion.  So many acknowledgments aren’t thank you notes.  They sound like they were written by someone trying to tell Sgt. Friday about your donation.

jack_webb_joe_friday_dragnet_1957

At 1430 hours, the suspect made a donation.
It was tax deductible pursuant to 26 US Code 170.

They are long on amount and date and making sure your name right and short on capturing anything related to the donor’s experience in making the gift.  As we’ve discussed, the vast majority of gifts are made not because of what someone thought, but what they felt.  The thank you know should respond to this in kind.

Specify to why.  Along the same lines, the thank you should not just replicate the emotion of the original, but also tie into the story and the reason for giving.  If someone gave with a petition attached, the thank you should reference the petition and how it is helping make a difference.  If they gave you their email address on the reply device, they should be thanked in both medium.  Ideally, the signatory of the thank you should be the same signer of the appeal letter.

Especially with a first gift, it’s important to establish trust.  Relating the thank you to the gift is a good way of establishing that trust.

Remember their past giving.  If they’ve been giving for 10 years, let them know you know that.  While not strictly related to welcome packages, it’s important not to forget this.

Prove the impact.  This also helps build trust.  If you said the donor’s gift would help build a well, the story and pictures, and emotional impact from the thank you should be related to the impact from the well.  Especially if you are not a name-brand charity, the donor is taking a chance on you doing what you say you are going to do with the donation.  Letting them know that you did helps build a relationship and ties them to the impact (not the output) they were hoping to have.

Remember, the donor wants to know who they helped and why that’s important.  Help them.

Differentiate.  A first donation is more predictive than any other donation.  If someone donates an abnormally high amount to your first solicitation of them, they are uniquely dedicated to your cause and/or of substantially greater means than the average donor.  Chances are good that you have a special procedure for anyone who gives over a certain amount (let’s say $1000) to your organization, whether it’s a phone call or handwritten note.  I would advocate you extend this to people whose first gift is abnormally high.  It may seem odd to extend the same treatment to someone who gives $1000 and someone who gives $100, but chances are good that that $100 donor is your $1000 donor of the future.

Do not delay for differentiation.  That said, you hear horror stories of processes for larger donors that delay their thank yous.  You may think I’m exaggerating here, but at the summer camp for future non-profit direct marketers, the counselors would shine a flashlight on their face from under their chin and say things like “And then the letters sat on the executive director’s desk.  And they sat.  And they sat.  And they sat.  For over. Three.  Weeks.”  We campers would not be able to go to sleep, knowing that our best donors were getting the worst treatment.

Perhaps I went to the wrong type of summer camp.

Anyway, there are four solutions to this dilemma:

  1. Light a fire under whoever is supposed to be writing or calling
  2. Pick someone else to do the writing or calling (or have a team of people to share the load)
  3. Use a quasi-high-touch solution like outbound voice mail or pseudo-handwritten cards
  4. Send a regular thank-you note immediately, then follow-up with a phone call or handwritten note

All of these have their merits, but I strongly recommend solution four.  Not only will this thank the donor twice, which is rarely a bad thing, but it will make your process independent of personalities.  I am a big fan of processes that work regardless of the people who are in them.  You may say your ED or board member is extremely punctual with their calls and letters, but this may not always be the case.

Test high-touch pieces below where you currently are doing them.  If you aren’t differentiating at all, well, now’s a great time to start.  If you are, I recommend a test of doing handwritten notes, phone calls, or other high-touch solutions to at least a segment of whatever half of your current threshold value is (so, if you do $1000+, try it with $500+ donors).  Track their giving over the next year and see if it pans out.

My guess is that, if your organization is like almost every other organization I’ve seen, three things are true:

  • Your current threshold was set by someone in the mists of time because it was a good round number that didn’t sound like an overwhelming amount of work for the person/people involved.
  • It has gone through little to no scientific inquiry in the interim.
  • There are touchpoints you can do that will raise the value of the next tier of donors that will justify the amount of work necessary.

There is a who-is-going-to-tie-the-bell-around-the-cat’s-neck problem with this solution.  I would recommend you, the reader of this blog.  Talking to contributors and thanking them for making important work possible is beneath no one.  You will likely not only get a lift in your response rates, but you will also gain vital donor intelligence that few others in your organization will get by having actual conversations with actual donors.

Turn off regular communications with new donors for a certain amount of time.  In the mail, this is easy.  Chances are you have already pulled the list of people you are going to be mailing 30-60 days from now.  Thus, a suppression emerges naturally (although you may wish to lengthen it).  For online initiates, there is a temptation to drop them into regular communications immediately.  

