strategies for renewing first time donor support

Strategies for

Renewing First

Time Donor

Support

Cynthia J. ArmourCertified FundRaising Executive

Elderstone.ca

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WHAT IS CANADAHELPS?

• A public charitable foundation and registered charity

• Through CanadaHelps.org, anyone can donate to any

registered Canadian charity online

• We have facilitated over $390 million in charitable

donations online since our launch in 2000

• 14,500 charities use us to collect donations and fundraise

online

• Over 850,000 Canadians have donated through

CanadaHelps

• For donors, CanadaHelps is a one-stop-shop for giving. For

charities, CanadaHelps is an online fundraising solution

that is affordable, easy and secure

WELCOME TO GIVING MADE SIMPLE!

Cynthia J. Armour, CFREElderstone Resource Development

www.elderstone.ca 705-799-0636

Canada Helps Webinar – March 5, 2014

http://www.elderstone.ca/

Making a case for donor relations in the quest to renew first-time supporters

Introducing key terms you need to know

Defining the value of relationship building

Identifying steps to a strong donor relations program

Providing names and sources for more information

© Cynthia J. Armour, CFRE www.elderstone.ca 705-799-0636 5

Your charity has not acquired a donor until they make their second or third gift

Disaster relief often equals one-time donations

“December Donors”

First-time donor super credit benefits donors who‟ve never supported charities before


Every $100 gained for 2011 was matched by $100 in losses through attrition

Every 100 donors gained in 2011, 107 we lost through attrition

Organizations raising $100,000 or less lost $110 for every $100 they raised


Slight improvements from the previous year

Every $100 gained in 2012 was offset by $96 in losses through gift attrition

Every 100 donors gained in 2012 was offset by 105 lost donors through attrition


BUT – organizations raising under $100,000 had an average net loss of -13.5% (which means $113.50 was lost for every $100 raised)

The greatest losses in gift dollars came from lapsed new gifts, particularly in the organizations with lowest and highest growth in giving ratios (the net of gains in giving minus losses in giving).


“It usually costs less to retain and motivate an existing donor than to attract a new one For most organizations – and especially those that are sustaining losses or achieving only modest net gains in gifts and donors – taking positive steps to reduce gift and donor losses is the least expensive strategy for increasing net fundraising gains.”

Source: AFP 2012 Fundraising Effectiveness Project


Direct mail acquisition $1.25 to $1.50 per $1.00 raised

Direct mail renewal $0.20 to $0.25 per $1.00 raised

Benefit/Special events $0.50 per $1.00 raised (gross to net)

Membership associations $0.20 to $0.30 per $1.00 raised

Donor clubs $0.20 to $0.30 per $1.00 raised

Planned Giving $0.20 to $0.30 per $1.00 raised

Corporations $0.20 per $1.00 raised

Foundations $0.20 per $1.00 raised

Volunteer-led solicitations $0.10 to $0.20 per $1.00 raised

Special projects $0.10 to $0.20 per $1.00 raised

Capital campaigns $0.10 to $0.20 per $1.00 raised

© Cynthia J. Armour, CFRE www.elderstone.ca - 705-799-

0636 11

Donor Acquisition

Donor Attrition

Donor Conversion (and we‟re not talking

about organ-transplants)

Donor Lifetime Value

Donor Loyalty

Donor Relations


Donor Renewal

Donor Retention

Donor Response Rates

Donor Segmentation

Lapsed Donors

Multi-channel Giving, Stewardship


At the heart of fundraising is the art of relationship building – the mutual creation of that intersection between the organization‟s mission and the donor‟s philanthropic vision. Strong relationships with donors don‟t just happen; they require careful attention not only to donors themselves but also to fundraising fundamentals that are grounded in ethical practice.


Canadians continue to place great importance on the information charities provide to the public.

