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Please Stop Saying Lapsed Donors Are Your “Best Prospects”

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Whenever I or anyone else at Bloomerang writes or speaks on donor retention, we often recommend that fundraisers isolate donors who haven’t given in two years into a separate list, removing them from regular direct mail solicitations and other costly marketing efforts.

While we are a bit more aggressive on this point, it’s not uncommon to hear independent consultants recommend the same for donors who haven’t given in 3-5 years.

The reason for this is that data pulled from our customer database (thousands of nonprofits in the United States) has shown that if a donor hasn’t given in two years, the likelihood that they will give again is about 2.2%. This figure has been more or less corroborated by other studies.

However, one or two fundraisers in a group of readers or listeners will push back, stating that past donors are the “best prospects,” regardless of how long it has been since they’ve given.

While some fundraisers do indeed receive renewals and/or surprise donations from those who haven’t given in years, to consider lapsed donors as excellent prospects is a bit problematic.

Defining “best prospects”

Indeed, someone who has funded your mission in the past is a logical constituent to continue soliciting. Some research shows that a significant percentage of bequests are given by past donors who haven’t contacted or donated the organization in many years. However, it’s unrealistic and potentially dangerous to count on surprise gifts from long-lost supporters.

For the average development team working on their annual fund, there may be better candidates than lapsed donors to reach out to.

Here are a few constituent types you might consider:

  • current board members who have never given
  • past board members who have never given
  • current committee members who have never given
  • past committee members who have never given
  • current volunteers who have never given (10x more likely to give than non-volunteers!)
  • past volunteers who have never given
  • current employees who have never given
  • past employees who have never given
  • friends and family of the above
  • employees of current, long-time sponsors
  • employees of current, long-time vendors
  • employers of current donors (matching gifts!)

If you haven’t ever tapped into these groups, please do so before spending time and money on lapsed individual donors. They represent low-hanging fruit primarily because they have already demonstrated a commitment to your cause.

Don’t forget: there are many potential funders out there that you’ve never met who may have a deeper connection to your cause than those who have given in the past.

What to do with 2+ year lapsed donors

While some donors are just never going to give again, there are a few things you can do with those lapsed donors to possibly bring them back into the fold that have nothing to do with sending solicitations:

  • send a survey to lapsed donors (“why did you stop giving?” “what could we have done better?” the responses will help your development efforts going forward)
  • invest in an NCOA (they may have simply moved away, causing you to lose touch)
  • invest in a deceased suppression process (if they passed away, you can have peace of mind removing them from your donor database)

Your response rate will likely be in the single digit percentile, but that’s better than nothing!

Donor retention rates are abysmal

It’s likely that part of the reason why 2+ year lapsed donors are only renewing 2.2% of the time may be because overall donor retention rates in the sector hover around 40%. For first-time donors, it’s less than 20%.

The simple truth is that we just aren’t good at stewarding donors to give again. Donor love is difficult when we’re caught on the acquisition treadmill.

So if you aren’t quite ready to abandon those lapsed donors, consider making an investment in improved stewardship. Thanking quickly and personally, communicating impact and sharing success stories are great ways to cut down on attrition, and possibly bring lapsed donors back into the fold. Try segmenting your appeals based on demographics, communication channel preference, gift size and frequency for a more personal touch. And, for goodness sake, pick up the phone! A thank you call apropos of nothing will surprise and delight donors (be sure you’re only calling those who have opted in to that channel).

So let’s all stop treating that giant list of names in your donor database like a security blanket. Rather than concentrating on trying to bring long lost donors back, instead formulate a retention strategy to keep them from leaving in the first place.

What’s your cut off point for lapsed donors? Do you have one? Let me know in the comments below!

