Donor Retention—and what you can do about it

Steven Shattuck, Bloomerang’s Chief Engagement Officer, is one of the best presenters and educators at nonprofit conferences. I’ve followed his work for years and, in particular, found his insights about donor retention helpful. I invited him to give a webinar for Big Duck’s newsletter subscribers recently. In case you missed it, I highly recommend watching the recording, and here’s the transcript if you prefer to read. – Sarah Durham

So, donor retention, what’s going on? If you’re attending this webinar I assume you’re at least somewhat curious about donor retention and what’s going on there. I’m just gonna kind of give you, like I said, a little bit of a crash course on the current state of donor retention, who’s looking at it, what they’re finding. The primary research group into donor retention is Fundraising Effectiveness Project. There are other people looking at donor retention, but FEP is my favorite. I’m involved with them. Bloomerang has been involved with them since pretty much their start.

What they do is they study donor retention in the non-profit sector every year. A lot of people don’t know this but many of the leading donor management systems like Bloomerang, Donor Perfect, Neon, other programs that you probably have used or maybe you use right now, we send FEP our anonymous customer data every year. What they do is they crunch those numbers and release an annual report that just shows how well all those non-profits are doing at retaining their donors. This is a massive data set. This isn’t just some little small snapshot of just a few non-profits. Between Bloomerang and all the people who send data to FEP, I think the last report was something like nine billion, with a B dollars of financial transactions, so this is a pretty big picture of the entire sector at least in North America.

I wanna share with you the most recent data. This is from the 2017 report which studies the 2016 year, so it’s always about a year behind just because it does take a while to crunch those numbers. On average, non-profits are retaining only about 46% of their donors. Now that is across all donor types, first time donor, repeat donor, all donor types, all donation amounts. That’s kind of the aggregate number, but what I really appreciate that SAP does is they really drill down into different donor types. I think the most important bucket here on the screen is first time donors. People who have only made one gift to your organization, that first gift.

We’re only retaining about eight out of ten of those donors, which to me is kind of the most frightening metric. Right? We’re losing almost eight out of ten of the donors who give to us for the first time. So this is troubling for a lot of reasons. One is totally fixable and we’re gonna look at some things that we can do to mitigate that number. It’s very expensive for us. Right? If the cost per acquisition for that one gift was great than the gift amount that they gave you, you’ve got negative ROI. Right? If you spend $10 to get a $5 donation, you need a second gift to at least break even, let alone get into sort of the positive revenue territory. This is what happens, we actually lose money on this first time donor retention issue, which hurts our bottom line and effects all aspects of fundraising.

But, the good news is, and what I’ll be talking a lot about in the second half of this presentation is that if you can get a second gift those retention rates almost triple to 60%. If you get a second gift, you’re in pretty good shape. A lot of people accept that first gift and they kind of kick up their feet and say hey we did a great job. They gave $20, they gave $25 whatever, but to me the real work of fundraiser and maybe the more fun part in my opinion is getting that second gift. Then if you can get a monthly commitment or a monthly donor or some sort of recurring transaction. Maybe they say hey you can you hit our credit card every month or draw from our checking account every month or every quarter whatever it is the retention rates are sky high, upwards of 90%.

Like I said, this is not the only donor retention study that’s out there. Most of them are very closely done. I like FEP just because of their methodology and the data set that they use. This is the current situation and you’ll see in a couple more slides that this is pretty much what we’ve been looking at for the past 10 or 12 years, not really changing too much.

We looked at gift frequency, what about gift amount? It probably will not surprise you to hear that the higher that gift amount, the higher the retention rate. Right? If someone gives a larger gift they probably have more skin in the game, maybe they have a higher comfort level with you. They know you a bit more and they engaged with you, whatever you want to describe it.

The lower gift amount, those tend to have lower retention rates, especially if you cross reference that by the gift frequency. So I wanna draw your attention to that bottom left corner of this graph. New donors, which we saw were 23% across all gift sizes, but when you drove down into gifts that are below $100 that 23% drops to 18%. More than eight out of ten donors we’re losing for gifts under $100. That’s kind of the typical, average gift size, at least what I see in my Bloomerang customers. You know $50, $70, $25 I’m thinking Giving Tuesday gift, maybe online day giving gift, year end gift. They’re usually in that territory. The first time donors who give under $100, they are the most risk of lasting. We’re gonna talk about something you can do to improve that number, as well as all the numbers on the screen. Just to give you a sense that retention usually does flow with the gift size as well.

What about retention by organization type? Not a whole lot of difference. It’s usually between that 40% and 50% number so it pretty much keeps on par with the 46% across all donor types and all organization types. Couple stand outs, faith based groups tend to outperform other groups maybe because there are other reasons that people give that may be faith based associated or some sort of dogmatic reason. Something like that. For the most part most groups and organizations are in that 40% to 50% range. Not a lot of stratification there in terms of cause type or organization type.