98% think it is important (very or somewhat) for charities to provide information on how they use donations

98% want information about the programs and services the charities deliver

97% want information about charities‟ fundraising costs and

96% want information about the impact of charities‟ work on Canadians

Source: Talking About Charities 2008 - Canadians‟ Opinions On Charities And Issues Affecting Charities, The Muttart Foundation


Canadians continue to give charities low ratings for the degree to which they report on how donations are used, the impact of programs and charities‟ fundraising costs

Of significance, there have been significant drops in the trust levels of some types of charities since the study was last conducted in 2008. International development agencies dropped 9% from the previous study, while churches dropped 7% and environmental charities 5%.


Studies indicate that finding new donors and dollars is on the decline

There are fewer new donors

Retention of first-year and multi-year donors is falling

Recruiting new donors can cost up to 10 times more than retaining existing ones!

Source: Mutual Appreciation – Advancing Philanthropy – Jan/Feb 2009


“A 10% increase in donor retention can increase the lifetime value of the donor database by up to 200 percent. When people stay around, they do things like upgrade their gifts, contribute to galas and even volunteer. All those things, you can put a dollar value on.”

Source: Adrian Sargeant, Ph.D., Hartsook Chair in Fundraising and Professor of Philanthropic Studies at Indiana University‟s Center on Philanthropy


Satisfaction

Trust

Commitment

Each little interaction builds loyalty


“The best prospective donor is the donor who has supported your organization in the past.”

Edith Falk, Campbell & Campbell

Linkage, Ability and Interest = a warm prospect vs. a cold suspect


Location is to real estate as relationship is to philanthropy.

Source: Effective Donor Relations – Janet L Hedrick


Acknowledgement – the process of saying thank you for the gift

Recognition – the process of publicly recognizing the gift

Stewardship – the process of using the gift as the donor intended and communicating with the donor about the use of the gift



Effective donor relations is an organizational philosophy, advocated by decision-makers and practiced by everyone.

Measurable results can only be provided if the CEO and the Board have a strategic plan in place, with time-limited and specific objectives against which results can be measured.


Communications – meaningful, 2-way

Frequency and face-to-face interaction increases as the relationship grows

Involvement or engagement – in the life of the organization, treated as a member of the family, donor will talk about the organization using the term we rather than you

Source: Janet L. Hedrick


Gift acceptance and management

Acknowledgement

Donor recognition and appreciation

Stewardship – accountability and reporting

Ask again and repeat the process


A positive emotion or attitude

Meaningful, thoughtful and individualized

Unified strategy for the donor



93% would definitely or probably give again

64% would give more

74% would continue to give indefinitely

70% of donors would increase the overall value of their philanthropy if charities were more effective at acknowledging their gifts and communicating results

Source: Donor-Centered Fundraising – Penelope Burk


For already acquired donors, the things that influence their decision to give or not give again happen in the space between solicitations, not at the point of asking for a gift. That is why so many donors say that, once acquired, meaningful acknowledgement and measurable information become the ask; solicitation is merely the convenient point in time to offer the already-determined „yes‟ or „no‟.


Customer-service focus means entire staff, board and volunteers are part of the donor relations team! (= Culture of Philanthropy)

Prompt thank you and receipting

Ensures gifts are used for intended purpose

Funds are tracked - accountability in action


Implies a burden of trust

Timely and appropriate reporting to donors on use of funds

Involves and engages donor in the charity‟s work

Builds understanding of the need and provides solutions for donor to help

Recognition reflects the gift-size


Benefits are not costly or extravagant

Shared responsibility between charity and donor

A functional database and trained staff who can mine the information

The board complies with the Income Tax Actand reports to CRA to maintain charitable status


Start with the board creating, approving and adopting a stewardship policy

Form a stewardship planning task force involving board members, other volunteers, a development or administrative staff member, and some donors

Analyze the donor base where gifts cluster and establish four or five preliminary (test) giving recognition levels

Source: Beyond Fundraising, Kay Sprinkel Grace


People will give more to a cause as they become more involved and committed

Staff will be more effective based on their involvement and commitment


Fund development committee conducts donor analysis (recommended twice a year):

◦ How many donors do you have?

◦ What levels do they give?

◦ How frequently do they donate?

◦ Who are they?


The board is expected to be involved in donor relations

The board needs to approve the donor relations plan

The board adopts a donor relations policy including who signs thank you letters and makes thank you phone calls to donors, budgets, etc.