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Steven Shattuck
Steven Shattuck is the Director of Engagement at Capital Campaign Pro. A recognized thought-leader in the nonprofit sector, he has over 15 years of experience advising nonprofits on donor communications, data management, and digital content. Steven Shattuck served as the Chief Engagement Officer at Bloomerang for 10 years. A prolific writer and speaker, Steven contributed to “Fundraising Principles and Practice: Second Edition.” He also supports the Association of Fundraising Professional's Fundraising Effectiveness Project, serves as an AFP Center for Fundraising Innovation (CFI) committee member, and sits on the faculty of the Institute for Charitable Giving. He is the author of Robots Make Bad Fundraisers - How Nonprofits Can Maintain the Heart in the Digital Age, published by Bold and Bright Media (2020). You can find Steven Shattuck on LinkedIn

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Comments

  • Steven Shattuck

    That's the second time someone has brought up purchased/rented lists. OF. COURSE. LAPSED. DONORS. WOULD. BE. BETTER. But equal/better in such a one-side comparison = worthy? Why? By comparing lapsed donors to a purchased/rented group of strangers, aren't you effectively proving my point? Similarly, why does a larger list make it worthy? What does the size have to do it with it? More potential prospects, sure, but understand that the majority of the readers of this blog are small shops, and may not have the budget or the resources for a seven (7!) letter series, or purchase a list. It seems like a smaller list would have a higher potential for personalization in the appeal(s). Completely agree on the value of LYBNT, but would draw a distinction between that (1 year lapsed) and the donors I'm talking about (2+ lapsed). Glad we agree that stewardship is #1. Thanks for commenting, Ken!

  • Ken Wyman

    Yes, but.... A 2.2% reply rate is about as good as you get from other larger lists available for exchange or rent, so it is worth prospecting among lapsed donors. Yes, those other sources you list are valuable, but the number of lapsed donors is usually larger, so it is worth testing the lapsed donor list. Yes, charities do a poor job of welcoming and retaining new donors. Fixing that is a higher priority than renewing and potentially annoying lapsed donors all over again. So job #1 is to create great thank you letters, welcome kits, and segmentation. The lapsed donor renewal process should begin with a LYBNT letter (Last Year But Not This). Many donors simply do not realize it has been a year since their last gift. Ask for an annual renewal. A series of letters (usually about 7 letters) in the renewal cycle culminates in the WHYFU letter (Why Have You Forsaken Us), which reminds donors they cared enough about the people the charity helps to send money, but have not given in a long time. It asks donors to write a note about why things have changed, and invites them to stay on the list if they wish, perhaps because they cannot afford to give at the moment, so they can hear about the wonderful results of their earlier gifts. This leads to renewals and useful information. So, yes, lapsed donors remain among the best prospects IMHO.

  • Steven Shattuck

    I haven't seen stats specifically for direct mail/email response rates to lapsed donors - assume they're very low since renewal rates for them in general are in the single digits. Have seen aggregate stats in single digits for new donor acquisition via direct mail, much higher on renewal rates. But why do you ask? How do you get the names of employees? I don't think it's about "getting" the names, but reaching out to your contacts at those companies and encouraging them to be your advocate. Let them communicate to their employees on your behalf. I would never, ever recommend purchasing a list of any kind. OF COURSE response rates are going to be better from your current donor list versus a purchased list, but response rates will be even better from current/loyal donors than lapsed donors. Focus on them, and you'll quickly no longer have lapsed donors. Stewardship!

  • Gayle Gifford

    Steven, You state: "if a donor hasn’t given in two years, the likelihood that they will give again is about 2.2%" What's the response rate on acquisition direct mail? Or acquisition email? While some of your other sources are likely candidates, what's the size of those potential bases based on their conversion rates? And how does one get the names of employees of vendors and sponsors? Where does one go about purchasing such a list? It's important to focus on both retention and growing gifts from current donors, but donors do die, move away or just stop giving because they can no longer afford to give to you. They need to be replaced. If mailing acquisition to lapsed donors is more fruitful than mailing to other rented lists (which in our experience it is almost always), then isn't that still a wise strategy?

  • Ron Newlin

    By and large, I agree with the idea of only using direct mail and mass email with donors who have given within the past two years. I've had some considerable success helping organizations recapture lapsed donors, but it is, indeed, part of an intensive and personal stewardship activity. Sit down with a board member or former board member to look at the lapsed donor lists. You'll often find that lapsed donors, particularly lapsed major donors, had an affiliation with a board member or executive who is no longer with your organization. Finding out what that affiliation was and RECOGNIZING it, even leveraging it, can work wonders.
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