interview withDOnOr retentiOn eXPertADriAn SArGeAnt inSiDe!

JAnUArY | FeBrUArY 2015

Dear Reader,

January is generally a time of renewal. And whether or not you’re a fan of New

Year’s resolutions, we have a challenge for you. You’re not one to back down from

a challenge, are you? Here it is:

Let’s get better at keeping donors around.

Sure, we might never be able to attain donor retention perfection, but that’s not

going to stop us from trying. And this issue is designed to help you get as close

to perfection as possible.

Inside, you’ll find interviews from both sides of the spectrum—somebody who

has studied fundraising extensively (page 3 with Adrian Sargeant) and an

organization that is knocking it out of the park (Lincoln Food Bank on page 6).

It certainly doesn’t have to be as scary as it sounds. Plus, we’re here to help. Start

with the simple tips on page 8 and go from there.

Are you ready to take on the challenge? Use this magazine as your guide. And

if you have more questions, don’t hesitate to reach out. Send us an email at

info@nonprofithub.org.

Now get out there and get to work.

Lyndsey HrabikManaging Editor

2

—Lincoln Arneal

The biggest issue with donor retention is that most people don’t even realize it’s an issue.

At least, so says Adrian Sargeant, the Robert F. Hartsook professor of fundraising at the University of Plymouth Business School.

Sargeant has conducted various academic studies on fundraising. As a result, he says he has a negative outlook on the way organizations currently view donor retention because it isn’t a priority.

“If you focus on donors who give just once, it’s a sad position to be in as an organization,” Sargeant said.

However, if organizations are willing to put in the effort there will be progress. Here are three areas

Boards often lack the understanding of the three most prominent drivers of retention: satisfaction, commitment and trust.

to focus on to keep more donors coming back to help your cause.

It StartS at the topIn order for donor retention to be a priority, it

needs to start with the board of directors.

Sargeant said boards often lack the understanding of the three most prominent drivers of retention: satisfaction, commitment and trust. They also fail to invest in the necessary resources for

education and staff training.

He said boards push for the best ROI, but often can get caught up chasing new donors to improve those numbers. Sargeant said the problem wasn’t just the board, but also who the board was selecting to lead the fundraising efforts.

3

YOUR

Donor RetentionNEEDS WORK

ADmittiNg thE PROblEm:

“A lot of the boards are made up of people with business backgrounds,” Sargeant said. “They wouldn’t hire someone for a marketing job without a marketing background, but that happens a lot with fundraising and that’s frustrating.”

Be More BrItIShA native of the United Kingdom, Sargeant has studied fundraising from both sides of the pond. The statistics about donor retention have been fairly static for the past decade, but are still sobering.

In the United States, more than 70 percent of people who make a first-time donation don’t make a second one. However, in the UK, that percentage is around 50 percent. While he hasn’t done any data-based studies, Sargeant has several hypotheses for the difference.

First, Sargeant said UK organizations were more responsible for their communication

“Too often the message is, ‘Look at how great we are and look at all this great stuff we are doing,’”

than their American counterparts. More often Americans leave a majority of their communication to outside agencies and have less control over the message. The communication needs to be personalized, segmented and mission-focused.

The second difference Sargeant pointed out was that organizations in Britain tend to solicit more frequently. Sargeant said North

American organizations focus their efforts on year-end giving.

“By the time they ask again the next year, the donor doesn’t know why

they are being asked,” Sargeant said.

CoMMunICate wIth a purpoSeIn order to really understand why an organization isn’t retaining first-time donors, nonprofits need to study their relationship with donors. By studying the patterns, organizations can understand when the attrition is occurring and fix it.

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Sargeant offered several other tips to increase donor retention:

• Make sure the copy sent to donors is sending the right message. “Too often the message is,

‘Look at how great we are and look at all this great stuff we are doing,’” he said. “Organizations with great donor retention have a seismic shift and do an 180 with their message and say, ‘Look at the difference you are making.’”

• Create a welcoming communication cycle for all first-time donors. The most common place to lose donors is between the first and second donation. Find a few methods that work and start regular mailing/communication after an initial gift. “A welcome telephone call is really smart,” Sargeant said. “It seems to make a positive difference.”

• Talk to donors through multiple channels. The more ways you interact with donors

increases the retention rate. For example, if they donate online, find a way to communicate

with them through the mail. “Get them to participate in two-way communication any way possible, whether that is on the phone or internet,” Sargeant said. “If you do, they will

have more loyalty.”

