Focusing on Donor Behavior: Better Donor Retention & Alumni

Engagement

Heather Albrecht, CFRE Vice-President and Consultant

Does work feel like this?

Or maybe work feels like this?

Donor Behavior and Annual Giving Efforts… HHHHmmm…

Can you look at your program and ask…• Are you a revenue driven program or a strategy

driven program?• Are you using the wrong items to determined your

programs success?• Does the adage “This is how we have always done it”

prevail most days?

Where are you Today?• Understanding your universe of prospects

– audit constituent groups (alumni, parents, friends, members)

– understand living vs. solicitable (callable) vs. do not solicit vs. lost

– evaluate the gaps in counts; strategies to close those gaps

Where you at Today?• Improving the integrity of your prospect data

– more investment in research (NCOA, Telephone Append, intermediate levels of research like Alumni Finder and wireless ID)

– careful consideration of Do Not Solicit list– invite prospects at every turn to share updated

information

What does this mean?

Have a dual focus strategy – NOT just revenue

– NOT just participationAnnual giving programs are about changing people’s

behavior and getting them to think philanthropically about your organization. Gifts are an outcome of

having done this successfully.

What’s your “Miracle”?• What do you have in place for attrition and retention

of your existing donors?• Most organizations focus on acquiring new donors.

They depend (and sometimes just expect) the donor to given again the following year.

The “Leaky Bucket”

Participation rates & Donor Retention• Participation rates for both public and private

continue to remain flat year over year– Calling as many if not 100% of recent donors in

the fall, including parents allows programs to make refusal calls in spring decreasing the leaky bucket

• The private schools we work with see an average participation rate (overall) seven percentage points higher than their public counterparts

Average Gifts & Donor Retention• Average gifts continue to increase year over year 3-5%

– Loyal donors are willing to give twice every year and are asked for an upgrade twice a year

– More programs creating $1,000+ leadership societies and marketing to them

– Programs releasing prospects that DO’s will not reach in the spring to phonathon to make sure a connection is made

Rule of Thumb

Since it costs more to acquire a new donor than to retain an existing one, focus on retention by keeping

the donors you have.

When this is done - revenue AND donor count can increase.

Avoid the leaky bucket!

Traditional Giving

Pyramid

Annual Fund Donors

Leadership/Semi–Major Donors

Major Gift Donors

Planned Gifts and Bequests

“New” Giving Pyramid

Let the Stats do the Talking…

Why Donor Retention & Loyalty?• Focus on Donor Loyalty

– Loyalty = Retention=Loyalty– Plug the “Leaky Bucket”

• Improve fundraising results– Create Benchmarking standards & Best Practices– More donors = More revenue

• Shows program performance and efficiency– Assists with creating and justify budgets– Identify challenges and opportunities

Why Donor Retention & Loyalty?

• Track donor trends and giving habits– Popular giving levels– Donor attrition– Use data and numbers for decisions and NOT

anecdotal information (AMEN!)• Develop a long term strategy NOT short term

An Example – 2010 vs 2011

Trend in Dollars Raised = + 9.4% ($12,898)• $136,978 dollars in 2010• $149,876 dollars in 2011

Trend in Donors = -4% ( 39 donors)• 952 donors in 2010 (21%)• 913 donors in 2011 (%)

GOAL: Increased Donor Retention

* Adding 75 prospects to the file each year (i.e. graduation, transfers, events, etc.)

  Current Year 1 Year 2 Year 3Current Total Base 4,750  

Current Solicitable Base 4,316 4,391 4,466 4,541Current Participation 21% 24% 27% 30%# Donors 913 1,054 1,206 1,362

Increase in donors  15% 14% 13%100% Renewal Rate   141 152 156

Increase in donors  35% 34% 33%80% Renewal Rate   323 363 398

Increase in donors  55% 54% 53%60% Renewal Rate   506 574 639

Year 1 – Move by 3%

Year 2 – Move another 3%

Year 3 – Move last 3%

How do I apply this?DON’T… • Group all of your LYBUNTS/Renewals donors • Group all of your SYBUNTS/Lapsed donors • Over segment your populations

How do I apply this?DO…• Change your paradigms – TEST- TEST-TEST!• Hold your giving efforts to higher standards• Use the data you have and track the results• Create your own “miracle”

Incorporating Scripts and Letters• Words that focus on participation…

“Many other alumni like yourself are the reason CCS exists. Your gift to the CCS Annual Fund supports two of our most critical initiatives: undergraduate student scholarships and the Community Arts Partnerships program. By making your first gift to CCS, you will make the next generation’s education possible.”

Incorporating Scripts and Letters• Intro’s and Rapport for Calls

– “Good evening, Mr. Johnson. I am calling tonight to thank you so much for your past giving to the College for Creative Studies and to talk about our current campaign. I can see here that you have been involved with us for the past 6 years. We can’t thank you enough for your support!”

