Last week’s post referred somewhat mysteriously to a new character entering this story and boldly impacting the storyline. That mysterious person will probably be new to most of you. He is currently an Affiliated Scholar at the National Center for Charitable Statistics (NCCS/CNP) with The Urban Institute in Washington, DC. His name is Bill Levis.

Bill called me during the middle of a golf round while I was on vacation in the summer of 2006. He had been tasked with the objective of creating a national set of metrics for fundraising results in the nonprofit sector. He had been analyzing various data for the sector from numerous directions for the Urban Institute. (I encourage everyone to peruse their web site because the data is some of the best in our sector and is quite informative.)

He had quite a groundbreaking idea; in fact, it was probably 10-20 years ahead of its time. As he explained the idea, others kept referring him to Jay Love. Perhaps it was fate or maybe luck or the foresight of those other folks in the sector, which caused our paths to cross. This groundbreaking idea was to pull summary data directly from commercial fundraising databases to the measure the actual effectiveness of fundraising activities for charities of all types and sizes. (You see, prior to his bold new concept, the results were based upon surveys where people answered with what they thought was happening. Come to find out, the real results based upon actual data in thousands of databases would paint a much bleaker picture!)

During Bill’s search for data, his trusted sources kept telling him to reach out to me because of our web based program eTapestry was truly built to share such summary data without going through the gauntlet of activity and frustration nearly every other in-house fundraising database required in order to share data. Our product, just like Bloomerang is now, was built from the ground up to make this MAGIC of data sharing happen. Needless to say, but this brought a smile to Bill’s face. Even now, six years later, my former database software still provides nearly 90% of the data used for Fundraising Effectiveness Report each year!

During our now infamous initial call, where we continued chatting even though I had to the lay the phone on the ground several times while hitting golf shots with my playing partners, I determined not only did our product have the data, but we had the perfect summary format for his analysis. Yes, it was the exact same report from my last post the original FM Executive report called Giving Dynamics! (Many thanks are in order for my partner Steve Rusche who worked closely with Bill explaining the subtle nuances of this outstanding comparison report.)

In this one report you can see exactly what occurred from year to year for every organization involved in fundraising. It truly brings the truth to the surface on whether an organization is moving forwards, standing still or moving backwards in its fundraising efforts. Here is a link (courtesy of the Association of Fundraising Professionals) to the latest report. (Please note the graphs in figure 3 and figure 4 on page 9, which are our beloved Giving Dynamics report in all of its glory!)

Between the efforts of Bill, Steve, me and others, this report has come to life year after year. Recently, AFP and The Urban Institute have added The Donor Retention Supplement.

Here is the actual headline which caught my eye:

2011 FEP DONOR RETENTION SUPPLEMENT

November 17, 2011
Overall Donor Retention was 41 Percent in 2010

Since I am a board member of numerous nonprofits, reading this number scared me because if Donor Retention is 41% then Donor Attrition is 59%!

This flew in the face of everything I had been taught in my nearly 30 years in this NPO sector. I had attended training sessions at fundraising conferences from Seattle to Miami to Toronto to London to Amsterdam to Sydney to Mexico City as well as graduating from the highly respected Fundraising School at the Center on Philanthropy at Indiana University.

Every conference session and the week long fundraising school stated over and over how donors are very special. They went on state that these special people, corporations and foundations are relationships to be valued and more importantly nurtured. I can still recall hearing many of the finest fundraisers in the world outline passionately the very steps in nurturing those first time donors into becoming second time donors, progressing to annual giving donors, then on to major gift donors and perhaps even legacy donors over time!

This is where my mind starting racing. If the average NPO was losing nearly 60% of the donors they had worked so hard to attain the previous year, and this metric was getting worse rather than improving, the idea struck me that perhaps the fundraising database people use every day with this valuable asset we call donors could and should be part of the solution.

There had to be a huge opportunity to help turn the downward trend in donor retention rates around for charities involved in fundraising. Maybe the databases were causing the staff at fundraising organizations to not pay close attention to the best practices in donor retention and loyalty.

I had also noticed how complex all of the fundraising database programs had become. (Some of them even require a week or more of intense training just to begin using!) What made the complexity issues worse was the fact that the person responsible for the repository of all the valuable donor information and outgoing communications, the database administrator, is more times than not a position with high turnover. Perhaps the complexity and complicated user interfaces of the databases were causing the donor retention rates to fall in some manner too.

My search for a solution brought in another two key characters to this story. Ironically, both would be considered experts in their field. In addition, both of these individuals possess the rare talent of being able to convey their immense expertise in easy to understand manner.

In the final chapter of this story, I will introduce both of these individuals and share how they enabled Bloomerang to become part of the solution to improving donor retention rather than causing it to worsen. Their roles and expertise provide quite a happy ending!

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.