Guest post by Marshall Simmonds, Senior Vice President of Flash mobs and an Account Manager at Blackbaud. He’s passionate about working with Blackbaud’s clients to solve their complex business issues. When he’s not working with nonprofits or being a hapless Detroit sports fan, he’s busy watching reruns of Downton Abbey and Parenthood.
It’s rather funny where inspiration often comes from..
Around the time I began writing this post I had just finished reading a biograpghy of the rock band, Pink Floyd. The subject which I was asked to write about was donor retention and, seemingly, these two things should really have nothing in common. Yet, as I was reading about the making of the band’s 1975 album, Wish You Were Here, the overall theme of the work struck me as surprisingly relevant.
At its core, Wish You Were Here is really just about peoples’ inabilities to engage with one another, which is entirely relatable to the way in which donor retention is often approached. How many times has someone in the development or advancement office wished that their donors were more engaged with their mission or wished that they were more “there?” While that thought is certainly not uncommon, I think that it’s equally viable to ask ourselves the question: “how many times have our donors wished we were more engaged with them?”
Adrian Sargent, Professor of Fundraising at Indiana University, describes the industry’s approach to donor retention by stating that while academic interest in the subject has been nil, even “practitioner interest in the topic has been scant. The emphasis remains firmly on donor acquisition, with donor retention coming a very poor second.” The logic of this approach seems flawed. If donor retention is really just a metric to measure successful donor engagement, then wouldn’t Sargent’s remarks imply that we seem to care more about donors before they ever support our mission, not after?
1. Track Donor Engagement
The most important aspect of donor engagement as it relates to retention is simple enough – make sure that your organization has channels in place to track donor engagement. The ways in which donors interact with your organization are identifiers for how your organization can best nurture the relationship, starting with recording and utilizing that information to make more strategic decisions. Are they giving online, are they coming to your events, where are they making their gifts, and are they registered for your newsletter?
Your donors don’t view your organization as one amalgamous entity. They know you by your programs, specific missions, and events. Building loyalty (aka retention) is more easily achieved when individuals have a more nuanced interaction with and understanding of your organization, it’s just a matter of being able to capitalize on it.
2. Segment Your Donors
If we follow the idea of utilizing previous engagement history to make strategic donor retention decisions to its logical conclusion, then you arrive at the notion that retention efforts are most successful when coupled with thoughtful segmentation of your donors.
There are tools available to segment your donors into categories based on previous engagements with, and contributions to your organization. I don’t think it’s unreasonable to think that an organization should have unique retention strategies based on the various giving and engagement levels of their donor pool . For instance, someone that sits on an event committee and gives $5,000 every year is much different than someone who came to one event with a friend and gave $50 there. And because of this, the way in which you should nurture and follow up with these givers should be customized to their specific needs and preferences.
3. Establish Stewardship Strategies
Belleville General Hospital Foundation does a phenomenal job at putting their donors and their community at the heart of everything they do and making it really, really fun. They’re also a shop that’s incredibly focused on making sure that they run their day to day as efficiently as possible, so I was surprised to learn that their Executive Director hand signs EVERY thank you letter that’s sent out. While I know this is not realistic for many ED’s out there, I think it’s important for organizations to consider the ways they can efficiently and effectively go above and beyond for their donors while guiding them to that next level of support.
Strategic stewardship should involve the thought of staff time and efficiency. For instance, making decisions about converting your already highly-engaged donors into channels that are more likely to retain them i.e. converting strong annual donors into monthly recurring givers.
Industry statistics have shown over the last five years that organizations generally retain 45-55% of their one time annual donors versus 70-80% of monthly recurring givers. Simply deciding upon some segmentation and nurture criteria to pull out donors you feel would make your best monthly giving prospects and then running a campaign around that can pay incredible dividends on many levels.
Donor retention shouldn’t be rocket science
By simply recording donor engagement history, we’re able to uncover preference and capitalize on it. To get back to the notion that retention plays second fiddle to acquisition – doesn’t this seem incredibly backwards in so many ways? At this point I’d say it’s common knowledge that it costs exponentially more to acquire a new customer than keep one, so why then do we focus on the more costly option? Doesn’t it make more sense to overhead, time usage, and maybe even common sense to try and retain 10% more one time givers? Or to convert 5% more donors into a monthly giving tract?
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