Adding one new approach or adding a task won’t make all donors stick around. But the goal isn’t keeping 100 percent of donors. Sargeant’s studies have proved that a 10 percent improvement in attrition can yield a 200 percent increase inprojected long-term value.

“There is no magic bullet, but it is a combination of satisfaction, commitment and trust,” Sargeant said.

“There is no magic bullet, but it is a combination of satisfaction, commitment and trust.”

5

The Org an i z aT i On :

Behind the Scenes :

22 full-time employees

Donors Who Came Back :

Around 50 to 60 percent

The i r Vis ion :

“nourishing our communities to end hunger.”

What They Value :

collAborAtion, compAssion, diversity,

educAtion And responsibility.

6

“We place such a heavy emphasis on gratitude and

being thankful for all of our donors. We try to do a

really good job of sending out our thank-you letters

quickly after we receive a donation,” Mabry said.

“We try to make calls when we can. We invite folks

to come out to the food bank.”

For bigger gifts, Mabry said the Food Bank of

Lincoln makes sure to send more personalized

notes, some phone calls or a handwritten note

from their executive director.

When it comes to spending money on retention,

Mabry estimated that

the Food Bank of Lincoln

spends between $10,000

and $20,000 per year, which

includes retention software

and the staff time and thank-

you processes.

he said that the return from those tactics is worth

the price.

“You have to keep donors coming back,” Mabry

said. “Those are the ones who are going to be your

best candidates for major gifts if they’re regular

supporters.”

and Mabry acknowledged one of the most

important aspects for all organizations to take heed.

“Then [after the donation] you just have to stay in

touch with donors to make sure that they know

what you’re doing and that you’re appreciative of

what they’re doing,” he said.

M i g h T Y r e T e n T i O n r aT e sa s M aL L O r g an i z aT i O n WiTh

When you’re an organization based in Lincoln, neb.,

and you have regular donors contributing from places

like California, you must be doing something right.

and the Food Bank of Lincoln, a small-time

organization with big-time retention rates, has

donors coming in from across the country.

Development Director John Mabry humbly attributes

their retention rates to their cause.

“People need to eat,” he said. “it’s a basic human need

and people understand that, unlike many. . . nonprofits

who have a harder time

telling their story.”

But upon further inspection,

it’s more than just their

mission. The Food Bank of

Lincoln seems to be doing

all the right things.

For instance, they know that it’s important to

understand why donors give in the first place. That’s

why they asked that California donor why he would

donate to a Lincoln-based organization, even after he

no longer lived in the area.

The donor’s response? he noticed the Food Bank of

Lincoln’s good Charity navigator rating, and also felt

like the most was being done with his fundraising

dollars with their organization.

Beyond that, Mabry said that every donation to the

food bank (no matter how small) receives recognition.

That’s why they asked that California

donor why he would donate to a

Lincoln-based organization, even

after he no longer lived in the area.

7

—Randy Hawthorne

t h e i r ( n o t - s o ) s e c r e t s

Are you overwhelmed by all of this retention talk? Small steps eventually add up to one giant leap. So let’s start small. Try these

quick tips to get your donors on track to come back for more.

retention Made simple

Find out why they’re leaving.You can’t keep every single donor. But you can find out why they leave.

how? Just ask! it’s that simple.

Thank every single donor.Trust us. You do have time. Because the return will be worth it.

8

—Lyndsey Hrabik

Keep at it.it’s not going to happen overnight.

But these small steps can help you build up donor retention over time.

Be personal.skip the generic thank-yous. Donors can sense sincerity from a mile away.

Try a handwritten note or a phone call. small personal touches equal a big return.

Now fix it.now that you know why donors left, fix it if you can.

Maybe not for that specific donor. But for donors of the future.

9

10

7 o u t o f 1 0 d o n o rs o n ly d o n at e o n c e .Let's win them back.

looking for more of the

nuts and bolts of donor

retention?

We have the tools

you need online.

visit nonprofithub.org/magazine for these ArticlesAnd even more to guide your donor retention strAtegy.

15 game-changing presentations.

1 day chock-full of thought-provoking

ideas.

211 N. 14th Street

Lincoln, NE 68508

Meet the people behind our

national conference happening in

Lincoln, Neb. on April 10.

Save the date. Mark your calendar for April 10, 2015.Visit lincoln.nonprofithub.org/cause-camp for more details.

Attend in-personor reserve your

spot online—we’re live streaming!