Nonprofit Retention: All Donors Aren’t Created Equal

 

In article #1 of this three-part series on donor retention and gratitude we discussed the benefits of thanking donors in a manner that resonates with them. Personally. That’s what will make your thank you stand out, a topic covered in article #2. In today’s article #3 we’re going to look more closely at something that should be patently obvious. People are all different. [We’ll consider specific strategies for new donor renewal here. In the next article #4 we’ll look at strategies for lapsed donor renewal.]

Here’s the big, often overlooked, ‘deal’: What floats your boat may not float mine.

Guess what that means for your donor retention and cultivation strategy?  

• Sending the same thank you to everyone won’t work that well.
• Sending the same follow-up communications to everyone won’t work that well either.

You need a slightly different donor retention road map for different categories of donors.

But how do you create those categories in a manner that makes sense? There’s no one right answer. Because you and your donors are unique.

What works for another nonprofit may not quite work for you. Their donors may prefer to communicate via phone and mail, while yours may prefer text and social media. Their donors may be largely young families, while yours may be retirees. Their donors may lean right politically, while yours may lean left. Their donors may be largely continuing supporters, while yours may all be relatively new donors who gave in response to an emergency appeal.

Effective Nonprofit Retention Begins with Donor Differentiation

Different Strokes for Different Folks

Once a donor makes a gift, don’t make the mistake of neglecting the “getting to know you” phase of building your relationship. Do everything in your power to get to know your donors better. Emailed or mailed surveys (try a free survey tool like Google Docs or Survey Monkey). Survey widgets on social media (see here, here and here). Focus groups. Random phone calls. In-person get-togethers.

Even when you don’t know a lot about folks, you definitely know something. Because of how they’re connected to you. And what they show you by their interactions with you. Pay attention; then tailor your donor thank you’s accordingly.

Start with what you know about how your supporters differ. While this article can’t lay out a comprehensive strategy for every category of constituent, let’s:

1. Review some different categories so you can at least think about tailored strategies for treating these donor segments differently.
2. Talk specifically about strategies to retain two under-renewed donor groups: (1) first-timers (which we’ll cover in this article) and (2) recently lapsed donors (which we’ll cover in article #4).

Types of supporters ripe to be asked for further engagement – but each one a little bit differently:

1. Volunteer (e.g., participates on a committee or provides a direct service)
2. In-kind property (e.g., donates clothing, furniture, or other goods, but not cash)
3. One-time transactional ‘third party’ donor (e.g., bid at an auction; came to an event on the company dime; made a memorial or tribute gift; gave a ‘pledge’ to friend’s campaign, etc.)
4. Newly acquired (‘real’ gift actively acquired via a targeted direct mail or online campaign appeal)
5. First-time renewable (this will be their second ‘real ‘gift)
6. Ongoing renewable (this will be their habitual gift)
7. Ongoing upgradable (this will be their thoughtful gift)
8. Major gift (this will be a passionate gift, almost always solicited from someone who has been an ongoing donor)
9. Lapsed last year (gave last year but not this) [Known in the trade as LYBNT]
10. Lapsed more than a year ago (gave some year but not this) [Known in the trade as SYBNT]

Levels of donations to be renewed or upgraded:

1. New donor at or below average gift.
2. Repeat donor at or below average gift.
3. New donor above average gift.
4. Repeat donor above average gift.

Also note the Fundraising Effectiveness Project found the average new donor retention rate of those giving under $100 is only 18% compared to 47% of those giving above $250. So it makes a lot of sense to follow the money when it comes to developing your donor retention strategies for folks giving at different levels.

Strategies to Retain First-Time Donors

You got a new donor – cause for celebration!

Or, is it?

You see, it costs a lot of money to acquire a new donor. Most likely, it costs more than they end up giving you as a first-time gift.

So… it’s imperative you have a process in place NOW to assure this gift is not their last.

Donors are only worth acquiring if you can retain them.

I know that sounds harsh. But you simply can’t afford to keep spinning your wheels on the fundraising treadmill of three steps forward, two steps back. It may feel like you’re getting somewhere, but… it’s just too inefficient to journey that way.

Slow, arduous and painful is not a recipe for nonprofit success.