Don’t.

Remember yesterday’s post — you are looking to thank this person, learn about them, have them learn about (and perhaps interact in a non-donor context with) you, and make a strategic ask for a second gift.

If they are dropped into regular communications, there is a near-100% certainty that they will get asked with no learning, which is not strategic.

The amount of time is not really the important part; accomplishing your communications goals is, so you can test what the right amount of time is for you.  And, as Roger told you at the top, be sure to let them know what they can expect from you (and I would add “and allow them to change that default”).

What do you put in the interim?  Well, that’s what I’ll talk about for the rest of the week.

If you would like to get these weeks in digest form, please sign up for my weekly newsletter, where you’ll get not only context for these posts, but also my random neural firings and previews of upcoming posts.  You won’t want to miss it.

Unless you do and that’s fine too — I just appreciate that you are reading.

Step one in welcoming: the thank you

How to structure your matching gift campaign

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Matching gift campaigns work. But are they necessary?

Whether it’s a grantor’s challenge fund, a campaign match, a fund set up by a generous donor or donors, matching gifts are a frequently used and frequently successful tactic.  Most of the time, it’s set up as a “double your impact” campaign.

Three researchers — Huck, Rasul, and Shepard — looked at whether a lead donor increased the success of a campaign and how the structure of the match impacted that success.

They did this for the Bavarian State Opera House.  (BTW, if you are a researcher and want to run a test with donors on your dime, email me at nick@directtodonor.com; I’m usually game.)

300px-mc3bcnchen_nationaltheater_interior

The Bavarian State Opera House.
Fundraising motto: hey, these inlays don’t gild themselves.

Here were the six test treatments:

  1. Control: No lead donor, no match commitment
  2. Lead donor: A generous donor has already funded part of the program for 60,000 Euros (remember, Bavarian State Opera House).  We need your help with the other part.
  3. 50% match: A generous donor will match your Euro with .5 Euro.
  4. 100% match: Euro for Euro match
  5. Non-linear matching: A generous donor will match any gift made over and above 50 Euros.  (Which is to say if you donate 120 Euros, the donor gives 70.  If you donate 70, the donor gives 20.  If you donate 40, the donor gives nothing)
  6. Fixed gift matching: A generous donor will match any positive gift made with 20 Euros of his* own.

Got your guesses of what will do what?  Good — here we go with the results**:

Response rate Average gift Revenue per piece
Control 3.7% 74.3 2.79
Lead donor 3.5% 132 4.62
50% match 4.2% 101 4.19
100% match 4.2% 92.3 3.84
Non-linear match 4.3% 97.9 4.18
Fixed gift match 4.7% 69.2 3.27

Yeah, not what I thought either.  I figured, from all of the virtual ink I spilled in social proof and authority last week, that the presence of a lead donor would help. Presumably, there was another mechanism in place — that of anchoring.  I’ll dedicate a full post or five to anchoring effects at some point, but now, suffice it to say that by throwing out the number of 60,000 Euros you can trigger the idea that a person’s gift should be closer to that number.  For some, that may turn them off (although the decline in response rate wasn’t statistically significant).

What surprised me was that the matches didn’t help revenue per piece (unless of course the match is generating marginal revenue).  The matches increase response rates, but the average gift was significantly lower in all of the matches.  The authors’ hypothesis is that the match has a bit of a crowding out effect — that is, the donor feels like their 50 Euros is actually 100 Euros, so they need not make the donation of 100 Euros to have the impact they wanted to have.  This is certainly plausible and consistent with previous research.

What to make of this? Like, I’m guessing, many of you, I’d only tested matching gift language versus control language. However, there is some evidence here that simply stating that a lead gift has been made can increase the anchoring effect and support the idea that a program is worth funding without potential negative byproducts of crowding out donations.

That’s for the general case.  You might also take a look at a fixed gift match depending on your goal.  Generally, I prefer quality of donors to quantity.  However, if you were running a campaign like lapsed reactivation, you might legitimately want to maximize your response rate at the expense of short-term net revenue.

Based on this, I’m going to be looking at testing this against our typical matching gift campaign.  If you do likewise, please let me know at nick@directtodonor.com or in the comments below.  It would be great to see additional evidence on this.

*  The gendering is from the original — not my own.

** The rounding is in the original paper and throws off the revenue per piece variable a bit, but I chose to stick with what they had in the original paper.

