Well if recent industry reports can be trusted, not much. Organizations are retaining just 41% of their donors year over year meaning all that hard work often results in one donation before their relationship with the organization ends. Dr. Adrian Sargent, Chief Scientist at Bloomerang, and one of the foremost researchers around donor retention, is famous for saying:
Improving Donor Retention by Just 10% Can Double the Lifetime Value of your Donor Database!
You can see how he comes to that conclusion here, but here's a summary: retained donors not only give year over year, but often increase their donation levels as they become more engaged with the organization. And when donors stick around, it not only leads to increased revenue in the long run, but also to a source of potential volunteers, fundraisers, brand advocates, board members and legacy givers.
All that to say, keeping donors happy year over year is crucial to your organization. And the good news is, there are some pretty simple things you can do to increase donor retention and lifetime value. But first…
A Mini Fundraising Nerd Break
If you are unfamiliar with donor retention and lifetime value calculations, here’s a handy little graphic that explains them (Bloomerang has some great stuff digging deeper into both donor retention and lifetime value).
There are two ways to increase lifetime value:
- Increase the amount people give to you yearly
- Increase the amount of time they are a donor
Focusing on #2 (keeping them longer) is a donor retention strategy and is where you can get big results fairly simply.
How to (Easily) Increase Donor Retention
According to donor communications guru Penelope Burke, in her landmark book Donor Centered Fundraising, 93% of donors said three things would impact them in terms of giving again to an organization in the future:
- Prompt and personalized gift acknowledgement
- Confirmation that funds will be used as originally indicated in the solicitation
- Measurable results on donors’ last gift before they are asked for another one.
And in her most recent survey, 67% of donors said they would definitely or probably give again if a charity thanked them promptly and reported their progress in measurable terms. Based on this research we will focus on how you can thank and report to your donors to increase donor retention.
1. Thanking Your Donors
Your thank you to a donor is one of the most meaningful and important communications, and can often be the make or break for the second gift.
Burk has done extensive research around what makes a good thank you, and while most of her research comes from Thank You letters, much of her list of 20 things that make a thank you letter superior applies:
- The letter is a real letter, not a pre-printed card.
- It is personally addressed.
- It has a personal salutation (no “dear donor” or “dear friend”).
- It is personally signed.
- It is personally signed by someone from the highest ranks of the organization.
- It makes specific reference to the intended use of funds.
- It indicates approximately when the donor will receive an update on the program being funded.
- It includes the name and phone number of a staff person whom the donor can contact at any time or an invitation to contact the writer directly.
- It does not ask for another gift.
- It does not ask the donor to do anything (like complete an enclosed survey, for example.)
- It acknowledges the donor’s past giving, where applicable.
- It contains no spelling or grammatical errors.
- It has a positive tone as opposed to a hand wringing one.
- It communicates the excitement, gratitude and inner warmth of the writer.
- It grabs the reader’s attention in the opening sentence.
- It speaks directly to the donor.
- It does not continue to “sell”.
- It is concise – no more than two short paragraphs long.
- It is received by the donor promptly.
- Plus, in some circumstances, the letter is handwritten.
The most important common themes among these 20 items are that your thank you should be:
- Prompt... in terms of its delivery
- Specific... to what the donor is giving to
- Personal... to that specific donor
- Meaningful... in honouring their donation
Below is a recent thank you I got from Dress for Success after giving to a campaign of theirs on #GivingTuesday. While it took over a month to arrive after I gave, it did a great job of being personal, specific and, while it planted the seeds for some next steps, it did honour my donation.
On top of the letter, I received prompt social thanks. After giving, I shared about it on Twitter and they thanked me, on Twitter, the same day. It's a great example of fundraising and thanking basics being applied to 'new school' channels like Twitter.
To use a dating analogy, the thank you is like making a great first impression when meeting your date. How you report back on impact and how the donation was used is where you earn that second date.
This is one of the reasons I'm a big fan of very tangible projects when fundraising. They are great for asking because it makes donors feel like they are making a greater impact, but they also set your organization up well to report back on impact and 'close the loop'.
Reports don't have to be big long PDFs covering all the details of the past 3/6/12 months, but should quickly cover:
- What they gave to (project or campaign)
- Some information on what's happened since
- What comes next
I recently received an awesome reporting email from charity: water which did just that (below). They also had a link to a 90-second video from Cambodia showing the work being done, adding a visual and dynamic element to the report.
Notice the highlighted "you's" and "your's" in the email keeping it focused on me, the donor, and my impact through charity: water (not their impact because of my contribution).
And in this part of the email, I get a sense of what has happened, where things are at and what I can expect. They also show some excitement and energy in the copy and give me a contact person. You may not be able to do live videos or detailed reporting, but recapping the donation, sharing what's happened and what will happen next should be doable. And it should get you that second date.
With blogging and social media, there are more opportunities to do 'micro-reporting' with smaller bits of information that is delivered more frequently on various channels like YouTube, Twitter, Facebook and Instagram.
With a great, prompt and personal thank you, your organization can make a good first impression. With a specific, simple and relevant report/update you can build more trust and loyalty. From there, it makes getting the next donation much easier and much more likely. This should help boost your donor retention, in turn lifetime value and help lead to additional opportunities for monthly giving, volunteers and champions.