Comprehensive database is essential to track:

◦ Number of repeat donors and WHO they are

◦ Number and value of increased gifts and WHO made them

◦ Event attendance

◦ First-time donors

◦ Newly engaged donors


Create a budget for donor relations that includes, postage, printing and donor-focused events (which may include one-to-one meeting/meal with a major gift prospect)

Ensure stewardship activities are in line with the budget, amount of the gift and image of the agency

Determine what (if any) kind of involvement your top donors want


Use current donors to convey the agency‟s message to potential donors

Determine how to tie donor relations to the organization‟s mission

Focus on the intangible benefits that turn donors into investors

Continue to maintain stewardship with long-term and major donors even if they lapse


Establish relationships between donors and the stewardship staff

Keep all donors on the database unless they ask to be removed

Create giving levels with (cost-effective) benefits


Consider using the following mediums for effective outreach:

◦ Marketing and print materials

◦ Mailings (annual fund)

◦ Phone calls (personal phone calls from board members)

◦ Interim progress report (donor communications)


Begin by recruiting the “right” donors

Thank promptly

Welcome them

Invite more information

Demonstrate how their gift makes a difference


BEFORE YOU

Request a personalized renewal within six months of their first gift

The timeliness, relevance and quality of the first gift acknowledgement is a vital driver to donor conversion and ultimate retention.


My Charity Village Fundraising Q & A archives http://www.charityvillage.com (search Cynthia Armour under Articles)

Tony Poderis: Building Donor Loyalty -http://www.raise-funds.com/012703forum.html

Association of Donor Relations Professionals (www.adrp.net)

Public Broadcasting Major Giving Initiative -http://majorgivingnow.org/index.html


http://www.charityvillage.com/cv/archive/afundqa.html

http://www.raise-funds.com/012703forum.html



http://www.adrp.net/

http://majorgivingnow.org/index.html

http://www.muttart.org/surveys - Muttart Foundation -Talking About Charities

http://www.imaginecanada.ca/files/www/en/supercredit/first-

time_donors_super_credit_explained.pdf - First Time Donor Super Credit explained

2013 AFP – Fundraising Effectiveness Survey Report http://www.afpnet.org/files/ContentDocuments/FEP2013FinalReport.pdf


http://www.muttart.org/surveys

http://www.imaginecanada.ca/files/www/en/supercredit/first-time_donors_super_credit_explained.pdf








Sample Stewardship Policies –

http://www.externalaffairs.uga.edu/policies/nodes/complete/335

http://majorgivingnow.org/downloads/pdf/KCET_Stewardship.pdf

http://majorgivingnow.org/downloads/pdf/UU_Stewardship.pdf

http://www.arrowleadership.org/alpages/invest/investment-reports/stewardship.shtml

Sample Thank You Script

http://majorgivingnow.org/downloads/pdf/OPB_Thank_Member_Script.pdf


















Grace, Kay Sprinkel: Beyond Fundraising (John Wiley & Sons, Inc. 1997)

Burk, Penelope: Thanks! A Guide to Donor-Centred Fundraising(Burk & Associates Ltd. 2000)

Rosso Henry A. and associates: Achieving Excellence in Fundraising, 3rd Edition (Jossey –Bass 2010)

Sargeant, Adrian and Jay, Elaine: Building Donor Loyalty: The Fundraiser‟s Guide to Increasing Lifetime Value (Jossey-Bass 2004)

Lysakowski ACFRE, Linda: The Development Plan (John Wiley & Sons, Inc. 2007)

Ciconte, Barbara L. and Jacob, Jeanne G.: Fundraising Basics: A Complete Guide, 3rd Edition (Jones and Bartlett Publishers 2009)

Ahern, Tom and Joyaux ACFRE, Simone: Keep Your Donors (John Wiley & Sons, Inc. 2008)

Burnett, Ken: Relationship Fundraising (Jossey-Bass 2002)


Cynthia J. Armour, CFRE

◦ Elderstone Resource DevelopmentStrategic Leadership and ManagementCavan, Ontario

(705) [email protected]


mailto:[email protected]

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