I have bad news and I have good news. The bad news first: according to the Fundraising Effectiveness Project, the average donor retention rate for nonprofits in the U.S. for 2017 was below 50% (specifically 45.5%). That means that only 45.5 percent of 2016 donors made repeat gifts to participating nonprofits in 2017.
That’s low! Unfortunately, that also reflects the trend from previous years that retention is consistently below 50%.
The Fundraising Effectiveness Survey Report suggests the following: “Usually it costs less to retain and motivate an existing donor than to attract a new one, and so taking positive steps to reduce gift and donor losses is often the best strategy to increase net fundraising gains at the least cost.”
But how does one retain and motivate an existing donor? Donor retention involves the concept of donor stewardship, which is the directed effort a nonprofit takes to ensure donors are being appreciated, engaged, and assured that their gift is being used to its best effect. It builds trust and a connection between the donor and the nonprofit. An excellent donor stewardship effort can mean the difference between a one-time donation and multiple donations or even bequests and nothing at all.
That’s where the good news comes in. There are some easy to implement tweaks and strategies that help ensure donors are being appreciated, engaged, and motivated towards giving again.
Add a Personal Touch
One of the best ways to increase donor retention is by engaging more personally with donors.
I am not just talking about sending out a monthly or quarterly newsletter or a general “thanks to all donors” social media blast (although those are important and should be continued). I am talking about creating an experience as personal as possible with donors.
One of the examples I always suggest is about the donation receipts/thank you letters you send when someone gives a gift.
A great way to add a personal touch is to ACTUALLY write a short personal message on the letter or on a sticky note attached to the letter, nothing huge or fancy. Simply add a few words thanking that donor for their contribution and how much their gift is appreciated.
I usually suggest that this is done during a board/staff fun meeting where, after covering a bit of business, all letters can be split among everyone at the meeting. If a staff or board member has interacted with one of the donors before, then they should write the note. This energizes the staff and board, and also means a more personal touch for those who donate.
This activity is also great to implement when sending out an appeal to potential donors who have had previous interactions with the nonprofit. For example, if someone attended a free seminar the nonprofit hosted, you could also send a brochure for the next seminar with the appeal letter and a personal note suggesting seminars that prospective donor may like.
Show Your Appreciation
You would think this would be a no brainer, but many nonprofits struggle with this.
People give donations for all kinds of reasons. Some may want to help a cause but don’t have the time to volunteer. Others may donate to see their name on a placard.
By showing appreciation in a variety of ways, you are more likely to thank someone in the way they want to be thanked. Alternatively, if you know what drives a donor to give, you can be very intentional about how you show thanks.
- Ways of showing appreciation can include:
- Sending a small thank you gift like a bumper sticker or pens with a thank you letter
- Sending a handwritten letter or a personalized letter of thanks
- Inviting larger donors to tour the facility
- Throwing a donor appreciation day/dinner/activity
- Purchasing a placard to recognize a donor
Remember that a motivated and engaged donor is more likely to continue to support a cause they are invested in.
While there may be costs associated with throwing an event or purchasing placards or small items to give as thanks, those costs will probably be less than going out and finding new donors.
Tell an Engaging Story
When most donors say they want to see a nonprofit’s budget and statistics, what they really want is assurance that their donations are being used effectively.
Nobody wants to give to a losing cause so they look for assurances that they are contributing to the winning team, so to speak. (This is one reason the most successful crowd funding campaigns meet 1/3 of their funding goal in the first week of launching.)
Yet, numbers are impersonal. Looking at a chart of beneficiaries assisted with home cooked meals doesn’t tell you anything about who was served, how they were served, and what the donation allowed that person to achieve.
I always recommend taking a storytelling approach to demonstrating impact. Instead of a chart with impersonal numbers, you can tell the story of Billy who comes to the nonprofit after school for an evening meal because both his parents work third shift and he has nobody else to cook a meal for him. You can talk about how, since he started coming to the nonprofit, his grades have improved, he has made friends with all of the staff there, and he has started helping the chefs with preparing meals and doing the dishes afterwards. You could even include a few words from Billy on what it means that donors made his experience possible.
It is important to note, however, that you need to get permission from your beneficiaries to tell their story. NEVER exploit your beneficiaries for the purpose of gaining further donations. Furthermore, the services they receive should never be compromised if they do not wish to share their story. Ask for their permission and feedback on what you write every step of the way to ensure that they fully understand what you are writing and what the story will be used for.
In other words, do not use “poverty porn” to illicit donations.
Being able to tell a story gives so much more depth and understanding to what the nonprofit does than any chart or budget breakdown will.
Work on Building Donor Relationships Using Moves Management
Moves Management is a concept created by David Dunlop for guiding a donor from their initial interaction with a nonprofit to the solicitation of a gift and beyond. It is a process by which nonprofit professionals track interactions with donors to identify those that are most likely to give now and in the future.
The main goal in Moves Management is to build relationships and, because of those relationships, larger gifts are given.
Moves Management is about tracking and evaluating data collected on donors and potential donors to determine the likelihood of a gift. In order to use Moves Management effectively, a nonprofit should be tracking:
- Personal interactions with a donor (including dates, times and what was discussed)
- Online interactions (including email open and click rates as well as personal interactions via email and social media)
- Their giving history (duh)
- Donor interests, information, etc. (if they have kids, any hobbies, any pets)
Each donor should have a file where all of this information is tracked and added to, along with who learned that information. It helps to have donor-tracking software in place to help with this, but you can also track this information the low-tech way with good old-fashioned folders and meeting summary sheets.
Gathering all of this information allows nonprofit professionals to have meaningful interactions with donors, send them relevant information and opportunities, and determine when the moment is right to ask for a gift. It’s all about making personal relationships.
This is a huge topic, and is way more than we can cover in this short blog post. Check out these resources for more information on Moves Management:
Ultimately the more meaningful interactions someone has with a nonprofit, the more invested they become with the organization. So make your interactions with donors more meaningful.
Whatever you decide to do, make sure you are doing your best to track all interactions with donors. Having that information available helps when you are identifying who to ask for a larger gift!
If you are new to donor acquisition or you want to start building a list of prospective donors, you can take the Donor List Challenge. This free course walks you through the steps of goal setting, identifying prospects, creating donor profiles with relevant content, and using free technology to begin tracking your donor interactions.