The Secret Sauce of Fundraising Success

The purpose of a donor database is to enable and ensure the proper funding for your organization’s mission. Any and all progress made with new or tried and true donors starts with keeping a detailed donor database to better your lines of communication and increase your donor retention rates.

Last week, I had the opportunity to hear Jay Love speak about fundraising success and the importance of a donor database. Love also dug deep into the importance of donor retention, explaining that being extra successful starts with segmenting your lists so that you can craft appeals to a specific group, rather than missing opportunities for more fundraising dollars by making your lines of communication too general.

Love discussed numbers involving donor retention that are incredibly intriguing:

  • On average nonprofits have a donor retention rate of 39%
  • New donors are retained 19% of the time while repeat donors are retained 63% of the time
  • 88% of nonprofit dollars raised comes from 12% of the donating population
  • The average giving expectancy for a donor is 1 year and 9 months

 

Donor retention may be an estimated number for your nonprofit, it may be a concrete number you track monthly or it may even be something you don’t keep track of at all (but should). Keep this formula in mind to calculate donor retention:

  • Donor Retention Formula:

    • # of donors in current 12 months / # of donors in the previous 12 months = donor retention

 

Back to business. You must be wondering about this “secret sauce” of being successful with fundraising. Without further adieu, the “secret sauce” of fundraising success lies within outbound communication and interactions to create and maintain relationships with donors.

Here’s how you can use acknowledgment to bolster your appeals, increase your donor retention rate and ultimately raise more funds to achieve your mission. The best way to keep a donor is by championing them after they’ve given.

Start with the Thank You

In your thank you, be personal and be specific, showing gratitude and displaying your organization’s voice. The most important part of showing gratitude is not to thank them for giving to your organization but thank them for giving through your organization.

Make donors feel like part of your team, rather than some outside person just helping pay the bills. Donors (usually) give because they believe in the mission you’re trying to achieve, not necessarily because they want your NPO to have their money over another one. Do this within the first 48 hours of receiving a gift.

Be Different

Handwriting a note isn’t exactly different but it’s a great place to start when you don’t have the means to get more creative with thank-you cards. Don’t hesitate to tell a cool story spawned from your mission in your thank yous, include supplementary marketing pieces and don’t be afraid to get crazy and think outside the box. (Just don’t get too crazy or the post office won’t ship it).

Tell Donors What They’ll Fund

As a donor, I appreciate it when I receive a thank you that tells me the impact I had on a cause. I’m not talking about a generic “thanks for helping us achieve our mission.” Instead, I want to feel like I’m a vital part of a team.

What specifically am I helping to achieve with your mission? Am I paying salaries? Is there a remodel going on? Did I help clothe a child? Donors are more likely to give again if they believe in your mission and know what their money is directly impacting.

Call Donors or Visit Them

The more personal, the better. A phone call or visiting a donor creates a real and lasting relationship. This way they’re giving to a person, not a website or direct mail piece they receive every year around Christmas. This takes the shape of not only donor appreciation events, but also more personal things like grabbing coffee or lunch, supporting other causes your donors support and being an active part of your community in general — not just when it’s beneficial to your organization.

Try this Exercise

There is one way to get a real life example of how you should (or potentially shouldn’t be) treating your donors. Pick a few organizations you respect, choose some big ones and some mid-sized and small organizations. Give various amounts of money to these organizations and keep track of how they treat you.

How soon did they give? What is their wording like? Did they choose to call you, email or send something in the mail? Create a document or spreadsheet so you can keep track of which organizations you gave to, how much and the lines of communication over the first 48 hours, weeks or even over the following year.

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Donor retention plays an enormous role in nonprofit success. You’ve gotten someone excited enough about your organization to give at least once. If you play your cards right, they could move from the category of a one-time donor to a sustaining donor or legacy donor after delicate relationship building.
Just because the industry average for a donor is a little under a year and most of the fundraising dollars come from a small percentage of the donating population doesn’t mean it’s time to give up; but rather a time to take advantage of new opportunities and change the standard.

 

Do you have any questions? Have something you’d like to add? Join the conversation with @NickForGood and @JayBarclayLove on Twitter.

  • James Moore

    Thank you for this. Being in the beginning stages of formation, this really guides in what to do first.

    • Nick Small

      Glad we could help, James!

  • Ryan Zmolek

    Well written post.

    Grant / Donor retention is very important. I found the donor retention statistics and the “Be Different” sections to be the most helpful. I forgot about the importance that a hand written note could have. The world is getting so tech focused that I sometimes forget about how much more personal a hand written thank you can be.

    I have been reading a lot of nonprofit fundraising material lately and I really enjoyed this post in particular. Do you have any recommendations for nonprofit grants that are good to apply for or ones that you have had success with? Or another blog post on related topics. I feel that I have learned all the basics needed from http://bit.ly/2or8TUu but I am looking for bigger grants that are more likely to accept smaller to mid-range nonprofits.

    In your experience with visiting the donors in the “Visit Them” section, do you bring the handwritten thank you with you on your first meeting?

    When you call nearby donors and ask them out for coffee do you feel that this makes a significant difference over thanking them over the phone?

    Sorry for all the questions, but I feel that you really know what your talking about and I would love to know more.

    • Nick Small

      Hey Ryan,

      Thanks for chiming in. Unfortunately, I don’t have advice on specific grants as they’re so specific to the type of nonprofit, location, size etc.

      The handwritten thank you should be as “you” as possible, so I don’t want to say any way of doing it is wrong necessarily, but I would typically advise to send a handwritten not after a meeting. A thank you can come once you actually get the donation or grant.

      I think calling donors is a great way to thank them because there isn’t as much time commitment. The great part is, even if they don’t answer, they’ll still be delighted by a voicemail. Coffee is certainly not a bad idea by any means (in fact I like it a lot!), but depending on who you’re thanking, they might have less time in their day to spare. I’d say that would vary case by case. With that being said, I am a huge advocate for the more face to face time, the better.

      The best way to answer a lot of these questions is just asking yourself, what would I prefer? If you put on your empathy hat and place yourself in their shoes, it can really help to make those decisions. All in all, fundraising is about the relationship first. If you build a relationship with a donor, you’re almost guaranteed to lock in a donation.

      Hope this helps!

      • Ryan Zmolek

        Thank you Nick for the quick and thoughtful response.

        You’ve been very helpful.