Not a lot of difference in age as well. I think it’s sort of a myth that maybe people think that the millennial donor tends to move their dollars around. They’re not staying around organizations very much. Not necessarily true. Baby boomers and sort of the retired generation, they don’t have a significantly higher donor retention rate than the younger donor counterpart. We do see that by channel offline gifts do out perform online gifts in terms of retention. That kind of makes sense. It’s easy to give five dollars through Facebook if you see a buddy who’s raising money for a cause versus maybe going to an event or responding to a direct mail piece where it’s a little bit more target view or maybe you have got an actual organization. Again, there’s not much difference across those channels or those age groups. It really does boil down into gifts frequency. My main takeaway for you from all this is that these frequency of the gifts should be more drive how you think about retention, not so much the channel that we may seek for certain demographics of donors.

Just another digative point here that sort of collaborates the FEP data. This is target analytic on donor retention, I mean, which is also very good. They pretty much are in line with the FEP study. Mid 40’s for all donor types and high 80’s and 90’s for those monthly donors. Monthly donors are great, but try to always go for the donor retention, getting that monthly commitment, which make sense right. You’re charging their credit card every month. You got them. They don’t have to do anything in terms of writing a check or calling in to make a donation. Sometimes they forget about their donation. Sometimes it’s hard to cancel their donation. It could be awkward or maybe embarrassing to call and cancel that gift. So if you care about donor retention you should really care about monthly giving because that’s the key to really high retention rates.

Like I said before for as long as FEP has been studying donor retention, it hasn’t really changed. It’s actually back to where it was when they started back in 2005. The lowest it ever got was 39%. That was actually the year that Bloomerang was founded, so I kind of like to think that maybe we’re helping out a little bit on the retention side, but I have no evidence to back it up necessarily. Another reason I show this graph is this are real opportunities for organizations to focus on donor retention and stewardship and donor love and all the things that Sarah talked about on why we’re doing these webinar series.

Most organizations don’t focus on retention. Most are just kind of happy with that status quo or maybe unaware of a status quo that over half of donors don’t come back again. So, what’s a big deal? I just went through a ton of data. I’m sorry about that. Hopefully you had your cup of coffee or your lunch already. What does this really mean? What are the consequences or the effects of donor retention rate? One thing, your pool of donors, your list of donors, the donors you have in Bloomerang, or Razor’s Edge, or Salesforce, whatever you’re using, they go away very quickly, even the modest or average donor retention rate. I would draw your attention to the bottom row of this graph. 60% attrition rate which is a 40% retention rate so that’s a little bit lower than average but kind of in the ballpark.

If you have a 1,000 donors on your list, at a 40% retention rate, you’re down to 400 donors after one year, so 600 donors that you spent money to get their gifts, you spent time, energy, all those resources to get 600 of them are out the window after one year. Then you can see over the course of three, four, five years that entire list of donors basically evaporate into almost nothing. Every five years at about a 40% retention rate you are starting over every five years building up your list of supporters.

To me as a non-profit EE that does not sound very fun. Right? Going out and convincing a 1,000 strangers every five years to give to our organization. Wouldn’t it be great to just keep those 1,000 donors over the course of five years and bring on new ones in addition rather than having to replace those 1,000 donors. That’s what you wanna do. If any of you are major gift fundraisers, this should actually be particularly alarming to you because you know as a major gift officer you need prospects that have been giving probably at least five years to even think about [inaudible 00:15:18] management or starting to steward them for a major gift. So that 10 there in that bottom right hand corner, that’s your major gift prospects list. That is not a very big list to work off of. Major gift fundraisers, I think, this is a side of maybe the biggest victim of these donor retention rates because that really effects who they can call on for those larger gifts.

What about dollars raised? We looked at donors. You have quantity of donors, but this graph simply illustrates what the effective dollars raised is based on retention rates. Super busy slide. I’ll just sum it up this way. If you can change your donor retention by just one percent, if you’re an organization that raises about a million dollars a year, a one percent change at a million dollars a year, usually works out to about $40,000 extra raised. So, a small change in donor retention can mean a lot of money that you get from those retained donors.

This graph illustrates a 10% difference between two pretend organizations. You can see the organization that has a 10% higher retention rate, they’re getting almost a half a million dollars more over the course of the lifetime giving from those retained donors. That’s a lot of money. That’s only a 10% difference in retention. Sometimes when the fundraisers I know or customers that we have, they’ll tweet me or email me or send me a conference email and say hey Steven we went from 46% retention to 47% retention this month. I get really excited because I know that even though that’s only a one percent difference that can mean a lot of extra money from those retained donors. To me the goal isn’t shooting for a specific donor retention rate, I would shoot for an improvement, a one percent improvement in a year or two percent improvement in a year. That’s probably the more achievable goal for one, but the one that’s really gonna make the most difference rather than just sort of an arbitrary retention rate goal.

If you’re not convinced yet that retention is the way to go, some other data here from the Louis School of Philanthropy. Basically new gift acquisition is much harder and more expensive than retaining donors. Response rates are way higher then new donor acquisition rates. Sending a mailer to someone who’s never give to you before is not gonna be as successful as getting someone who has donated to you before to give again. It’s kind of a common sense thing, but just some date in case maybe you need to [inaudible 00:17:46] yourself to talk to the board or maybe a boss and convince them to focus on stewardship rather than acquisition.