By the time you get where you’re going (if you get there), both you and your donors will be too exhausted to enjoy it. And many will drop off along the way.

There’s a better way.

1. Begin with a Written New Donor Thank You Plan

Thank you is the beginning of the donor relationship; not the end. If you don’t thank people properly you’re going to lose them by the boatload. However, if you do it right and increase donor retention by just 10% today, you can enhance the lifetime value of your donor base by 200%!

That’s what I call a great return on investment.

But to get that return, you need an investment plan. Does your fundraising strategic plan include goals, measurable objectives and strategies for acknowledging new donors in a timely, personal manner? If not, it’s time to right this wrong.

Research reveals the promptness and quality of your thank you can have a huge impact on whether your donor will give again. According to Penelope Burk’s research, outlined in Donor-Centered Fundraising, the three things donors want most from you have to do with thanking them. It’s not about having their name in lights, receiving a newsletter, annual report or hand-engraved plate or getting to go to a Gala event. Nope. It’s simply a thank you letter that’s (1) prompt, (2) personal and (3) tells them something about the impact of their gift. Plus, they’d like to hear from you at least once – without an ask – before you ask for another gift. That’s it.

8 Core Strategies to Include in your Donor Acknowledgement Plan:

1. Be prompt. Your thank you should get out the door within 48 hours. Period. No arguments. If you don’t thank donors promptly, you’re destroying all the rest of your hard work. A timely thank you gives the donor confidence that you received their gift. It communicates a positive first impression the gift will be used immediately. It lets the donor know they made a good decision.
2. Personalize the salutation. It’s so easy to do this these days with CRM and mail merge programs. Not doing it is lazy. Also, it’s not seen as friendly. Except for judges, elected officials and military personnel, almost everyone goes by their first name today. Also, be sure you spell the name correctly!
3. Craft a catchy opening line. Don’t used a tired, boring opener or anything implying the donor isn’t special. Or that this letter could be from just any nonprofit (See article #1 for some suggestions). Don’t say something like, “Thanks to people like you we’re able to make a difference.” This implies the donor is merely one of a group; you want them to feel personally, specially thanked. Similarly, “Because of donations like yours,” does not convey that their help is what made the difference. This may seem like a subtle difference but, heck; we humans are all about nuance.
4. Tell them the specific impact the gift will have. The donor wants to know (1) you really needed their gift, and (2) how wisely you will use their investment and for what purpose.
5. Mention anything specific they asked you to do. Donors want to know you pay attention. Did they ask for their gift to remain anonymous? Did they earmark their gift for a particular purpose? Did they ask you to notify a loved one the gift was made in their honor? Make sure you include all these things in the letter.
6. Offer something of value. All of fundraising is a value-for-value exchange. A great strategy is simply to suggest other ways to become involved, beyond donating money. And think about some of the other ‘gifts’ you can give folks. Perhaps a thank you from a supporter… a means to get involved as an advocate… a list of tips they can use.
7. Include contact information for a specific person. What if the donor has a question? What if you made a mistake in their letter? What if they want to do more for you? How are they going to reach the right person if you don’t give them a name, phone number and email? Again, this is about building personal relationships. They must be able to reach you easily.
8. Don’t sound like you’re asking for more. A thank you should be pure. Take a good look at your thank you letter. Does it sound a lot like a solicitation? Are you moaning about the need in the community; bragging about all the people you help, and adding that you couldn’t do it without the donor’s support? Too often thank you letters sound exactly like fundraising letters.

2. Consider a New Donor Welcome ‘Package’

Making new donors feel welcome is just common sense. Otherwise, why should they stick around? Plus, it’s a great opportunity to show them they made a great investment, and offer them opportunities to get more involved. So after you’ve sent your prompt, personal thank you, follow-up with some donor love over the next one to three weeks. Remember:

— Donor’s first gift is often a ‘test’; they’re waiting to see how much you’ll value their support and whether you’ll deliver on your ‘promise’ to make effective use of their gift.

— Donor may not have much of a clue what you do. They may have given at an event because a colleague brought them, or a friend asked them, and not because they truly understood and/or believed in what your organization is doing today.

— Donor may remember you from years ago, but a lot has changed since then.

