This article originally ran in our Nonprofit Hub Magazine, a free bi-monthly magazine dedicated to providing focused content on a particular topic.
In our January/February 2015 edition, we explored how to keep donors around all year. To reserve your free copy of our next issue, sign up today.
The biggest issue with donor retention is that most people don’t even realize it’s an issue.
At least, so says Adrian Sargeant, the Robert F. Hartsook professor of fundraising at Indiana University.
Sargeant has conducted various academic studies on fundraising. As a result, he says he has a negative outlook on the way organizations currently view donor retention because it isn’t a priority.
“If you focus on donors who give just once, it’s a sad position to be in as an organization,” Sargeant said.
However, if organizations are willing to put in the effort there will be progress. Here are three areas to focus on to keep more donors coming back to help your cause.
It Starts at the Top
In order for donor retention to be a priority, it needs to start with the board of directors.
Sargeant said boards often lack the understanding of the three most prominent drivers of retention: satisfaction, commitment and trust. They also fail to invest in the necessary resources for education and staff training.
He said boards push the best ROI, but often can get caught up chasing new donors to improve those numbers. Sargeant said the problem wasn’t just the board, but also who the board was selecting to lead the fundraising efforts.
“A lot of the boards are made up of people with business backgrounds,” Sargeant said. “They wouldn’t hire someone for a marketing job without a marketing background, but that happens a lot with fundraising and that’s frustrating.”
Be More British
As a native of the United Kingdom, Sargeant has studied fundraising from both sides of the pond. The statistics about donor retention have been fairly static for the past years, but are still sobering.
In the United States, more than 70 percent of people who make a first-time donation don’t make a second one. However, in the UK, that percentage is around 50 percent. While he hasn’t done any data-based studies, Sargeant has several hypotheses for the difference.
First, Sargeant said UK organizations were more responsible for their communication than their American counterparts. More often Americans leave a majority of their communication to outside agencies and have less control over the message. The communication needs to be personalized, segmented and mission-focused.
The second difference Sargeant pointed out was that organizations in Britain tend to solicit more frequently. Sargeant said North American organizations focus their efforts on year-end giving.
“By the time they ask again the next year, the donor doesn’t know why they are being asked,” Sargeant said.
Communicate with a Purpose
In order to really understand why an organization isn’t retaining first-time donors, nonprofits need to study their relationship with donors. By studying the patterns, organizations can understand when the attrition is occurring and fix it.
Sargeant offered several other tips to increase donor retention:
- Make sure the copy sent to donors is sending the right message. “Too often the message is, ‘Look at how great we are and look at all this great stuff we are doing,’” he said. “Organizations with great donor retention have a seismic shift and do an 180 with their message and say, ‘Look at the difference you are making.’”
- Create a welcoming communication cycle for all first-time donors. The most common place to lose donors is between the first and second donation. Find a few methods that work and start regular mailing/communication after an initial gift. “A welcome telephone call is really smart,” Sargeant said. “It seems to make a positive difference.”
- Talk to donors through multiple channels. The more ways you interact with donors increases the retention rate. For example, if they donate online, find a way to communicate with them through the mail. “Get them to participate in two-way communication any way possible, whether that is on the phone or internet,” Sargeant said. “If you do, they will have more loyalty.”
Adding one new approach or adding a task won’t make all donors stick around. But the goal isn’t keeping 100 percent of donors. Sargeant’s studies have proved that a 10 percent improvement in attrition can yield a 200 percent increase in projected long-term value.
“There is no magic bullet, but it is a combination of satisfaction, commitment and trust,” Sargeant said.