Last bit of bad news then we’ll get to the good stuff as well. Retention really is a game of musical chairs. Maybe you’re thinking that’s okay, we’re just gonna go and acquire new donors. No big deal if people leave. We’ll have an event or we’ll do an online day of giving and try to get new donors. The problem with that is that the average American household does not spread their money, their charitable giving across many organizations. This is a really cool study that’s done every few years by the Lilly School of Philanthropy, it’s a philanthropy panel study. Super meaty study. I actually think it takes maybe 10 years between the editions because of how much data and panels they do aside from the data. But, one thing that they do in this study is they study charitable giving across households by income. You can see here that the average sort of middle-class household, you know 50K-ish, they’re only supporting two or three no-profits a year.

The problem with that is that you can throw two out of those two to three out the window immediately because one is probably their church or some sort of house of worship that they belong to. The other is the school that they’re connected with, maybe somewhere they send their kids currently or maybe where they’re grandkids went or maybe where they went themselves. So that sort of middle-income level, you’re really competing for only one seat at the table, one chair in that game of musical chairs.

Then as you go up the income ladder, it doesn’t really increase significantly even though six figure earners, you know that so called one percent. They’re only supporting four or five charities at least according to this study. Again, you gotta throughout two of them right away because one is their church and one is their school. If you’re thinking, hey people are generous. We can go out and get new donors. Not so fast. People are not really spreading their dollars among many different organizations. Usually a household sort of finds that maybe one or two cause that’s really important to them and they only gift within that. So, it’s really important that you retain the people you already have because if you don’t convince them that they should keep giving they will go elsewhere. They won’t give in addition to your organization to another organization like you. They will move their dollars from you to another charity within that cause pipe, so just be one there.

We talk about gift volume. This is dollar amounts, so it sort of adds fuel to the fire. There’s not a lot of dollars among those gift being spread around, even among those top figure, those six figure incomes. We’re looking at an average of maybe $500 to at most $5,000 each average American household. If I haven’t convinced you to stop that leaking bucket and keep on with these people that have already demonstrated that they like and believe in you. Focus on them first. I think this is they key to your 2018 plan. Take care of those donors you already have. It’s much more cost effective and it’s a lot more fun as you’re gonna see in most of my future slides here.

So why do we have these retention rates? This is something that a lot of people are looking at. Not only are we studying what the retention rates are, but we are also looking at what are the causes. Why are we at 23% on the first time side? Why only 46% on the average side? What’s going on here? What are the causes of these gift retention rates?

There is one man here Adrian Sargeant who is absolutely obsessed with this questions. He’s basically devoted his entire life to figuring it out. He was previously a chair at the IU School of Philanthropy down in Bloomington, Indiana. He’s now at the Rogare Think Tank over at the UK. He’s kind of the godfather of donor retention. He’s been studying donor retention way before the FEP project was. He was looking at this as far back as 2001. He wrote a really awesome study that you can get on the URL here and read it on your own time later on.

Basically trying to figure out why do donors stop supporting organizations that they previously donated to. What he did was, he reached out to 10 very large national non-profits here in the United States. He wanted to get a smaller group of non-profits that had a very large list of donors, specifically a large list of lax donors. People that have been giving to these ten organizations, but had stopped. What he did was he surveyed those lax donors. He got enough of them to respond to him to make a statistically relevant study, which we are all very appreciative of.

It was one simple question. Why did you stop giving to this non-profit. You had once given to them, maybe given multiple times and suddenly you stopped. Why did you stop giving? These are the reasons that he got from the lax donors for why they stopped donating. I think they’re very illuminating, possibly a little depressing, but maybe most importantly fixable in a lot of cases.

Here are the reasons and I know they don’t add up to 100% because people could give multiple reasons and they sort of combine different categories of reasons here. These were sort of the high level results. Five percent thought that that organization didn’t need them anymore so they stopped giving. Again, totally fixable right. A clear case for support, a compelling act. All those things I think could have kept those people on the polls.

Eight percent wanted to know how their donation was spent and they did not receive that information from the non-profit. So donors really see their donation as kind of an investment, right. They wanna know what is their return on that investment. What are you doing with those dollars. What is coming out of the programs and the work that you’re doing. Donors wanna know. They wanna know those success stories and case studies. You can give those to donors and that [inaudible 00:23:37] keep them around.

Nine percent had no memory of supporting, which is always kind of always the saddest one for me. I think that has a lot to do with the fact that 13% percent of those donors never got thanked. If you thank a donor they’re probably gonna remember that they donated to you, right. So there’s 22% of lax donors that’s totally fixable. We need to thank donors, right. You may be surprised at how many organizations I encountered that don’t thank donors that don’t meet a certain threshold maybe by gift amount or gift channel or gift frequency. We need to thank all donors. We need to thank them all very, very well if we’re gonna look at the data for that in a minute.

15% had passed away, which I think is enlightening for a lot of reasons. Maybe it tells us about perhaps the average age of our donors and that maybe we should do a better job at funding our data and making sure that we’re not sending direct mail to people that have passed away and offending surviving relative or making them feel bad. This is a reality that we face especially with the average age of a donor.

18% percent received poor service or communications. There are a lot of ways that the study impacts that one. Maybe we were asking for a gift very soon after a gift had been made. Maybe the acknowledgement and the appeal literally crossed paths in the mail. Not honoring specific communication preferences. You know calling donors who didn’t wanna be called. There are a lot of things there, but again mostly pretty fixable.