How to structure your matching gift campaign

Reactivating lapsed donors

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Getting lapsed donors to reactivate is second only to getting the second gift in terms of its importance on keeping your program from bleeding donors.

I often give Blackbaud a hard time, but the point in their report that you much treat lapsed donors differently is vitally important. The cost to (re)acquire is usually lower than the cost to acquire a new donors, and they almost always have better retention rates (remember how I said to track lapsed reactivation retention separately? This is why) and higher average gifts than a newly acquired donors. In fact, because of this, you should be willing to spend more to reacquire donors than to acquire them anew.

But at the same time, you can throw money away in lapsed reactivation just as easily as you can in acquisition. It’s little use to try to get someone back who, well,

He's just not that into you
Or she.

In an ideal world, you would be using modeling to find out which of your donors are most likely to reactivate. But in that ideal world, there would be no need for nonprofits, so it’s pretty clear we don’t live there. Yet.

So what can you do quickly, easily, and most importantly cheaply? Here are a few ideas:

Catch donors before they lapse. Look in your file for two things – people who don’t give as much as they used to and people who don’t give as often as they used to. You can view these folks as “relative lapsed.” They are telling you that they don’t value you as much as they used to relative to other charities or other things going on in their lives.

Identify lapsed donors who are giving to other organizations. An ideal way to do this is by joining list cooperatives, as recommended in the acquisition post. This will lead to the modeling discussed earlier. Another way of doing this is in your merge/purge process. As you rent outside lists, you run those against your file to make sure you aren’t paying for people who already have as donors. If you mark these donors who match outside lists, you will have a good indication of who are donating to other organizations (and, hence, are still alive and philanthropic generally). These lapsed donors will generally perform better than the average lapsed donors.

Identify people who just aren’t responding. Unfortunately, you can’t tell who is or isn’t opening an envelope and people may not answer a phone call for a few reasons not having to do with lapsing. However, you can tell who is and isn’t opening your emails. If you can run a report for people who haven’t opened an email in the past, say, six months, first of all, don’t email those people as much. This is a topic for a separate post, but just because you can email everyone at no marginal cost doesn’t mean you should email everyone. Suppressing these supporters for most emails will help your delivery and open rates and also help you specialize your tactics. The more salient lesson for lapsed donors is if someone isn’t opening your emails, yet their email address is still good, chances are they aren’t in love with your organization anymore and less likely to renew.

You also may want to see how many times you have mailed someone and see after how many times people in your file generally have their response rate fall off. If very few in your organization give after being solicited 24 times without a response, you may want to make this a part of your lapsed suppression criteria.

Go to the familiar. If a piece worked for someone before, send it or something like it to them again to try to reacquire them (whether an acquisition or a donor piece). This is why I recommend mailing deeper into lapsed categories for people who have given to that piece in the past. Similarly, finding messaging similar to what someone has responded to in the past makes someone more likely to respond.

Vary your messaging. This seems like it might contradict the previous one (and it does). But after so many times, messaging can also lose its effectiveness, so you might try a new tactic someone hasn’t seen before to attract them back.

Know who is worth getting back. Remember that lifetime value calculation? You will want to make sure that you aren’t investing to get people who will not pay back their investment in the long term. If someone donates $5 per year and it costs $5 to get that donation, then no amount of investment should be expended to get that person back.

So those are some retention basics in terms of technique. But the biggest thing is to treat your donors like humans – addressing your appeals to their desires and treating them politely and like an individual.

Thanks for reading and let me know if there are other topics you’d like covered.

Reactivating lapsed donors

Onboarding for donors and supporters

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According to the Online Fundraising Scorecard, 37% of non-profits did not send an email within 30 days of a person signing up for emails. Only 44% asked for a donation by email within 90 days.

Let me put this in an approximate pie chart:

online supporter pie chart

We’ve seen this week that getting the second gift (or lack thereof) is where there is the greatest retention leak – people who donate once and don’t get enough out of the experience to donate again. Online donors, in particular, are the most fickle and least likely to retain.

This could be because of the medium. But it also could be that over half of all non-profits do engage people right when they express the most interest in the organization – immediately and unequivocally. To demonstrate this, try to remember what email newsletter you signed up for a month ago today.

