Amy Eisenstein recently sat down with Dr. Adrian Sargeant, one of the world’s most respected academics in philanthropy, to get his thoughts on donor retention, sustainability and the importance of development training.

Full Transcript:

Amy: Hi. I’m Amy Eisenstein, and I’m here with Dr. Adrian Sargeant, the Director of the Centre for Sustainable Philanthropy. Welcome, Adrian.

Adrian: Oh, thank you.

Amy: Nice to have you here. Why don’t you tell people a little bit about what you’re doing these days, what the Centre for Philanthropy is and what’s going on there.

Adrian: Well, we created two years ago something called the Centre for Sustainable Philanthropy, and that has a very particular goal. There are many institutions around the world who see their role as measuring philanthropy and tracking changes in philanthropy. And they do a very good job at it but that’s not what interests us. What we want to do is to grow philanthropy and to grow in a very particular way by enhancing the quality of the donor experience so that it becomes, as it says in the title of our center, sustainable. People give because frankly they enjoy giving and they get a lot out of it, and that’s our mission is to grow it in that way.

Amy: I’m really excited to be part of it. And one of the things that we’ve done together recently is a research project on major gifts and small shops, hopefully in line with the center’s mission. So why don’t you tell me a little bit about what were the highlights for you from that project and what was the most meaningful outcomes from that research?

Adrian: I think for me it was a fascinating project to be engaged with because it was the first time that anybody really had looked at major gift fundraising in smaller organizations. And I know that’s something that you are passionate about and you want to try and get more small nonprofit organizations to engage. So the question we asked really was, under what circumstances and what is it about the approach of these organizations that allow success to emerge? And so we were able to correlate a whole range of different factors with success in major gifts as measured by the amount raised, the number of gifts, the net amount raised after expenses, and so forth.

And I think for me one of the really interesting factors that emerged from that research that I couldn’t have invented to be as interesting really is the relationship between training and development and success in major gifts. And for every incremental form of training and development that small organizations get involved with, that seems to be correlated with around a $37,000 increase in the amounts that people are willing to raise.

Amy: That is amazing, isn’t it? I mean for going to a conference or becoming a CFRE, and that means more than $37,000 in additional major gift revenue on average.

Adrian: Well, it’s a very good answer to those organizations that often don’t invest in training and development because they say, “Oh well, we can’t do that because they’ll move. You know we’ll train them up and then they’ll go off somewhere else and we’ll have wasted all that money.” What this tells us is that that’s not where the risk is. The risk really is that you know if you don’t invest in them that they stay because you’re never get a shot of them and you’re not gonna see that incremental increase in your ability to raise money.

Amy: That’s right. And this is just such validation for your training budget. I mean, we even found that something as small as a webinar, you’d see a small increase in major gift results. So really of course we want people to invest in longer term diploma-type projects, major gifts courses and conferences, but even any kind of training that you can invest in shows a difference, makes a difference.

Adrian: Absolutely. So even little things like allowing staff to participate in a webinar. You know if there’s a small charge maybe covering that, ad hoc training, local stuff that’s taking place. Now, it’s important to say that the strongest correlations are with the more detailed and in-depth training that you might get at AFP International or by getting a CFRE, or by taking a training course somewhere, a formal course, but everything in aggregate makes a difference.

Amy: Right. Great point.

Adrian: And so I’d encourage boards you know to be willing to allow members of their team to participate in some of these things.

Amy: Great.

Adrian: It will pay back.

Amy: Yes, it certainly will. Good. I’m so excited about that. And if people are interested in seeing the full report or getting all the results or the executive summary, they can find it at the Mastering Major Gifts website, and hopefully they will go see that. But one of the things that you’re known for is donor loyalty and retention. Why don’t you tell me what’s going on with donor loyalty and retention these days?

Adrian: Well, in a sense, not much has changed in 20 years in terms of loyalty and retention. We weren’t very good at it 20 years ago, we’re terrible at it today. And of course there’s a lot of new data coming out from places like the very excellent Fundraising Effectiveness Project. And if you’re not a member of that, you should sign up because it’s great.

