Donor Retention -- It's important. Now what?

What do you do next?

Last week, I talked about donor retention, why it is important, and how to measure it.

Did you take some time to figure out what your organization's retention rate is?

If not, why not take a few minutes and do a basic calculation?  It can be quick and dirty to give you an idea.  Here's one way to do it:

Number of donors who gave in 2013 AND 2014
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Number of donors who gave in 2013

What's your number?

Do you have room to improve?  Based on the recent numbers published, virtually everyone does.

So...  What do you do?

Say Thank You!

Quickly, meaningfully and often.

We all know asking for support is essential for virtually every nonprofit organization or NGO in existence.  You've done that.  Maybe you visited a donor, or made a phone call, or sent a personal letter or email or direct mail appeal.  Maybe you sent a newsletter (paper or electronic).  Maybe you had a specific campaign going on social media.  Whatever medium or channel you used, you asked for support.

Did you thank the donors who generously responded?

Yes?  Great!  You're one step ahead.  Keep saying thank you.

No?  STOP READING THIS BLOG!  GO THANK YOUR DONORS RIGHT NOW!  Pick up the phone.  Send a personal letter.  Send an email.  Whatever you have to do, do it NOW!  SAY THANK YOU AS SOON AS POSSIBLE! Tell the people who supported your organization how much their support means. Tell them how they are making a difference through their support.  Tell them how much they mean to your organization and the cause you serve.

Come back to finish this post after you've thanked your donors.

Is saying thank you that important?  In my opinion, ABSOLUTELY!  And then some.

My apologies for the online yelling.  Yes, I am that passionate about thanking your donors.

Over the last few weeks, I've spoken to a few folks at different organizations who didn't have a plan in place for what happens after receiving a gift.  Luckily most know that a timely acknowledgement is one of the most important things an organization can do for donors.

There are some great sources available online to help write really good donor acknowledgement letters.  Sofii (showcase of fundraising innovation and inspiration) is one.  Lisa Sargent is a guru and has some excellent tips on her website.

You send the acknowledgement.  Then what?

One thing I've found to be effective is simply making a phone call to say "Thank You." to your donors.  These calls are often fun to make.  Sometimes you get a suspicious, "Yes?..." or "why are you calling today?"  Often, once you explain that you are calling to say thank you for her recent gift, the donor relaxes and opens up.  I've discovered how a person first found out about an organization.  Or why they made this particular gift.  Or that their family has been involved in this organization for a very long time, and they want to continue that legacy.  Whatever it is, there's often a gem in the conversation that can help you plan your next steps.

These types of calls are a great way to get your board members and senior leadership involved as well.  Who doesn't want to get a call from your organization's leadership just to say thanks?  (Well, there might be someone, but they are few and far between in my experience!)

Depending on your program, you might be able to involve program recipients in these types of calls.

After you say thank you, what do you do?

This is where things get even more fun!  The goal in this part of the relationship is to build the relationship!  Report back to the donor on what's happened as a result of her gift.  Send a photo of a day in the life of the program.  For major donors, prepare a formal follow-up that you present in person.

Make sure your donors are receiving a good newsletter, electronic or print.  Tom Ahern is another guru with tips and tricks to make your newsletters more effective.  Take a look and see what you can do.

If you're working with a first time donor, or a group of new donors, you might want to consider a welcome kit, or welcome stream.  Pamela Grow shared some great thoughts on how to make this communication most effective.

Ask your donor to do something -- take a survey, follow your organization on social media, advise on an issue or topic, volunteer.  Just get her more involved and engaged.  It makes a difference!

Then... you MUST ask again.

This next part is key.  A donor won't give again, unless you ask again.  (There are a few exceptions to this rule -- including donors who give automatically each month.)  Let me say that again... 

A donor won't give again, unless you ask again.

If you don't ask, you won't succeed.  So don't be afraid of asking, or of asking too soon.  As long as you have acknowledged your donors and done some reporting back, I'd say you are most likely fine to ask again.  Again, there are some exceptions, but for the most part, go ahead -- ask.