Chances are, you can’t. Thirty days is a long time to remember you signed up for something, especially if no one reminds you that you did. Replace “the guy” with “the donor” in this quote and you have a pretty good idea of how people think about your organization, at least initially:

Never assume that the guy understands that you and he have a relationship. The guy will not realize this on his own. You have to plant the idea in his brain by constantly making subtle references to it in your everyday conversation, such as:

— “Roger, would you mind passing me a Sweet ‘n’ Low, in as much as we have a relationship?”
— “Wake up, Roger! There’s a prowler in the den and we have a relationship! You and I do, I mean.”
— “Good News, Roger! The gynecologist says we’re going to have our fourth child, which will serve as yet another indication that we have a relationship!”
— “Roger, inasmuch as this plane is crashing and we probably have only about a minute to live, I want you to know that we’ve had a wonderful 53 years of marriage together, which clearly constitutes a relationship.”

Dave Barry, Dave Barry Complete Guide to Guys

You want to strike while the iron is hot – this person cares about your cause now. So you want to set up a welcome series for your donors online. There are some great guides on how to do this and I promise to write one in a future blog post. For now, here are some key tips:

  • Start with a thank you. This person is interested in your organization. They have given you their time and attention. They sound like a pretty cool person who is giving you a fairly valuable thing. This should be rewarded with good manners.
  • After that, if you have a key offer, lead with it. For some, you may be emailing them a temporary membership card. For others, it’s an opportunity to get involved with advocacy. Surveys are also good. Whatever people like to do with your organization online, use it to build their engagement and learn about them.
  • Yes, within the first 30 days. If they donated already, ask them to become a monthly sustainer. In fact, you may want to test whether a sustaining ask works better generally.
  • Test getting them into your mail, telemarketing, and other direct marketing channels. Just because someone started with your organization online doesn’t mean they don’t also have a mailbox and a phone.

This gap of time can be even acuter in the mail. At least with an online donation, you get (or really really should get) an immediate email receipt. With an initial offline gift, there’s the time that it takes the mail to get to the cager (or another person who will open it), the time to deposit the check, print the thank you, batch it, and send it, and the time it takes to get word back to that donor. That alone is pretty bad.

But what happens next is worse: nothing. Let’s say someone makes a donation on January 1st. They may not get into the data pull for a mail piece until March or April, depending on the lead times you have in printing. Picture making your donation, getting a thank you three weeks later, and then radio silence for months afterward. Doesn’t sound like a recipe for retaining that donor or striking while the iron is hot, no?

So instead, create a couple of mail packages that fill that gap that are sent automatically post the initial gift. The same principles apply here as online – things that help you and that your donors like are the perfect here: petitions, member cards, new supporter surveys, etc. You can expect these pieces not only to help your retention rate but also to provide some additional net revenue as well.

Onboarding for donors and supporters

Why do people stop giving?

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This has, unlike so much in the fundraising realm, been objectively researched and I commend the paper to you.

This paper tested six attributes of connection between people and causes they support.  Guess which ones actually mattered to donor loyalty (I am paraphrasing their points somewhat):

  • The nonprofit shares my beliefs
  • I have a personal link to the cause
  • The nonprofit’s performance is strong
  • I trust the organization
  • I have a deeper knowledge of the organization
  • The quality of the donor services they provide me is high

A hint: four of these matter; two don’t. I’ll pause here why you contemplate.

(pause)

I’m Henry the 8th I am.  Henry the 8th I am I am.  I got married to the widow next door.  She’s been married seven times before and all of them were named Henry – HENRY.  Henry the 8th I am.

Second verse!  Same as the first!  Little bit faster and a little bit worse!

henry the eighth2
Does anyone else find it weird that in this “romantic” movie, he got his first date with his wife by aurally torturing her. Stalker much? (Also, this is Ghost for you young’uns.)

Oh, you’re back.

The four that were important were:

  • The nonprofit shares my beliefs – One of the key drivers of giving and support is the desire to be a part of something bigger than yourself. Knowing the organization is like you and has a similar core system to you is vital.  This is something you can use in your writings – “You know how vital art instruction in elementary school is to raising creative, happy, and well-rounded children and that’s why we…”
  • I have a personal link to the cause – Not surprising. Those impacted by a disease, an injustice, a crime, a whatever, are going to likely be among the strongest to support a cause about these things.  The next step, however, is not done often enough – you often can see a significant retention lift if you can reference this: “You know better than most the heavy toll of…”  Beyond this, if appropriate for your cause, work with those who have a personal link to the cause to celebrate this.  Techniques like anniversary cards (congratulations on three years cancer-free today!) can work well, but more than that, peer-to-peer fundraising can allow a person to celebrate those anniversaries on their own behalf.  You cannot craft a message better than: “I believe in X because of Y. Because you are a person like me, please support X also.”
  • I trust the organization. Trust is, I would argue, a necessary but not sufficient condition of support. No one who does not trust you will support you.  You can borrow trust with social proof techniques like the BBB seal on your donation form, but generally, running a tight ship nonprofit is sufficient.
  • The quality of the donor services they provide me is high. Another necessary but not sufficient condition.  In my experience, a good donor relations person can help turn around a less positive donor experience more easily than trust can be repaired, but it’s important to treat the people who help you serve people well. This starts with customization and if you missed the initial post on this, here it is.  Letting the donor know you know them is critical to quality donor services.

