Did you know that the average donor retention rate is 43.6%? Almost 60% of your new donor won’t give to you again next year. This, combined with the fact that 90% of individual gifts come from 10% of donors, leads to two fundamental questions.
1. How do you increase donor loyalty?
2. How do you increase focus on the right donor?
According to the recent Fundraising Effectiveness Project Survey by the Association of Fundraising Professionals, despite an increase in net giving in 2020, non-profit organizations continue to lose more donors than they gain.
The 2020 new donor retention was 19.2%, meaning that less than one in five donors who gave for the first time in 2019 to a charity didn’t give to the same charity last year.
As an interesting side effect, organizations are taking a close look at their traditional event calendars and removing legacy events that produced a low return-on-investment.
"While these drops may not look relatively all that big, especially compared to the big percentage gains we saw in giving and donors, these figures show a giving trend that continues to be exacerbated...Even with the growth in lower-level gifts—which I’m very excited about—2020 still saw the lowest donor retention rate since the FEP started tracking this data. And we know that major gifts account for a high percentage of all giving. So even if we still saw a lot of shifting of donors and giving because of the pandemic, dropping retention rates mean charities are in for difficult funding problems in the future unless they have consistent major donors. And that’s not a tenable situation for most charities.”
Jay Love, Chief Relationship Officer and Co-Founder at Bloomerang, noted that keeping and retaining donors is, on average for most charities, much less expensive than finding new ones.
“So, 2020 gives us an opportunity. We have all these new donors, as well as recaptured donors who have come back to previously supported causes to give again. Nonprofits have the chance to see continued giving that could increase year over year. They now need to have a clear plan to follow up and build strong relationships with these donors.”
So given that donors want recognition, that they are being more selective to whom they donate, and that there are fewer overall donors, it follows that fundraising professionals need to step up their game in vying for the attention of these top-dollar contributors. And furthermore, once they have captured the donor’s attention, they need to find meaningful ways to keep that donor’s loyalty.
The following three insights will help build donor loyalty and inspire future gifts.
It is important to have an engaging and appealing mission in which to involve your donor. Take a hard and objective look at your mission, and ask yourself “Why should donors support my organization over other causes? What makes our cause unique?”. Donors need to make a personal connection with your cause in order to stay inspired and loyal to your organization. Personal connections are usually initiated by a highly emotional response to a certain stimulus, such as a personal experience, an inspirational story, a historical association, or an appeal to a person’s ethical beliefs. Ensure donors know how your organization is different from every other organization, and why it is really making a difference in the community. Promote your cause on an emotional level, yet in a concise and meaningful way.
Creating a well-thought-out strategy is imperative to success; however, without a clear execution and communication plan, it is meaningless. Furthermore, ensuring that metrics and activities undertaken are in alignment with the strategy is just as critical. Think about your current fundraising strategy and goals. Now for a moment, consider what your donors are expecting from your organization. What can be done differently to create the ultimate experience for your donors? How can you classify your donors to maximize results? Creating a culture of philanthropy throughout your organization and extending into your community is the foundation of sustained success.
Unveiling events are quickly becoming effective and sophisticated as foundations creatively bring the opening experience to attendees from around the world:
Demonstrating gratitude is important to build trust and a sense of recognition among donors. Acknowledge their support and specifically inform them of how their personal contribution has helped advance your organization’s mission. Tell a story that will resonate with your donors. Stories work! They put a face to your organization. More importantly, a story will allow the potential donor to see exactly who their money is helping, especially if your story focuses on one individual, or one family. Unlike statistics, which lack the ability to generate emotion, a compelling story will emphasize the “face” of your organization.
Go beyond a single thank you. Thanking your donor multiple times through multiple mediums as your organization advances its efforts throughout the year makes the donor feel valuable and engages them time and again after their initial support. Building on this ongoing engagement is important to fostering personal connections with your donor, and increases the likelihood that a supporter will continue supporting your organization’s efforts. Thanking your donor can range from a personal phone call, to a social media contact, to recognition on a donor display, area naming signage, or even a donor appreciation gift.
The key to donor loyalty and inspiring donors to give further to your organization is clear. Give them what they expect: recognition and gratitude for their contribution, and a reason to keep giving to your worthy cause.
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