• Determine when to ask for an upgrade or not• Starting Ask levels

Guide to Donor Retention & Suggestions for Segmentation

Participation Segment Script Ask65+% Consecutive 4+ Years/LYBUNT 4+/ Upgrade Leadership

55-60% LYBUNT 2-3/Renewals 2-3 Upgrade Same and Leadership42% New LYBUNT, Reactivited, SYBUNT 1 yrRetention Same

20-30% SYBUNT 2-3/Lapsed 2-3 Acquire Re-establish Gift Level18% SYBUNT 4+/Long Lapsed Acquire Establish Gift Level

15-18% Non-Donor w/ Gift Acquire Establish Gift Level

University of XYZDonor Retention ReportFiscal Year 2004 - Year to date

Seg Code Description FY03 Pool

FY04 Donor Count Rate

FY04 Total Cash

FY04 Average

Gift/Donor FY02 Pool FY03 Donor

Count RateFY03 Total

Cash

FY03 Average

Gift/Donor

Renewal Segment Renewal Renewal

DL002 DL - New 3,277 1,298 39.61% $185,327 $143 3,745 1,435 38.32% $190,529 $133

DL001 DL - Reactivation 4,510 2,678 59.38% $299,087 $112 5,879 3,387 57.61% $434,203 $128

DL003 DL - 2 Cons Yrs 4,433 2,987 67.38% $444,699 $149 4,760 3,199 67.21% $500,449 $156

DL004 DL - 3 Cons Yrs 2,939 2,145 72.98% $402,094 $187 2,339 1,654 70.71% $261,797 $158

DL005 DL - 4 Cons Yrs 1,596 1,287 80.64% $185,389 $144 1,496 1,167 78.01% $223,779 $192

DL006 DL - 5+ Cons Yrs 4,611 4,103 88.98% $1,484,083 $362 4,468 3,867 86.55% $1,489,948 $385

21,366 14,498 67.86% $3,000,679 $207 22,687 14,709 64.83% $3,100,705 $211

Reactivation Segment Reactivation Reactivation

DL007 DL - 1 Year Lapsed 8,945 4,961 55.46% $354,762 $72 7,076 3,867 54.65% $234,280 $61

DL008 DL - 2 Year Lapsed 5,467 1,398 25.57% $61,940 $44 7,702 1,865 24.21% $77,104 $41

DL009 DL - 3 Year Lapsed 6,887 702 10.19% $51,264 $73 6,667 668 10.02% $91,607 $137

DL010 DL - 4 Year Lapsed 6,197 543 8.76% $20,985 $39 5,626 413 7.34% $36,835 $89

DL011 DL - 5+ Lapsed 68,070 3,021 4.44% $108,834 $36 64,354 2,590 4.02% $106,346 $41

95,566 10,625 11.12% $597,785 $56 91,425 9,403 10.28% $546,172 $58

Acquisition Segment Acquisition Acquisition

No DL*** 157,690 2,690 1.71% $486,535 $181 155,058 2,498 1.61% $329,169 $132

Other

Matching Gifts $274,035 $214,187

Total 274,622 27,813 10.13% $4,359,035 $157 269,170 26,610 9.89% $4,190,233 $157

Fiscal Year 2004 YTD Performance Fiscal Year 2003 YTD Performance

Donor Retention Report – Example

University of XYZDonor Retention Report

Seg Code Description FY03 Pool

FY04 Donor Count Rate

FY04 Total Cash

FY04 Average

Gift/Donor

Renewal Segment Renewal

DL002 DL - New 3,277 1,298 39.61% $185,327 $143

DL001 DL - Reactivation 4,510 2,678 59.38% $299,087 $112

DL003 DL - 2 Cons Yrs 4,433 2,987 67.38% $444,699 $149

DL004 DL - 3 Cons Yrs 2,939 2,145 72.98% $402,094 $187

DL005 DL - 4 Cons Yrs 1,596 1,287 80.64% $185,389 $144

DL006 DL - 5+ Cons Yrs 4,611 4,103 88.98% $1,484,083 $362

21,366 14,498 67.86% $3,000,679 $207

Reactivation Segment Reactivation

DL007 DL - 1 Year Lapsed 8,945 4,961 55.46% $354,762 $72

DL008 DL - 2 Year Lapsed 5,467 1,398 25.57% $61,940 $44

DL009 DL - 3 Year Lapsed 6,887 702 10.19% $51,264 $73

DL010 DL - 4 Year Lapsed 6,197 543 8.76% $20,985 $39

DL011 DL - 5+ Lapsed 68,070 3,021 4.44% $108,834 $36

95,566 10,625 11.12% $597,785 $56

Acquisition Segment Acquisition

No DL*** 157,690 2,690 1.71% $486,535 $181Other

Matching Gifts $274,035

Total 274,622 27,813 10.13% $4,359,035 $157

Fiscal Year 2004 YTD PerformanceClose Up Example

And if all else fails…

Questions?

Thanks for your time!

Contact Information:

Heather Albrecht, CFRE Heather Albrecht, CFRE

heather.albrecht@ruffalocody.com(800)756-7483 ext. 2983

65 Kirkwood North Road SWCedar Rapids, IA 52404www.ruffalocody.com