“As fundraisers, we have come to accept a lapsed donor as an end result,” says L. Gregg Carlson, chair of the Giving USA Foundation (www.givinginstitute.org/giving-usa) in Chicago and president of Carlson Fund Raising LLC (www.carlson-fundraising.com) in Henderson, Nevada. Instead, he argues, “organizations need to be asking themselves, ‘Where is our money coming from, and how do we find more like them?’ In other words, ‘What does my donor look like?'”
Carlson says that fundraisers can improve their chances of identifying loyal supporters by making a point of reaching out to them through their preferred communication channels, and by being creative and flexible in how they ask donors to consider giving. While these methods are time- and labor-intensive, the payoff in the long run is likely to more than offset the investment. Carlson says that in his experience, roughly half of donors are willing to consider sustained giving. However, says Carlson, “Many nonprofits are not graduating their donors to higher end methodologies. By not graduating them from direct mail to phone to face-to-face, they’re putting their donor base at risk.”
Laura Goodwin, Vice President of The Osborne Group (www.theosbornegroup.com) in Mount Kisco, New York, agrees. “Our clients who have a multi-channel approach to engagement really do better,” she says. However, those channels have to be used for a broad range of messages of interest to the donors. “If you’re only doing soliciting on your multiple channels, you will probably seem grabby,” she points out. Therefore, nonprofits should seek feedback from donors to ensure that the channels facilitate two-way involvement and encourage them to feel like they are part of a community.
Goodwin identifies three building blocks for turning what she describes as a “messy process” into an effective workflow for cultivating and upgrading individual donors:
- A table of gifts
- A clear vision of the goals and objectives
- Accountability and outcomes measurements
“I’m always surprised by how few people are using a simple name-by-name table of gifts,” Goodwin says. “There’s no better way to identify the need, the gap, and who we’re going to talk to.” The table of gifts must also be accompanied by a clear statement of what these gifts will enable the organization to accomplish in the community. “When we arm fundraisers with this knowledge, it becomes a lot easier to identify donors who might be motivated to help us achieve those goals. It helps answer the question, ‘What donor am I looking for?'”
Along with a clear vision of the objectives, fundraisers must also be able to present outcomes to donors. “If we’re not sure what we’re doing in the world, if we’re only focused on telling people news about the organization, then what does that add up to?” Goodwin asks rhetorically. “We need to demonstrate accountability for the changes that we’ve accomplished and that we’re on the way to accomplishing.”
Veteran fundraisers know that while such high-touch approaches are more effective at retaining donors, they are time-intensive; that’s why they have traditionally been limited to major-gift donors. Thanks to today’s sophisticated donor tracking software, though, proven high-touch techniques now require less time and effort, and as a result they can be broadened out to a larger segment of the donor pool regardless of their giving level.
Jay Love, co-founder and CEO of Indianapolis-based Bloomerang (www.bloomerang.co), finds it useful to invoke the Pareto Principle — the idea that a majority of a given outcome is the result of the efforts of minority of a given population — when explaining why it makes sense to use high-touch methods to retain loyal donors instead of acquiring new ones. “One of our clients had 16,000 records in their database,” recalls Love. “We asked them how many of those people had made a gift in the last three years, and their answer was 2,000.”
In addition, Love says, the client’s last direct-mail campaign targeting the lapsed donors netted just two gifts. “Why would they still be spending money trying to get the other 14,000?” asks Love. “They would be so far ahead if they would just concentrate on their two thousand confirmed supporters and let those people be the connectors who bring in others.”
Love recalls the rule of thumb from the world of direct mail that says a donor who informs you about a change of address is 10 times more likely to make a major or legacy gift to your organization. “When that happens, you should be calling them and asking what your organization can do for them,” says Love. “Instead, it’s usually treated as a purely administrative function and not passed up the line.”
This post was adapted from “Semper Fidelis: How Strategically Stewarding Your Loyal Donors Will Help Your Organization Succeed With the Ongoing Shifts in Charitable Giving,” by Paul Lagasse, Advancing Philanthropy, Winter 2014 (reprinted with permission) You can read the whole article here.