There's no hard and fast rule as to the time frame of this second ask.  However, there are a couple good old fundraising adages that do apply:

1.  A donor who gave recently is more likely to give again.  

2.  The sooner a new donor gives a second gift, the more likely that donor is to keep giving.    

For example, don't take someone out of your mail just because they gave in January and you have a mailing going out in February.  Make sure you take the steps to properly steward that donor, and as long you February ask is respectful and interesting to the donor, she just might appreciate the update.  Maybe, she'll send another gift.

This process doesn't have to be complicated, and with today's technology, some of it can even be automated.  But it does make a difference.

Your turn....

What do you do after a donor gives a gift?  Share in the comments please.

Happy New Year!

And we're off!

2015 is up and running, and we're five days in.  Today is the first Monday of the new year.  How's it going so far?

With all the calendar year end fundraising that recently happened, I find myself wondering how organizations are planning to steward, cultivate and renew those donors.  In my opinion, donor retention is absolutely key to an organization's fundraising success.

The Chronicle of Philanthropy recently published an article on this topic, "Charities Show Strides in Keeping Loyal Donors, But Are Too Focused on Short-Term Results, Scholars Say."  While there is room to improve, I find it encouraging that organizations are recognizing that this is important and taking steps to continue to do better.  There are some great tools and resources linked in the article as well.

Near the end of the article, the study authors noted that you have to measure what works and what doesn't.  This is so important!  Without first determining what success looks like, and then measuring it, how do you know if you're spending your time in a valuable manner?

What do you measure?

There are any number of things you can measure from your donor database that will help determine the overall health of your donor file.  Retention rate, new donor conversion rates, long-term donor value, acquisition rates, lapsing metrics, and more all have value and can help you form and refine your fundraising strategies.

Personally, one of my go-to measures is retention rate -- what is the percentage of donors who gave last year are giving again this year?  Or, to look at it as a math function retention rate for calendar year 2014 is:

Number of donors who gave in both 2013 AND 2014

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Number of donors who gave in 2013

If you have a donor base large enough, it can be more valuable to segment your database and look at different categories of donors.  I like to look at the retention rate of donors who gave in the last 2 years and have given again.  These are committed, core donors.  (Other segments of donors you can look at are new donors, lapsed donors, recaptured donors, new donors who gave a second gift, etc.  It depends on your organization and your goal.)

Follow the same process using date going back several years, and you can determine the overall trend for your organization.

Ideally, you'll want to see a trend going up.  If you don't see that, you have room to improve.

What is a "good" retention rate?  

In his book Retention Fundraising, Roger Craver states that the current average multi-year retention rate in the United States is 41%.  (128)  In essence, as he states, out of 100 donors, 41 will give again, and 59 will walk away from your organization.

The Chronicle article says 43%.  And that was an improvement over past years!

Ouch.

I think it's safe to say that 41% or 43% retention is NOT good.  That's beyond failing, and that's the average!  Therefore, some organizations are doing very well, and others are doing even worse than that 41% or 43%.

I'd love to see overall retention rates above 70%.  I'd love to see retention rates of core donors (my definition is donors who have given every year for the past 3 or more years.) above 80%.

Is that going to be easy?  Absolutely not.  Will every organization be able to reach those numbers?  Maybe not.

Will it matter?  Is it worth the effort?  Absolutely YES!

Why does strong retention matter?

In my opinion every fundraiser, and probably every person working at a nonprofit organization should know and understand that it is easier to renew a donor than find a new one.  It also costs less to keep a donor than find a new one.  This is a well known standard in the commercial world.  It's why companies spend considerable amounts of resources to keep customers coming back.  When an organization has a strong retention rate, that organization is demonstrating one aspect of good management.

In addition, a high retention rate can also indicate that donors are passionate about the mission.  They keep coming back because the organization is doing good work and making a difference.

Beyond that, however, a strong retention rate means that we are treating our donors right.  We recognize that they are people with passions and interests.  Donors are not just a pool of cash we dip into as needed.

A strong retention rate means that we are focusing on our donors and working to partner with them properly to build long-term relationships.  It means we respect them and their wishes.  It means that they respect us and our organizations.  It means that donors believe in what we do enough to continue their support.

A strong retention rate is one way to indicate we are properly stewarding and cultivating our donors.

That is a significant thing to think about as the new year starts.

What can you do to help your organization build strong relationships?  What are you already doing?  I'll talk more about my ideas in upcoming posts.  Please share yours in the comments.

Happy Monday!

Best Wishes,
Danielle