36% thought other organizations were more deserving. That’s kind of similar to that top on, that five percent one. This goes back to a clear case for support. A compelling act, you know really stressing the need in a tangible way. And, a little over half said they no longer afford their gift. So, rather than downgrading they stopped giving completely. I think we as fundraisers don’t really do a good job of encouraging downgrades. We accept complete lapses. You know $50 to zero dollars. I don’t think we do a good job at saying we definitely understand. $50, we would still really appreciate $10 a year and this is what your donation can do. Would you give what you have? Having that kind of relationship and rapport and communication line with a donor I think is really important in mitigating some of those financial difficulties I think donors go through.

That’s why donors stop leaving. Why do donors stay? This is a study that was done more recently. It was done back in 2011. So about 10 years after Adrian survey there. Basically the donor voice wants to know what is the other side of the point? Why did donors keep giving? So what they did was slightly different methodology. They reached out to a larger number of non-profits because they needed a larger [inaudible 00:26:31] donors, which is rare as you’ve seen.

They reached out to about 250 non-profits and found 1,200 what they considered very loyal donors. They had been giving for multiply years in a row. They had been giving multiple gifts in a year. These are kind of the cream of the crop owners. These 250 non-profits had done something very well with these donors. Basically, DonorVoice wanted to figure out what was it. What did they do right that keeps you giving over so many years. What they did rather than asking them one open ended question. They gave them a list of 32 reasons why a donor may keep giving to any non-profit. They asked those loyal donors to rank them by order of importance.

I’m gonna share with you the top seven reasons out of the 32 that was given for a couple of reasons. One, if you do these seven things you will retain donors. There is not ifs, ands, or buts. There’s not secret formula. There’s magical pixie dust at work here. Pretty straight forward things. If you do them, you will retain donors. They are not easy things to do, not necessarily, but they are kind of simple things to do. The other reason I like to show this study is, it almost exactly mirrors the study that was done by Adrian Sargeant almost 10 years prior and completely different data sets. It is literally the exact side of the points. Donors haven’t really changed their mentality of why they give and why they don’t give. It really comes back to these simple seven things.

Number one, the most answered reason, the most given reason was that the donor thinks that you produce outcome. You do something with the donation that are given. If you are an animal shelter, you are sheltering animals and you are getting them adopted and you are lowering the euthanasia rate in the area that you’re operating in. Not only are you doing those things, but you are communicating them to the donor. Donors get addicted to those impact stories. That has been shown in multiple studies not just this one to be the number one thing that keeps donors around. When you communicate to them that they the donor are doing great things through their donation. We can honestly stop there. If you do that number one thing, you will be ahead of 99% of non-profits out there. I’m gonna give you six more that’ll help you as well.

Number two, and two was kind of surprising to the researchers because it’s not as intuitive as perhaps the other reasons. You’ll see here. The donor wants to know what you’re gonna be sending them and why, basically. They expect what you send them. So you’re not appealing for a gift. I know I said this example already. You’re not appealing for a gift right after a gift is made. You’re not inviting someone to an event that is not anywhere near where they live or maybe it’s inappropriate for them to attend. You’re not asking for a major gift from maybe a lower level donor and you’re not asking for a small gift from someone who’s been making very large gifts to you. Your donor communication kind of makes that and they’re expected. You’re telling donors hey you’re on the newsletter list. You’re gonna get a monthly newsletter. Hey thanks for your gift, we’re gonna send you a thank you letter in the mail. Or be on the look out for this. Or hey, check your email inbox or spam inbox for this. Are we telling the donor what comes next in that communication cadence has been found to be very powerful in terms of increasing engagement and retention.

Number three probably will not surprise you other than maybe it wasn’t higher on the list, but donors wanna be thanked. I mean no kidding. I don’t think you needed to attend this webinar to understand that, but what they did found is that not just did they like to be thanked, but they liked to be thanked quickly. So timely I kind of use interchangeably with fast and quickly. Donors don’t wanna wait months and weeks for a thank you letter. They want to get a thank you letter, a handwritten note, a phone call, an email as soon as possible. The faster you can get a thank you, the higher the retention rates. There’s some other studies I’m gonna show you in a little while to collaborate that, but get those thank yous out as fast as you can. That will help retention.

Donor receives opportunities to make their opinions known. So not only do you have an open line of communication with the donor, but you are soliciting feedback actively from them. You’re asking them questions. Taking them out to coffee. Sending them surveys, really powerful. Donors you can kind of stroke their egos a little bit by asking their opinions and how they feel about you. If you can maybe enact some of their requests. That also increases retention above and beyond just soliciting. Donor surveys really powerful, you know if someone donates to you for the first time, send them a new donor survey. Not only will you learn a lot about them, but they’re gonna feel good that you care enough about how they feel about things. It will help engagement there.

Five’s kind of similar to number one. They feel like they’re part of an important cause. Not just that you are an important cause, but that they are a part of it. They are not just this silent atm off in the corner. They’re really right there in the fight with you. So donor centricity. Using lots of you words, really putting the spotlight on the donor. It’s the donor doing all these awesome things, producing all these outcomes. It’s not necessarily just the organization, kind of putting that spotlight on the donors [inaudible 00:31:47]. Appreciation, you know when you thank the donors, when you’re putting them in the center of the story, they’re gonna feel appreciated obviously.