The converse of these is what causes people to lapse: if they no longer trust you, they think you share their values, their link to the cause is diminished or severed, or have a bad donor experience, they are more likely to not give in the future.

What of the two that don’t matter?  Performance of the nonprofit is what the Charity Navigators of the world attempt to quantify, first by pretending that percent of overhead means anything to impact, second by feigning that checkboxes around transparency mean someone is active in their community, and now with Charity Navigator 3.0, which has non-subject-matter experts reviewing the statements of subject matter experts to gauge impact and achieving the same level of impact as me commenting on neurosurgical techniques. It turns that those who can’t don’t teach; they rate.

It’s this type of performance that doesn’t seem to matter as much to loyalty.  People give to something because it feels good to give – to plant the tree whose shade you may never enjoy.  Getting into performance and numbers and such can sap the joy from the process.  Or at least that’s my theory on what that didn’t rate.

As for depth of education, it’s great to educate the people who actively want to learn more about your cause.  Donor telephone town halls, reports back, impact statements and the like are all good ways to do this.  But so much of education from nonprofits comes from the false belief that “if only people really understood the problem, then more of them would give.”  In fact, it’s probably that curse of knowledge I mentioned a couple of weeks ago that makes you speak in buzzwords and feel like you can educate the passion into someone.  A story, told well, means far more.

So now you know a little about why people lapse.  And it should be no surprise that retention is worst after the first gift.  There isn’t a built up trust.  There may or may not be a connection to the nonprofit (and if there is, the nonprofit may not know about it yet).  Communications haven’t been established and you haven’t told the donor the great things they did with that first gift yet.

Increasing that percentage of second gifts is the biggest area for almost any retention effort.  So I’ll cover that tomorrow.

Why do people stop giving?

How to measure retention

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Often, you will see people ask “what’s your retention rate” and get answers like 50% or 60% or whatever.  But there are different types of retention that add up to that overall retention rate.

Yesterday, I said that your direct marketing program was like a bucket with a hole in it.  We’re going to change this a bit today to say that your program is like a pipeline with a bunch of holes in it.  This is the lifecycle of your donor.  To define some terms:

  • Prospective donors are people who haven’t given yet, but might.
  • New donors are donors who are giving their first gift to your organization. I said we’d be defining terms.  I didn’t say they’d be hideously complex.
  • Converted donors/second gift donors/first-year donors are all terms for people who have gotten over the hump and given to your organization within the next year
  • Multi-year donors are people who have given reliably over multiple years
  • Lapsed donors are donors who haven’t given in a while. In a lifecycle analysis, this is frequently put at a time horizon (e.g., given the past year or past two years), but in reality it’s often militated by a broader analysis.  For example, if someone donates $5, you will stop trying to retain them much sooner than someone who donates $100).
  • Deep lapsed donors are lapsed donors, only really lapsed. Again, when this is is defined by your organization.
  • Lapsed reactivated/reinstated are people who were lapsed and have since given a gift. This is an important category often overlooked, in that these reactivated donors can’t be treated like people who just gave their second gift, but neither are the part of that key multi-year donor group.

Blackbaud indicates that the average retention rate is about 50% — that is, of your file, half will give you a gift in the next 12 months.

But as you can see, that’s oversimplified.  First-time donors are less likely to retain with a retention rate about 27%; multi-year retention is 58%, according to Blackbaud’s white paper on the topic.

But they only look at these two categories for retention.  It’s best to look at your retention rate in four buckets:

  • New
  • First-year
  • Lapsed reinstated
  • Multiyear

This is why retention rate as an overall metric camouflages what is happening in your file.  You may have a higher overall retention rate than you did a couple of years ago, but lower retention rates in all of these categories, similarly because you have more multiyear and fewer new donors than you did in years past.

If you prefer, lapsed could be included in here; I don’t because I think of lapsed retention as reactivation – there has to be an effort to reacquire donors, rather than talking to those whose attention you have already.

