Simply acquiring donors will not sustain your nonprofit.
Because most new donors are here today, gone tomorrow.
The latest Fundraising Effectiveness Project research reveals only 23% of first-time donors ever make another gift.
You don’t satisfy them!
Donor satisfaction begins with how you communicate. When donors make a first gift, it’s often a token amount and largely a test. They aren’t sure of you yet, and want to see what you’ll do next:
- Will you tell them how much their gift meant to you?
- Will you show them what their contribution will specifically accomplish?
- Will you engage them moving forward (aside from asking for another gift)?
- Will you reassure them they can trust you through transparent reporting?
- Will you inspire them to give more by telling compelling stories of success?
- Will you reward them and make them feel like good people – even heroes?
If you don’t satisfy donors they made a good bet in investing in you, they’ll go elsewhere.
As soon as you receive a gift, you should begin to think about how to get the next one.
Do you have a satisfaction-based “next gift strategy?”
Once a donor gives, they inevitably wonder “what’s in this for me next?”
Whenever I’ve called lapsed donors to find out why they failed to renew, the top reasons given were:
- No one thanked me.
- I wasn’t sure my gift made an impact.
- This wasn’t what I expected would happen with my gift.
- I’m not really sure what you do.
- I’m not that connected to you, and have other priorities.
All of these reasons boil down to:
I wasn’t satisfied giving to you made sense for me.
When you don’t satisfy donors that you’ll add value to their lives, they won’t remain loyal.
Satisfaction is viewed as the consequence of a comparison between expectations and overall evaluations of delivered service quality. In other words, people compare what they expected to get with what is actually delivered. They only experience satisfaction when their expectations are either met or surpassed.
At its foundation, philanthropy is a value-for-value exchange. The donor offers money; you offer a reward in exchange. Usually the reward is intangible – a feeling of giving back, fulfilling moral or religious obligations, identifying as part of a larger community or simply being a good person.
Donors want you to see them, so they can see their best selves reflected in the mirror you hold up to them.
If you don’t hold up a “you’re looking good” mirror, they’ll look elsewhere.
You say you don’t have time for this?
A large-scale analysis of database records led by Dr. Adrian Sargeant in 2001 (and repeated numerous times up to the present) showed if you hold up the mirror just a little bit more, it can make a significant difference. Just a 10% improvement in donor attrition can generate a 50% increase in lifetime value of your donor base.
There’s no better use of your time than trying to satisfy current donors – especially considering donor acquisition costs money. Net/net, donor retention gives a far bigger bang for your buck.
If you can also persuade donors to upgrade their giving — using a variety of strategies we’ll discuss below — you can achieve up to a 200% increase in projected value. And that’s just from donors you currently have – no need to beat the bushes and look elsewhere!
Do you have a satisfaction-based “upgrade strategy?”
An individual’s first contribution is almost never their largest one.
However, they’ll never buy more from you if they’re not satisfied with their initial purchase.
But let’s assume you got that right. You’ve got a satisfied donor. You didn’t make any thank you mistakes, you began some good donor stewardship, and now you’re ready to move your donor to the next level.
You’ve got to keep the satisfaction coming.
Once you’ve got a donor in the door, you’ve a myriad of opportunities available for cross- and up-selling.
In this, article we’ll cover my ‘Top 10’ strategies for donor upgrading. But first it’s important to understand donor psychology.
Why Donors Upgrade
Donors upgrade their average gift size or frequency of giving during the year for three reasons:
First, because they believe in your mission. It’s incumbent on you to show and tell them what impact their giving has on the world – in a manner that aligns with donor values.
Second, because they trust you and feel you’re using their money wisely. It’s incumbent on you to demonstrate your trustworthiness through effective leadership and transparent reporting.
Third, because they’re asked to upgrade. While some donors upgrade their giving without being asked, most donors wait to be asked – or at least to be offered a darn good reason to give more.
Let’s look at 10 ways to motivate donor upgrades, both by securing multiple gifts in the course of a year and larger gifts over time.
1. Gratitude & Reporting
2. Content Marketing & Engagement Experiences
Give a gentle push
3. Tribute Giving
5. Monthly Giving
6. DIY P2P Fundraising
Make a direct ask
7. Giving Societies & Benefits
8. Specific Increase
9. Special Campaign or Project
10. Legacy Giving
This is a proactive stewardship approach, or wooing, on steroids. It’s often called ‘relationship fundraising.’ When you go out of your way to actively build a relationship, chances are your donor will reciprocate. They’ll grow so fond of you, the next time you ask for money they’ll be naturally inclined to give more. Because they know and trust you.
There are two primary ‘self-upgrade’ strategies:
1. Gratitude & Reporting to Inspire Trust
Trust is the foundation of all long-term relationships. You’ve an unwritten contract with your donor. When they fulfill their end of the bargain (giving), and you don’t fulfill yours (thanking and reporting), you break their trust. You want to keep your donor over the long term, right?
