All of us at Bloomerang could not have been happier to see the recent article from my former employer Blackbaud declaring 2013 “the year of donor retention.” The article makes several good points, but my favorite section is the following:

“If you’re not already, start focusing on your donors as your most valuable assets. Invest in your donors and start prioritizing lifetime value over response rates. Do as Chuck suggests and determine your donor’s potential early in your relationship, and then allocate your resources accordingly.”

The Chuck being referred to above is my good friend Chuck Longfield who was lamenting the very low retention rate for first year donors, which when combined with higher and higher acquisition costs seems to point to the need to build stronger relationships with existing donors. Chuck, we could not agree more!

Adrian Sargeant, Bloomerang Chief Scientist

The other key person mentioned in the article is none other than Bloomerang Chief Scientist Adrian Sargeant. As most of you reading this blog know, Adrian provided the stimulus of virtually all of our emphasis on donor retention and donor loyalty. Adrian, your timing could not have been better!

Piggy Bank

Understanding Must Be Added to the Focus on Donor Retention

While all of us at Bloomerang are delighted to see the focus and discussion about donor retention in our beloved nonprofit sector, we now know from experience that much more understanding is needed. One might think such emphasis would bring understanding. I am sure it will over time, however understanding and better yet knowing what to do about falling donor retention cannot happen fast enough in our opinion.

After just five months of 2013 unfolding, I have had the pleasure of addressing over 1,500 fundraisers and nonprofit executives via webinars, trade show speeches, seminars, AFP meetings and our normal sales processes.

Personal Dismay – Most Fundraisers Do Not Know Their Current Retention Rate

Literally at every gathering and during every face to face/phone call meeting I ask one basic question: Do you know your current retention rate?

Out of the more than 1,500 individuals asked, less than 25 knew the answer. That ratio of such knowledge is less than 2%. I am worried that if people responsible for improving donor retention do not know what it is, the overall change they can make happen may not be as strong as we would all hope.

Knowledge Can Be Gained

Fortunately, educational session and webinars on the subject of donor retention are overwhelmingly attended by fundraisers and nonprofit executives. Our fervent hope at Bloomerang is that the knowledge of how to compute the donor retention rate, as well as what are the best practices to improve it, will soon be known by most of those executives. We know any of them logging into Bloomerang will have a jump start by what they see on the dashboard:

We are also doing our best to make the finest educational content possible come to life in our monthly webinars and conference education sessions.

I would also suggest Adrian Sargeant’s website Study Fundraising. It’s literally a one stop shop for anything and everything to do with donor retention and loyalty.

Another great resource is Ken Burnett’s SOFII. I am particularly fond of the Halls and Showcase section. Please dig in and to your knowledge from some of the best minds in the nonprofit sector.

We are delighted to be sponsoring a multi-day education session focused 100% of addressing this key issue of falling donor retention. The Donor Retention Boot Camp should be an invaluable resource for the sector. I have personally asked them to hold other camps around the country. Let’s hope the first is a roaring success so they can!

Yes, so much has been said and commented on in 2013 that we would have to agree 2013 is literally the Year of Donor Retention in the charity world. Perhaps 2014 can be the Year of Donor Retention Best Practices. Now that would be sweet!

img via dafalcon

Jay Love

Jay Love

Co-Founder & Chief Relationship Officer at Bloomerang
A 30+ veteran of the nonprofit software industry, Jay Love co-founded Bloomerang in 2012. Prior to Bloomerang, he was the CEO and Co-Founder of eTapestry for 11 years, which at the time was the leading SaaS technology company serving the charity sector. Jay and his team grew the company to more than 10,000 nonprofit clients, charting a decade of record growth. Prior to starting eTapestry, Jay served 14 years as President and CEO of Master Software Corporation. MSC provided a widely used family of database products for the non-profit sector called Fund-Master. He currently serves on the board of the Center on Philanthropy at Indiana University and is the past AFP Ethics Committee Chairman. Jay is also the author of Stay Together: How to Encourage a Lifetime of Donor Loyalty.