And seven again, similar number one, how are the dollars being used? Who is being helped. This is a story of a kid who went through our program and now he’s the first kid in his family to graduate from college and it’s all because of you the donor. Thank you for your gift. That’s that donor centricity, outcomes, success stories that’s really it. Thanking people, going overboard with appreciation. How the gifts are going to be used. Soliciting that feedback and prioritizing monthly giving I think is really the key here to retention.

Print out this list. Print out those studies. Put them all over your office. Give them to your board members. That you care about retention and you wanna change how your organization operates and be more focused on retention rather than acquisition. This is how you do it.

What I wanna do for the rest of time I have remaining is give you some practical ideas of how you can actually do these things to start. I think the firs thing is we wanna avoid buckets. I actually kind of hate the leaky bucket metaphor for donor retention because if we put all of our donors in one bucket and treat them all the same, rather than looking at what kind of donor they are, how they give, what they give, how often they have given. Of course, they are gonna leak out of the bucket if we keep taking this you know one size fits all approach to donor communication. Sending the same thank you letter to all donors. Sending the same newsletter. Sending the same appeal. Of course they are gonna leak out. Right? We have to segment our donor list. If there is one thing you can start doing today to improve retention it’s to look at the different types of donors you have in your database rather than just the one database of names. We’re gonna do the same thing for all those donors.

So what do I mean by segmentation? Probably won’t be surprised that I like to focus on gift size and gift frequency because those are where we see the differences in donor retention rates. If at a minimum you should have four thank you letters, four appeals, four newsletters for new and repeat donors and new and repeat donors who give more than your average gift size and who give at or less than your average gift size. It just makes sense right? You may wanna do something different for a new donor, a first time donor who gives you a really large gift out of the blue then maybe you would for a repeat donor who gives you $20 a year without fail. Not that you should treat them any less special, but we should definitely do different things for them.

A new donor I would try and get on the phone or a get a new person to visit with to learn about them and see why they gave and why they gave such a big gift to your organization out of the blue because you want them to give again. Right? You want to get to know those people. Repeat donors you probably already know a little bit about, but what can we do for them to make sure that they always feel appreciated. What kind of different stories can we tell those people? Can we get them involved in other ways? Maybe a repeat donor who gives $10 a year, maybe they have financial limitations, but they still really like you. They give to you every year.

It’s not really important how much they give, but how often they give. Maybe they can be a volunteer. Maybe they can be on a committee or perhaps they can be a board member right. So how you sort of approach the communication should be kind of driven by how often that person has given, if they’ve given more than once. What’s the gift size. You could even do this by channel. You could break this up by online givers versus offline givers. Maybe even drill down deeper into that, maybe direct mail versus events versus any other in person channel you have. The sky really is the limit here, but if you do anything at least separate new donors versus repeat donors. New donors should really get that star treatment, a phone call, a handwritten note. Get to know those people. Repeat donors make sure they feel very valued, get them engaged in other ways especially if they have a lower average gift size.

How you appeal to those people should be different. A new donor, someone who has only given once, what you ask from them in that second gift should be very tailored to the type of donor that they are, maybe what you’ve learned about them. Maybe you learned from a new donor that they had a grandmother who had Alzheimer’s and you’re an adult day center and you’re helping people who are caregivers. You could tell those specific types of stories that are very applicable to that specific donor versus a repeat donor who’s been giving. We don’t wanna send the same story to that person. I think that’s what happens more often with repeat donors that we don’t have a very big library of case studies or success stories. We’re kind of saying the same things to them over and over again and not having fresh content. So think about separating or segmenting your communications at a minimum with at least four segments.

What also I find is really important, especially on the first time donor side, is having a documented communications plan for how you are going to send and what you are going to send to those donors after they make their very first gift because your goal for that first time donor is to get that second gift. You need to knock their socks off in terms of appreciation, impact story, all that stewardship stuff to get that second gift. One way to hold yourself accountable is to create a documented plan that only first time donors [inaudible 00:37:31].

So often we have one communication plan and all donors get everything on it, regardless whether they’re first time versus repeat, how much they’ve given. We’ve gotta avoid that one size fits all sort of communication plan. I like this one from Lori Jacobwith. She has this available for download on her website for free. You can see they are really kind of laying it pretty thick with the appreciation. So a board member calls to the donor within three days of their gift. That’s pretty timely, plus it’s a phone call so maybe you can stand out amongst kind of the boring snail mail letters that go out. It can also be an opportunity to get to know the donor because maybe if you catch them and not leave a voicemail and have a conversation with them and get to know them.

The board members are specifically good because they’re usually maybe a big shot in the community perhaps and they’re a volunteer. They’re not paid. I think to  the donor it really stands out that hey a board member, a non paid volunteer is taking the time to thank me. What a board member can do is communicate to the donor maybe why they serve on the board and why they believe in the non-profit organization. I love using board members for their phone calls, especially way better than trying to get them to fundraise for you. It can be a really good way to maybe get them enticed to fundraise later on.