Build a reputation for following through on your promises.
Your entire organization is on the hook here. This is where building a culture of philanthropy becomes truly essential. Everyone involved must understand donors give only because you deliver. Program staff must be persuaded to share the news of their on-the-ground work with fundraising and marketing staff so they, in turn, can share it with donors. Otherwise, the vital value-for-value exchange relationship (donor gives money; donor gets value of change enacted) gets short circuited.
TO-DO: Make a point of telling program staff fundraising success is truly their success. People give because they did their jobs so well. Development staff are simply the middle person. Once you’re armed with results, send impact reports that demonstrate you spent your donor’s money exactly the way you said you would. Match your communications to donor intentions. If their giving achieved results, don’t leave donors hanging. Reassure them with thank you letters, blog posts, e-newsletters, stories on your website and social media messaging. Repeat gratitude and reporting frequently . If you don’t, they’ll forget all about you and move on to someone who does follow through with them.
2. Engagement Opportunities (Content Marketing & Experiences)
Fundraising is personal. You’ve got to be there for folks consistently in a way that’s meaningful to them. Years ago I worked at a comprehensive, cradle-to-rocking-chair social services agency. Our motto? “When you need us, we’re here for you.” Make that your mantra, whatever your cause.
If you want gifts, you must give them. To gently coax donors to consider larger gifts, you can’t always be asking. Remember – there has to be as much in this for your donor as there is for you.
TO-DO: Brainstorm your potential ‘gifts’ of content. Most nonprofits have tons of useful stuff lying around, just begging to be shared with donors. “How-To’s,” “Checklists,” and “Recommendations.” Research and white papers. Videos. Even recipes. Take the time to pay attention to what your supporters needs are. You have to be a problem-finder before you can be a problem-solver. Problems can be very close to home (like keeping children or parents safe) or more idealistic (like preventing global warming or protecting free speech). You can also send birthday and holiday greetings and condolence cards; it ‘helps’ folks to feel remembered.
Take donors on a deeper and deeper experiential journey. Give them stuff to do, beyond simply giving money and reading about you. They need “skin in the game” connections. Some will already have them (e.g., they or someone they know used your services; they attended an event; they volunteered). When these connections haven’t happened, it’s your job to make them happen!
TO-DO: Brainstorm your current engagement opportunities. If you don’t have sufficient options, create some new ones. They can be real (e.g., events, one-off volunteer activities) or virtual (e.g., surveys to take, petitions to sign, games to play). Get stakeholder buy-in; in my experience, volunteer and program staff who are involved in these hands-on opportunities do begin to see the benefits.
Give a gentle push
It’s not difficult to persuade folks who’ve made one gift to make supplementary gifts through the course of the year. I call this the ‘gentle push’ strategy, because you’re not directly suggesting a larger annual gift. Folks will barely even notice they’re giving more over the course of the year.
You suggest things that make their lives easier, more enriching or just more fun!
3. Tribute Giving
This is a ‘make life easy’ strategy. You offer the opportunity to fulfill an obligation, such as giving a birthday present or memorializing a loved one, by making a donation in honor or memory of someone.
TO-DO: Promote this on your website, via special tribute giving envelopes, and as a check-off box on your donation remit piece and landing page. You can include tribute envelopes in newsletter and annual report mailings as a donor convenience, and even donor thank you letters. Done right, this is perceived as a ‘soft’ ask (I’ve even had donors call and ask me to send more envelopes!).
This is a ‘make life fun’ strategy, and can be implemented through both physical and online events. It may be an invitation to attend a Gala, an online auction, or a chance to participate in a giving day campaign like #GivingTuesday.
TO-DO: Plan ahead to make a case for support, one or more times during the year, that’s different from your general, unrestricted annual appeal, and presents something that’s compelling, engaging and communal. Folks who make a $500 annual gift can easily be persuaded to also buy a $25 raffle ticket or make a $15 gift to your Thanksgiving Turkey Drive.
5. Monthly Giving
This is a ‘make life enriching’ strategy. Who doesn’t want to feel the joy of feeding hungry people every month, rather than just once? Joining the ‘Meal a Month’ club feels tangible and elevating. Your donor may actually find making a $10/month gift more manageable than a single $100 gift – and they’re instantly upgraded to a $120/year donor. That’s a 20% increase without really having to break a sweat! Extra bonus: Retention rates for recurring gifts are significantly higher than for one-time gifts.
TO-DO: Don’t yet have a monthly giving program? Come up with a catchy name for your ‘club’ and build a plan to implement and promote it. Begin with your most loyal donors – those who give several times a year. Put a seamless back-end system in place. Already have a plan? Consider ways to strengthen it by making it more user-friendly, offering more benefits, and engaging more frequently to make your members feel special. Create a monthly donor welcome kit. Put up a monthly giving web page with FAQs that address (1) how easy it is to give; (2) how the program provides ongoing, reliable funding for specific programs, and (3) how the program helps the donor. Then pick a segment of loyal supporters to ask for increased monthly gifts.