The other reason it’s important to look at each of these groups separately is that they require different strategies for retention.  With new donors, you have been a first date.  You have learned a tiny bit about them and they about you.  Also, to stretch the dating analogy, your relationship at first is new and exciting.  You can explore things early on like sustainer asks and that person might be in the afterglow of giving and your outstanding onboarding process (more on this later this week) and willing to entertain that notion.  Testing different messages and learning instruments like surveys are par for the course.

Conversely, for your multiyear donors, you should know what they like and don’t like.  Do they give only in the fall and when their gift is matched?  Do they love advocacy appeals?  Is your calendar hanging in their house and are all of their mailing labels yours (i.e., premium donors)?  Not only can you know these, you are expected to know and play back to them – see Ellinger’s Peak of Ideal Customization for details.

One additional retention metric to be aware of is an output from retention rate: lifetime value.  Here’s the formula for lifetime value:

clv-equation
Because everyone loves calculus

Wait!  Please don’t leave!

This is the overly complicated version.  You can ignore discount rate because the cost of money is so low. What you really want are “what is the net value of a person’s donations to an organization going to be?”  The key inputs to this are:

  • What are they giving?
  • What does it cost to get them to give that, initially and ongoing?
  • What is the likelihood that they will give gift 2 from now (and three and four and five) – that is, what is their retention rate? That’s the calculus portion of this – you sum each donation that someone will give, discounting it by the likelihood that they will give it

Retention rates, like compound interest, are magical, rippling through your program for good or ill for years to come.  Tomorrow, we’ll look at the inverse of the retention rate – why people stop giving.

How to measure retention

The basics of retention

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I had the pleasure of speaking on an excellent panel last week with NonProfit Pro on the topic of donor retention, so instead of our regularly scheduled week, let’s look at retaining our donors.

As direct marketers, we often have every bit of data about an appeal or campaign at our fingertips.  We can track average gift and response rate, test versus control packages, open rates, click-throughs, conversions, and so on.

The thing that is often forgotten is that each number represents people.  Everyone who gets a piece of mail, email, phone call, or text (or fax blast, carrier pigeon, telegram, etc.) votes on it by their action or lack thereof.

Lost in the numbers of an appeal or campaign performance are the metrics that matter in the long-term: are our strategies helping you love those who support you more and/or helping your supporters love you more?

Yes, it sounds a bit hippie-ish, as if I’m going to get the drum circle out any moment.  And part of it is – these are the people who make our work possible.

But even if we must look at this from under our green eye shades through our decidedly non-rose-colored glasses, it makes both sense and cents to make donor retention a top priority.

Our direct marketing programs are like a bucket with a hole in the bottom of it.  If you want the water level to rise, you can only do one of two things – poor more water into the bucket, or decrease the size of the hole.  Given this analogy, you might wonder why you would bother to pour water into a bucket with a big hole in it.

Hand pouring water from a glass into a leaking pail
The image of a leaky pail of water that is legally required
to accompany all retention commentary.

And you would be right – retaining the donors we have is of greater importance than acquiring new ones.  While you certainly can’t stop acquiring to focus on retention (less you get down to one very very very loyal donor), keeping with donors with your organization is vital for several reasons:

  • It’s cheaper. There are very figures for this.  Some say it’s twice as expensive to acquire a donor as to retain one.  Others say it’s 12 times as expensive.  Someone out there right now is working on a study that definitely concludes that it is a hillion jillion times more expensive.  Bottom line, it’s cheaper to retain a donor than to acquire one, by a factor of X, where X is big enough to be important.
  • It’s easier. Picture addressing your acquisition package, email, or phone call to someone that you know already knows what your organization is, what you do, and kinda likes it.  Cuts a few sentences, maybe paragraphs, out of it, no?
  • Retained donors are of greater value than new donors. We’ll talk retention rates tomorrow, in that people who have only given one gift are far less likely to stay with your organization.  They also tend to give more gifts and more per gift.
  • Retained donors are of greater value, part 2. Major donors rarely come from the ranks of people who made one gift to your organization; that’s something that comes from a longer-term association with you.  Additionally, more than half of bequest givers have given to an organization 15 times or more.

So this week, we’ll talk about donor retention: how to measure it, why people stop giving, how to get that elusive second gift, and how to reactivate a lapsed donor.  Like many of these topics, each one of these could be its own book (and some are), so if there are areas of particular interest to you, let me know by email or in the comments and I will work to dedicate a week to the topic.

The basics of retention