— Donor may only know about one of your programs and isn’t aware of areas of expansion or depth/breadth of what you do.

You don’t want your Welcome Package to be just a big package of all-about-you ‘stuff’ with glossy brochures, an annual report, a membership card (that they’ve absolutely no use for) and bumper stickers (for the car they don’t own) and whatever else you’ve got to throw in there. If you give folks too much they’ll get annoyed you spent this money on them (and, by the way, it doesn’t matter if you got the package underwritten or didn’t spend a lot; the perception is that you did). Plus, the more you throw in there the more the package smacks of a formulaic approach.

You do want your Welcome Package to be the equivalent of a person hand-delivering a basket of homemade muffins. Personal. Warm. Inviting. Special. Not looking expensive. A nice surprise! Something that makes your donor feel really good about their new situation as a member of your organization’s family.

You don’t have to be concrete. The “package” can be a series of emails. They can even be automated and set up to launch at intervals that won’t overwhelm your new supporter – an approach that works especially well with donors who give online. Things to include:

• Dynamite thank you letter to remind donors they made a good decision.
• Helpful information to showcase the impact of their giving.
• Invitations to get involved such as a list of upcoming events and/or tours; list of volunteer opportunities; information about a monthly giving club (be careful that it suggests convenience for your donor, and doesn’t come off as another ask at this early stage of your relationship); survey or questionnaire asking for feedback; list of social channels where they can connect with your community, and anything else you can think of to encourage active participation.
• Testimonials to build trust. If you happen to have a recent newspaper feature, this can be included as ‘social proof’ they made a wise investment choice. Or you can include quotes from clients, donors or community leaders.  New supporters like to know that other folks think you’re pretty hot stuff as well.
• Personal contact information. You don’t want to remain faceless. Give them the name, direct phone number and email of someone they can always reach should they ever have any questions.  Make it super easy for them to stay connected with you.

4 Things to Accomplish with Your First-Time Donor Welcome Strategy:

1. Thank again and inform with relevant useful information. Remember the new donor doesn’t usually have a broad understanding of the depth/breadth of what you do; this is an opportunity to quickly provide a synopsis of recent and historical accomplishments and tell a few stories of people helped. It’s not a place to talk about “our” facilities, awards, programs or rankings. People want to help people, or animals, or the environment. They don’t care about infrastructure.
2. Demonstrate responsiveness and responsibility. If you’re prompt, personal and thorough with your donors, a reasonable person would conclude you’re probably the same way with the people you serve.
3. Begin building a lasting relationship by making friendly overtures. Offer other ways to become involved; show the relationship is a two-way street and the donor is valued.
4. Find out more about the donor. Consider including a questionnaire about interests to encourage donor participation and interaction; then capture this information in your database so that later on you can show them you know them; people like to be listened to.

3. Build a Strategic New Donor Communications Plan

It’s important to close the circle for new donors and remind them why they made the gift. If the donor made a gift specifically towards a campaign to restore a senior lunch program at your community center, then sending a generic thank you or newsletter that talks generally about “strengthening the lives of children, families and seniors” will somewhat miss the mark.

Think carefully about the next several communications your donor is likely to receive from you. For example, if you send an appeal asking donors to help provide scholarships, make sure your next newsletter following the sending of that appeal features an article about scholarships rather than one of your other programs. The subsequent newsletter you send can have a smaller piece about scholarships (just to remind them why they supported you), but can ‘feature’ an article about a different program (to begin to introduce them to the depth and breadth of your mission).

Want more specifics?  You’re in luck!

1. To get started – RIGHT NOW — with a good, simple plan, grab this free e-Book: How to Build a Donor-Centered Gift Acknowledgement Program.

2. Grab a complimentary first-time donor communications plan template here

3. Also be sure to read all the articles in this four-part series on gratitude and retention.

• #1 Nonprofit Donor Retention: Problems & Solutions
• #2 Nonprofit Donor Thank You’s: What are You Doing to Stand Out?
• #3 Nonprofit Retention: All Donors Aren’t Created Equal
• #4 Strategies to Retain Recently Lapsed Nonprofit Donors + Build a Donor Road Map for all Categories of Supporters