Amy: We’ll give people the website for that.

Adrian: But it does give us some depressing statistics on things like first year retention. And we know that between that first gift and second year retention, that we’re only able to retain well, less than 70% of donors. That’s a terrible pattern of attrition.

Amy: That is terrible.

Adrian: There’s an enormous level of churn and of course that comes at great expense to nonprofits who are wasting time and money communicating with people who aren’t necessarily going to give again. And one thing we do know from work in that space is that even small improvements you can engineer in retention in the here and now translate to whopping improvements in the lifetime value of a fundraising database. So 10% increase in retention and loyalty now can lead to something like a 200% increase in the lifetime value of that fundraising database

Amy: That is amazing.

Adrian: And why? Well, because the effect compounds over time. So you lose fewer people this year, you’ve got more next, more the year after. People hang around for longer, they upgrade their giving, they recommend a friend, they do volunteering, they give to the emergency appeal. And if you keep them around for long enough, maybe they might even think about leaving a bequest at the end of their life to support the work of the organization they care about. So put a dollar value on all those things and small improvements and loyalty really make a huge difference.

Amy: Yeah. So what are one or two drivers of donor loyalty and things that people can do to increase their retention numbers?

Adrian: Well, we know quite a lot now about the things that drive loyalty and retention. Some of that originally came out of the commercial world because they’ve understood what drives customer retention for a very long time, and go figure that the factors are actually quite similar. So the big driver of loyalty is how satisfied donors are with the quality of service that they’re getting from the fundraising team. And it’s quite entertaining at conferences to ask participants, “So how many of you guys measure it then?” And when I started doing this sort of work 20 years, nobody would put their hands up. Now you get one or two hands go up.

So then you ask the follow-up question, “All right. So how many of you then reward and remunerate your fundraisers for how good donors feel?” And of course no hands are going up because we’re not quite there yet. So satisfaction is key.

Commitment, which I define as a real burning passion for the mission of the organization, is another big driver. So unsurprisingly if you’ve lost somebody to say breast cancer, you’re pretty motivated to stay and find a cure for that, right? Because it did hurt you. But also trust in the organization, trust that the organization is going to do what it says it’s going to do with the money and with the impact that your gift is going to have on the beneficiary group. And collectively those are the three big drivers.

Amy: Yeah. I think probably some of the reasons that organizations don’t measure it is they’re not sure how. What’s a simple way that a small organization might be able to measure some of those things? Because that might seem abstract to some of our viewers.

Adrian: It’s a matter really of constructing a little survey. It might go out to everybody once a year, it might go out to a smaller sample of donors on the database, and it could even go out to corporate supporters. Sometimes we’re a bit shy of sending stuff to major donors and corporate donors. But actually in their world, they’re putting out those things all the time and they understand why they’re important, and they’re flattered to be asked because they know why you’re trying to do it.

So there are little short surveys that you could administer that could be included in something else that you’re sending out. So it’s not a huge deal. And they don’t take more than a few minutes to complete. So it’s not a big problem for donors to complete it. And you should always have at the end of that the opportunity for them to raise any issues or concerns they might have.

Amy: A comments box. Yeah.

Adrian: So it gives you the opportunity to go back to them or correct anything that maybe hasn’t quite worked for them this year.

Amy: Perfect. And the importance of follow-up is key. You really do want if somebody raises an issue, you’ve got to follow up with them.

Adrian: Yeah, there’s something we call the service recovery paradox. And what that is is that people who’ve had an issue, if they tell you about it and you fix it for them, they are a heck of a lot more loyal than if they’d never had a problem in the first place.

Amy: Absolutely.

Adrian: So there is absolutely no reason to shy of encouraging people to tell you stuff because even if you can’t fix it, they’ll still be more loyal.

Amy: As long as you follow up.

Adrian: Yeah.

Amy: As long as you listen well and try and acknowledge it, right?