So the list continues, a thank you letter within a week, get them monthly newsletter. A tour invitation within six weeks, I think is really critically. If you have an organization that it makes sense to have a tour. If you’re an office building and you do advocacy online, that may not be as enticing. It may be an animal shelter or school of course, [inaudible 00:39:06], but I’d love some sort of personal in person interaction with a first time donor, especially if they can come to your facility and see your mission in action. They’re gonna get hooked because they can see the impact they’re having firsthand, and again you can learn about them.

Then probably the most important thing about this when you’re gonna make that second ask. If you do a really good job on those first four or five touches it’s okay to ask for a gift within three months because you’ve stewarded them. You’ve learned about them. You can tailor that ask to the type of donor they are or why they care about your cause. It’s okay to ask back quickly, 90 days, no problem. I think you can be that aggressive as long as you did a really good job thanking that donor. Then of course the monthly newsletter cadence continues. A survey, to me I probably would have bumped that survey up before the second gift. That’s okay, surveys are great somewhere within that first year.

This is a communication plan from an agency up in Canada. They kind of take a different approach to it. Rather than what you’re sending and the format and who, they kind of layer on what feelings they want the donor to have. So you can sort of put these two things on top of each other, but you really got to know what kind of emotions you want the donor to feel in each of those communication types, not just what is being sent as well, so think about that.

This is a real communications plan from a Goodwill Chapter down in central Texas. You can see they lay it on really thick. It’s kind of an unfair example because Goodwill has a lot of volunteers to help out with it, but all you listening I think could probably do that rather than have volunteers do events, maybe in addition have them come in and help them thank donors. Help write thank you letters and make phone calls and send out cards and things like that. What I really like about this plan is they don’t care about gift amount. I know that that might not be feasible for all organizations. You may have a high gift volume and you need to segment by gift amount. But, I like that they treat a $1 donor the same as they do a $1,000 donor. I actually think that, that’s pretty forward thinking. They kind of look at my segments and said, whatever Steven we don’t care about gift amount, we think all donors deserve a lot of appreciation regardless of how much they give. Some people push back on me on that. I like it, but common sense prevails. If you can only write one handwritten note for whatever reason and you have a $5,000 donor and $5 donor I think you know which is probably the best one to do, but if bandwidth isn’t an issue I wouldn’t definitely consider not caring about gift amount necessarily.

Just some other data points here just to kind of back up the timeliness. The faster you get the gift out the better. That has been shown to increase retention rate and more about the board members calling. Penelope Burke found that if a member called a new donor it not only increased retention but it increased their next gift size. It increased the dollar amount of that second gift. I love getting board members involved in this process, especially if they are hesitant to do fundraising for you. Why not get them all together, carve out a half hour of your board meeting, and just call donors? Call donors from that week or that month and say thank you. It can be definitely really powerful and voicemails are okay as well.

Don’t send receipts. For these online donations, we can steward online donors just as well as we can offline donors. So often our online giving programs default to that kind of boring receipt, transaction receipt and then kind of these very transactional, maybe even scary looking thing. Automatic receipts can look like real thank yous. I’ve got tons of examples in here. I would copy all these examples. I would go into your online giving software and see if you can customize the automatic receipts into something that looks less like this and more like this, or maybe like this. It shows real photos and tells stories, and looks like it came from a real person and not just a robot or from PayPal.

That first mail communication should really knock people’s socks off and I really like it when these acknowledgment pieces reiterate that you know what kind of donor they are. I made a first gift to a private school here in Indy and I love the piece I got back from them, “Thank you for your first gift”. So they recognized that I am a first time donor and they kind of ingeniously tied it the first experiences of their students. You can see in the piece they have a first day and first field trip, so they’re making this immediate connection between my first gift and the first experiences of the people that my donation went towards.

I love that and I love the invitation for a tour right there on that first thank you. Brilliant, I know that was not a random decision based on maybe some of the studies I showed to you earlier. Get to know those first time donors, let them know that you know they are a first time donor. That’s gonna help with retention as well. Tell stories, send people back to your website to watch videos, or to read stories. Anything you can do to tie it to someone at your organization, someone or something that your organization helps. That’s gonna help and you need to put those things in those initial gift acknowledgements, whether they’re automated emails, non automated emails, thank you letters, welcome packets like this.

Tell those stories and get people back to your website. Video is great, I love this one from Charity Water, it includes a survey. This was my first gift after becoming a monthly donor and I love here in the top right hand corner that they are soliciting a survey from me. It’s a super simple survey, “Why did you decide to become a donor? Why do you care about clean water? What do you expect out of us?” I think one question was even, “Was it easy to donate?” They’re actually asking my feedback on the actual donation process. Surveys are great, if it’s a first time donor or someone joining a monthly giving program for the first time, survey those people. It’s gonna stroke their ego for one, and you may also get some really interesting information back from the donor that will guide your efforts.

Charity Water does a great job with this. If you want an idea of what I’m talking about, donate five bucks to Charity Water. They send you all this great stuff. They send you monthly reports on the actual water well project that your donation went to and they say, “Hey, we dumped a foundation today. Hey, we laid the first cement. Hey, we just drew water for the first time and here’s a villager who now has fresh water and doesn’t have to walk six miles a day.” They tell you those stories and they don’t care about gift amounts. You can see, this was $10, and I know that water well was way more expensive than $10 but they treat me like I was the sole funder of it. It really makes me feel special.