6. DIY P2P Fundraising
Do-it-yourself peer-to-peer campaigns can be both fun and enriching. It’s the flip side of tribute giving. Instead of donors making gifts in tribute to others, you make it easy for donors to ask others to make tribute gifts in honor of them (e.g., for their birthday, wedding, anniversary, graduation, etc.). This serves as a soft ‘upgrade,’ because the value of your donor to you increases as their personal giving is multiplied by that of their friends. Plus you now have a bunch of new donors to renew and upgrade!
TO-DO: Put P2P systems in place. Numerous companies will build online, customizable fundraising pages for you. Many will also advise you how to build and promote your program, and they’ll even integrate these pages with your social media accounts so folks can instantly spread the word about your campaign.
Make a direct request
7. Giving Societies & Benefits
Most times donors are satisfied with intangible benefits (i.e., ‘feel good’ stuff), but sometimes tangible rewards can bump their giving to the next level. This is where giving societies come in. They’re particularly useful for arts organizations and civic institutions (e.g., museums, zoos, symphonies, ballets, operas) where folks receive admission, special tickets, events, parking and the like) at patron and benefactor levels. But giving societies can work well for any nonprofit by fostering a special feeling of community, which helps folks identify as being ‘members’ of the ‘Leadership Circle’ (or whatever clever name you come up with).
TO-DO: Determine giving levels and benefits at and above your major gift level. Ideally, plan to publicly list the names of folks at their giving level; this makes people feel special and inspires others to follow their lead by serving as testimonial – social proof – that affiliating with you is a good bet. You can also hold exclusive events for society members, thereby fostering identification with your community – building relationships and loyalty.
8. Specific Increase
Make your case by answering this simple question: “What will an X% increase in giving make possible, and how will that meet your donor’s needs?” Don’t simply say “Please give more.” Imagine your kid asks for an allowance raise. You’re likely to ask why they need it, right? And if your kid can show you how it meets your needs too (“I need lunch money – so you won’t have to make my lunch every day”; “I need bus money – so you won’t have to drive me everywhere”), they’ll likely succeed.
TO-DO: Put in place a plan to get to know your donors’ needs and interests. Send a survey. Ask for comments on blog posts and feedback on social media. Make phone calls and schedule personal visits. Talk to donors at events. Every time you learn something, record it in your database so it becomes part of your organization’s collective memory. Once you know your donor better, you’re ready to develop a tailored ask (“Last year you gave $1,000 to support our food distribution system. This year we expect a 20% increase in clients. Would you consider a gift of $1,200 this year so we don’t have to turn anyone in need away? I know you were concerned when we had waiting lists last year).
9. Special campaign or project
When you know a donor’s philanthropic interests, you can present an explicit ask for a gift that’s larger than their previous one. This may simply be a major gift ask for your annual campaign, or a special pitch for a capital campaign. Either way, you must know what floats your donor’s boat. It’s never too late to begin to find out.
TO-DO: Ask for a visit! Getting face-to-face with donors is one of the best upgrade strategies there is. Once you know you’ll be in their ‘love territory’ with your ask, tell them what the project costs, what it will accomplish, and specifically how they can help. (“Last year you gave $1,000 to join the Leadership Circle. I know you’ve been inspired by our community pantry program. It costs $1,800 to open a pantry; would you consider a gift of that amount this year?”).
10. Legacy giving
Sometimes donors can’t upgrade their giving during their lifetimes, but they can make a meaningful bequest. This is an often overlooked strategy to boost the lifetime value of your donor.
TO-DO: The easiest tactic is simply to ask folks to remember you in their wills. Include this message everywhere – on your remit devices and landing pages, on your website, in your newsletter, on your carrier envelopes, and even in your email signatures. Also, when you make major gift asks, question your donors about whether or not they’ve included you in their estate plans. If not, ask them what it would take to persuade them to do so. Sometimes it’s as easy as signing a beneficiary form for their retirement plan; they don’t even need to visit an attorney.
For all of these upgrade strategies, as with any fundraising strategy, segment your audiences so you lead with the best approach. Data-driven donor management will enable you to strategically design and present appropriate asks – gentle or direct — for particular donors. Here are some general guidelines
- First-time donors – Steward consistently; don’t attempt to directly ask for more until after their second year of giving to you. Work on retaining their support and building their loyalty through gratitude, reporting and engagement experiences.
- Ongoing donors; Multiple annual gifts – ( 2years+) – Ask to consider joining your monthly giving club and/or ask to consider an increased annual gift, additional gift, tribute gift or legacy gift.
- Major donors – Ask to consider increased gift for a particular project; ask to consider an upgrade to join a higher level gift society; ask to consider a legacy gift.