Adrian: Exactly. So this is why now in the U.S. we don’t talk about complaints anymore, it’s opportunities.

Amy: Excellent. I love opportunities, yeah.

Adrian: Opportunities to build loyalty. Yeah.

Amy: Good. Speaking of opportunities, let’s wrap up by talking about the new fundraising diploma programs that you’ve worked on with AFP. Tell us what they are and what kind of opportunities they are for people.

Adrian: Well, I’m really excited that for the first time AFP have invested in a training and development program. Now, they started CFRE some years ago, as you all know, and they still own ACFRE. But you have to wait five years or maybe a little less. I think there’ a change going through at the moment, but for you have to wait for a while to certify for CFRE. So we wanted to create something in the first instance that people could take when they come into the profession for the first time. After maybe they’ve done the foundations of fundamentals course, but something that will be a substantive block of learning that would give them a real detailed understanding of what we know from the science of donor behavior, and the practice of different forms of fundraising.

So this is for somebody who is at the beginning of their career really wants to get a detailed understanding of what we know from the practice and the science of these different forms of fundraising, and learn about how all that stuff works, so that ultimately maybe they might think about developing their career as a manager or even a director of development one day, and then after five years, maybe they go on and they get their CFRE accreditation.

And then we wanted to create something for somebody who’d been in the profession for 7 or 8 or 10 years that would give them the kinds of knowledge that they might need at that stage in their career to take on being a director of development at a substantive organization. And so the Advanced Diploma in Fundraising isn’t about doing the fundraising. It’s not even about managing the fundraising, it’s about managing the organization to release fundraising’s potential. And so there’s a heavy blob of some of the latest work coming out of conflict management and organizational behavior, internal marketing, philanthropic psychology. A big element of how you manage the organization.

And then something I’m particularly proud of at the end of that course, most of it is around managing the organization to allow fundraising to be successful. Well, the final unit is about how we bring about a change in philanthropy in a nation. So what I wanted to do is to get these smart people in the class together to think about how you kick up philanthropy beyond the 2% of income that is here in the U.S. right now. So thinking about the wider role of the fundraiser, and what they could be doing to help influence the profession to punch philanthropy to the next level.

Amy: Great. Brilliant. So two new courses. One, the Diploma in Fundraising. That’s for beginners at the beginning of their career and one that’s really advanced. Well, towards the middle of somebody’s career who really wants to take things to the next level, which ties in beautifully to what the center is doing, right?

Adrian: Absolutely.

Amy: It matches the mission of the center as well as AFP, so it’s a beautiful match it seems to me.

Adrian: Yeah. That was really we heard from a lot of people that they were a bit frustrated when they’d been in the profession for seven, or eight or nine years that they weren’t getting an awful lot out of conferences at that point because they were the people doing the speaking. So they needed to be something that would plug them into some of the latest science where they could actually feel that they’d learned. And I’m happy to say in the pilot that we ran last year nobody said, “We know all that stuff.” And in fact I think we made them sweat a little as they went through the program. So that’s really nice.

Amy: Oh, that’s beautiful.

Adrian: You know it means that we’ve kind of hit the mark I think.

Amy: All right. Great. And people can sign up for those courses at AFP’s website?

Adrian: Yes, they can.

Amy: Okay, perfect. Well, thank you so much for being here. I really appreciate it and enjoyed talking with you today.

Adrian: My pleasure. Thank you, Amy.

Amy: Thanks.

I hope you’ve found this video empowering. As a member of the fundraising community, I hope that you will empower others by sharing this video with your friends and followers. If you’d like more videos and tips on fundraising, please visit my website amyeisenstein.com. Thanks for all you do to make the world a better place.

Major gift fundraising

Kristen Hay

Kristen Hay

Marketing Manager at Bloomerang
Kristen Hay is the Marketing Manager at Bloomerang. From 2018 - 2020, she served as the Director of Communications for the Public Relations Society of America's local Hoosier chapter. Prior to that she served on several different committees and in committee chair roles.
Kristen Hay