Snail mail needs to stand out. Handwritten notes, unexpected snail mail is really good. I know I made a big case for donors wanting to expect things but this is something I get from an organization here in Indy. We’re a monthly donor, my wife and I, and they send me these quirky holiday cards. They don’t send me a Christmas card or a Thanksgiving card, they send me these like B-list holidays, like Flag Day and the 4th of July. The 4th of July is very patriotic, don’t think I’m disparaging the 4th of July, but kind of off the beaten path. I get an Easter card, I get a St. Patrick’s Day card. They know that not a lot of non-profits are sending things out because they’re maybe focusing on the major holidays or year-end, and it just kind of puts a smile on our face. “Thanks for being a part of our monthly giving program,” handwritten note. Things stand out.

We’ve gotten mad libs as thank yous before, which is the thank you letter we got for supporting an ASP chapter. It was really creative, definitely stood out over the typical kind of thank you letter you get that look very templated. It has maybe one signature. If you’re gonna send letters through the mail. Make them stand out.

Surveys, I talked about this a little before. This is some information for you, it’s a list of potential survey questions you can ask. Don’t ask 23 questions, ask two or three questions, but you’re gonna find a lot of ideas there that you can pull from. First time donors, if you don’t do any other surveys besides a first time survey, make it that one. That to me is the most important one, for sure. Why do they do? What’s their connection to the cause? What do you expect out of us? I think those are really good questions to consider for sure.

Keep donors happy. Again, just kind of a no dust kind of thing. If you get complaints from donors, that is an engagement signal. You shouldn’t necessarily beat yourself up over that. Donors who complain are retained more than donors who do not complain and it’s because they’re engaged, they care about you. If you can resolve those complaints or at least mitigate them, you’ve got a friend for life. I’m not saying this because you need to do every sort of weird idea a donor has, turning over your entire organization for one weird request, but at least tell people, “Hey we understand your feedback. We definitely appreciate it. We’re not going to do what you suggested, this is why, but please keep telling us how you feel, those things are just as good.”

Don’t be afraid to respond to those complaints because those people really care about you. They’re not just people you should be annoyed with. You are never gonna get 100% retention, it’s not gonna happen. It’s not achievable. It’s not something we should, again, agonize over. They are people who want to give one gift. There are also people that pass way. We saw that from Adrian Sargeant survey that donors are gonna stop giving because they pass away. We can invest in data services to maybe clean our lists. We can reach out to surviving partners, and spouses, and relatives, and express our condolences.

We’ve had a lot of organizations, a lot of Bloomerang customers do just that, and that surviving relative ends up continuing that support on behalf of that person just because the organization said, “We’re so sorry for your loss”, and recognized that it happened. Donors move, some ridiculous amount of people, I can’t remember the exact percentage but it’s high, of Americans move every year. They may have just lost touch with you, so do an NCOA once a year. It’s like $400, it’ll tell you if people on your list have a new address and you can save direct mail costs. You can get more of your appeal seen. It’s definitely worth the investment.

If people haven’t given in two years, you need to isolate them and do something special with them. A donor survey, a lapsed donor survey. “Hey, did we make you mad? What’s going on? Did something in your life change?” Don’t call them lapsed donors, please just don’t do that. You don’t want them to know that you think they’re lapsed donors. They may not consider themselves lapsed, but do something different with those donors, especially if they haven’t given in two years.

Gifts in kind, or gifts in memoriam, excuse me, and peer to peer donors have the lowest donor retention rate. Those are like single digit donor rates, so this is another channel you can segment out. Communicate to peer to peer donors in one way that you do not communicate to other types of donors. What I like to do for most of these donor types is bring in a fundraiser. There was probably some third party between you and the donor that facilitated that gift. Someone running a 5K, or someone who had a relative pass away and they chose you for those memorial gifts, bring that person in. Maybe have the gift acknowledgement come from them. Have that appeal come from them because what has happened so often is the non-profit just swoops in and acts like that donors best friend when they may even have no connection to the non-profit even though they gave to you.

Bringing in that third party I think can be really useful for those donors. Definitely do something different than other donor types there because they are a very specific type of donor that gave for a certain reason.

That’s it. Segment your donors, don’t communicate to all of them in the same way. Make sure you’re donor centric. Make sure your putting that spotlight on the donor. Lots of you words, making them the hero of the story. Have a documented communications plan for each of those segments you create, especially first time donors. That’s my homework for you, is to create that written communication plan. What are we gonna send a first time donor in that first 12 months of their giving? A thank you letter within a certain number of day, a phone call, a survey, a tour invitation if that makes sense. When are we gonna ask for the second gift? Because what you want to avoid is someone gives on January 11th, and oops, we have an appeal going out the door on the 12th, and they’re gonna get that and it’s way too soon for them to get that. We need to avoid those sort of stream swap thing, a pass in the bale.

The second gift is everything. The first gift, you’re really just get started. I would not get excited about that first gift until you get the second gift because then your retention rates are in a much better space. If you’re not convinced, I use a gardening metaphor. You can either plant a garden and cultivate it, or you can plant a garden, let it die, and have to go back and replace it every few months. The choice is yours. I know when I would decide, I think it’s much more fun to water your plants, and to fertilize them, and to check the soil levels, and keep the weeds away and the rodents away. Take care of your garden. Don’t just go and try to replace the garden every year or every six months.

