ARTICLE
Why Your Nonprofit Needs A Second Gift Strategy
Topics -
Ever hear of this? A “Second Gift Strategy?”
If yes, good for you! You’re likely beating the average when it comes to donor retention.
If not, listen up!
This may be the single most important thing you’ll learn all year.
You. Must. Prioritize. On. First-time. Renewals.
Got it?
PRIORITIZE renewing new donors.
Make it your mission to never settle for a one-time gift. Always have a dynamite strategy for securing the second gift. Once you do, you’re much more likely to get a third, fourth and fifth gift.
I don’t just mean sending an automated receipt for an online gift.
I don’t just mean sending a perfunctory thank you letter in the mail.
Goodness knows I don’t mean delaying for several weeks while you get busy doing other more important things.
I mean going all out to stand out.
And doing so immediately.
Don’t let any grass grow under your feet.
Don’t let your donor worry for a single minute that you may not have yet received their gift.
Do your job, dang it!
Because for a fundraiser, there’s nothing more important than getting that second gift.
And the sooner, the better.
Timing Matters
Never put off ‘til tomorrow a donor you can thank today.
Some stunning research reported by the Analytical Ones blog, The Exponential Importance of Second Gift Timing, shows the five-year value of donors depending on how long it takes an organization to convert them from a one-time to a two-time donor.
You can see the one-time, single givers aren’t worth much. In many cases it costs more to acquire these folks than you’ll receive from them.
The donors who give within the first three months – the ‘golden period’ – are by far the most valuable over the five-year period. You see, recency is key. This is the period folks are most inclined to give again, because they’re still feeling some of the glow they got from giving. If you can (1) get back to them with warm gratitude, (2) show them the impact of their giving and (3) re-inspire them during this critical window, you’re golden too.
New donors who renew within the first three months have lifetime values nearly twice as high as those who give a year later. So if your policy is not to ask again for another year, you may want to rethink that.
Donor Perspective Matters
Have you, or anyone at your nonprofit, ever said “Let’s not ask again for a year because that would be too greedy.”
Get out of your own head!
Remember, donors feel joy when they give. MRI research shows they receive the equivalent of a shot of dopamine that produces a ‘warm glow. And they get this feeling when they even contemplate giving, let alone make the gift. So never fear asking!
Your job is to offer donors who’ve demonstrated a belief in and dedication to your cause the opportunity to repeat their good behavior and re-experience the good feelings they had.
Of course, they won’t have those good feelings for long if you neglect them.
Out of sight is out of mind. Donors who make their first gift are testing you. 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.
They need to be reassured, right away, that they made a good decision. Begin with a prompt, personal thank you. This establishes trust, which is the foundation of any lasting relationship. Show them you received the gift, it had its intended impact, and you’re super appreciative.
Stop assuming donors don’t want to hear from you.
Clearly, the data shows they do.
Of course, you have to do it the right way.
Making Your Donor Feel Like a Hero Matters
Don’t worry about going over the top.
In my experience, it’s hardly possible.
Gush, gush, gush.
The best thank you’s I’ve received are filled with emotion and pathos.
They make me feel good.
See these real live examples, and see what you think:
Avoiding Excuses Matters
Whatever reason you have for not getting your thank you out in 48 hours, I don’t want to hear it.
Whatever reason you have for not making your thank you as personal as possible, I don’t want to hear it.
No excuse is a good one when you’ve invested so much time, talent and treasure to acquire a first-time donor.
Can’t get the letter in the mail right away?
Pick up the phone and call.
Can’t take the time to add a personal note?
At least pick a segment of high-potential donors (e.g., first-time $100+ contributors) and add something special to their thank you’s.
Can’t figure out a way to use a personal salutation rather than “Dear Friend?”
Get a better donor database or email server that enables personalization. People expect it in this day and age.
Can’t take the time to let the donor know when they’ll receive an update on the program being funded, or otherwise just hear from you (e.g., they’ll receive a monthly e-newsletter)?
Shame on you! Donors absolutely must be rewarded, by you, for their giving.
This is not optional. This is one of the most important parts of your job!
Persistence Matters
Stick to your strategy.
If your donor doesn’t renew within the magic three-month window, keep trying. If you look at the graph above again, you’ll notice that donors who give 13 – 24 months after their first give still have a decent lifetime value.
After two years, however, donor values plummet.
And this will be your situation if (1) you don’t commit with all your heart and soul to enacting a robust second gift strategy and/or (2) you give up too soon.
Remember, donors only become profitable once they renew.
The cost to acquire a new $1.00 donor, on average, is about $1.25.
The cost to renew an existing donor, on average, is about $0.20.
Seems pretty obvious what you should be focusing on, no? Learn more: Download this free Donor Love & Loyalty Plan.
Discover How to Maximize the Lifetime Value of Your Donor Database!
Comments
Spend Less And Raise More With These Digital Fundraising Tips
How To Use The Digital Fundraising Cycle To Raise More Online | CauseVox