That is my spiel for you. If you liked this presentation, I got a ton of resources around donor retention on the Bloomerang website. I got thank you letter templates for both email and letters in the mail. It has all the bits and pieces I recommend. I got eBooks galore, I got a brand new one about gift acknowledgement specially. I also got one on how to segment your data, it goes way more in depth than I did today over the last hour. I got one specifically about what you can do for online donors. So improving those automatic receipts, and donation pages, and things like that. I know we’ve just gotten past online giving season so you might want to check that out maybe in the fall. Check out those eBooks, get them, maybe that segmentation one would be the best place to start.

That’s it for me. Sarah, you want to do some questions in the time we’ve got remaining?

Sarah Durham: A couple questions have already come in but while people are typing in additional questions, I want to hog the mic for a second and ask you a question about capacity.

I know one of the things that we hear from the organizations we help with donor communications, is who’s gonna do this work? Is it the development staff? Is it the communications team? How do they collaborate? The type of segmentation you talked about, so many of the things you talked about why donors leave and why they stay are dependent on effective communication, so whose turn is that? The organizations that you see doing it well, are there any tips you can share with the people, with all of us today, on how they do it so that it’s not overwhelming?

Steven Shattuck: Yeah, it’s a lot of work and it’s overwhelming. I think a lot of people maybe get a little discouraged because they say, “Oh my gosh, I don’t know if I can possibly do this. I’m a one woman shop, one man shop, there’s two of us, we can’t do it.” The first thing I say is, “It’s okay, any improvement you can make is better than doing nothing.” I know I’ve said this a couple times before but if you can’t focus on anything other than first time donors, that’s where I would do the bulk of the work.

But to answer your question, Sarah, about the organizations I’ve seen that are really successful, they not only have buy-in from the board but the board is involved. The board is making thank you calls. The board is writing handwritten notes and to me it’s the ideal person because they’re a volunteer, they care about you or else they wouldn’t be a board member and they wouldn’t come to your meetings every month and do all the things you ask of them. Hopefully they do, do those things, but they can tell a story that I think is a little bit more enticing than maybe a staff member who is paid. I know the staff members care as much about the organizations as maybe anyone, but if you’re worried about, “Gosh, I’m trying to run this animal shelter. I’m trying to keep the lights on.” It’s hard to call donors and write handwritten notes. Well, look to board members and look to volunteers.

Maybe if you can isolate who your loyal donors are, maybe getting them involved. Obviously they love you and they believe in your cause, why not get them involved in the giving process? I think the biggest thing is we don’t think to bring in volunteers to help with this. As fundraisers, we always try to … There’s a little bit of martyr’s complex where we need to everything. There’s too much we can possibly do, I’m overwhelmed. Don’t be afraid to delegate some of these things to board members and volunteers. Obviously, you want to put some strict guidelines in place and equip them with scripts and what you want to communicate in those, but my short answer to the question is don’t feel that you need to be the person that is the only person doing these things.

Sarah Durham: I love what you said earlier too about it might be easier to get your board members engaged in the thanking as opposed to asking. That seems like low hanging fruit. The kind of thing that really anybody on your development team or communications team might be able to start to automate. So when a gift comes in, whether it comes in the mail or online, there’s a person on staff whose responsible for triaging out to board members. We got a couple questions that have come in. I want to ask you really quickly and because we’re almost out of time, I also just want to say for people who are gonna have to bolt very quickly, we will be sending out a copy of both Steven’s chat and the recording. It usually takes us a couple days to get that together, so you will definitely get that.

I’m also getting a lot of chats in about how wonderful this has been and how helpful it’s been. I’m really glad you guys all found it as valuable as I do. Steven, here’s a question from Alana, she says, “Is it enough to vary the call outs in direct mail letters rather than writing entirely different appeals, or in order to sufficiently differentiate between donor types?” I think what she’s saying is how different do those communications really need to be?

Steven Shattuck: Not terribly different to start, especially if you have limited bandwidth. You don’t have to create two or three completely different things. I think maybe if you have a little space in there for a story, maybe that impact story is what you swap out. I think another thing you can do is maybe in the introduction, leaving space to customize what type of donor they are. So, “Hey Steven, thanks for your first gift.” Or, “Hey Steven, thanks for giving again in 2018.” Just to kind of illustrate to the donor that you know what kind of donor they are. Again, a little bit of an ego stroking thing. Then maybe a different story, then at the end maybe a slightly different call to action because you may want different donors to do different things after reading your letter or your email. Maybe a repeat donor gives a little bit, pushing them to volunteer opportunities versus a new donor, you’re pushing them to a survey, versus maybe another type of donor you want them to watch a more in depth story.

I think probably that intro, the story, and then the call to action at the end is what should be customized. Probably the meat of the letter, I don’t think, has to be terribly different. I would give special consideration to people who’ve been giving multiple years. Make sure they’re not getting the same letter because I think people will start to notice that. Even if you’re only changing a couple things, that may not be enough for those long time donors who have received letters from you in the past.