Why The FEP Donor Retention Data Is So

Vital To Every Fundraiser

Erik J. Daubert, MBA, ACFREChair, Growth in Giving InitiativeAffiliated Scholar, Center on Nonprofits and PhilanthropyThe Urban Institute

Jay B. Love CEO and Co-Founder of Bloomerang

• 30 Years of Technology Leadership• Former Founder & CEO of eTapestry• AFP Board Member• AFP Ethics Committee Chairman• Center on Philanthropy at IU Board Member

Your Presenters

What is the Growth in Giving Initiative?

• The Growth in Giving Initiative is a set of charitable giving research projects involving many nonprofit and for profit partners.

• Our goal is to understand and challenge the United States philanthropic sector to provide more resources to the nonprofit organizations working to answer the challenge of serving our nation. (2 percent of the Gross Domestic Product (GDP) for the last 50 years)

• Many Projects:– Fundraising Fitness Test, Fundraising Analytics, Research,

Convening, Database, Indices, Training and Education, FEP Canada, and More!

What is the Fundraising Effectiveness Project?

• Our work has been most known to date by the Fundraising Effectiveness Project or FEP, which helps nonprofit organizations measure and compare their annual growth in contributions by gains and losses in giving.

• Nonprofits increase net growth in giving by maximizing their gains and minimizing their losses. (Improving Retention)

How Do Many of Us Look at Fundraising?

• Did We Make Our Goal of $X?• Is Our Board Satisfied?• Does Our Budget Continue?• Is Our Mission Fulfilled (Enough?!)?• Is My CEO Content (Enough!?)• Other?

Let’s Look at a Few Key Areas of the Fundraising Effectiveness Project…

• Donor Retention• Gift Retention• Upgrades• Downgrades• Lapsed Donors

And Let’s Talk About What You Can Do About Some of These…

• Donor Retention• Gift Retention• Upgrades

Donor Retention

• Donor Retention is defined as the donors you KEEP versus the donors that you lose each year or set of years.

• You want to keep your donors…not lose them.• The FEP measures how well you do at this

effort!

Important to Understand that All Donors Are Not Created Equal…

• Who can You Not Afford To Lose?• Which Donors Can You Most Effect Positively?• What Strategies Can You Devise for:– MAJOR Donors– Midsize but VERY IMPORTANT donors– Smaller Donor Groups

What Strategies Can I Use in My Development Efforts?

• Define Which Donors You Can Not Afford To Lose. (Example - $5,000 and up Donors)– Develop Real and Personal Relationships – Regular and PERSONAL contact

• Understand Which Area You Can Have the Most Impact with from Your Efforts. (It might be $2,500 - $4,999 or it just might be another giving level…)– Determine who has the most potential– Look at how you can connect with them in meaningful ways

(Personal solicitation, group gatherings, personalized mailings, one visit per year, special invitation events, etc.)

Gift Retention

• Gift Retention is defined as the GIFTS you KEEP versus the GIFTS that you lose each year or set of years.

• You want to keep your GIFTS…not lose them.• The FEP measures how well you do at this

effort!

Important to Understand that All Gifts Are Not Created Equal…

• Which GIFTS Can You Not Afford To Lose?• Which Areas of GIFT RANGE Can You Most

Effect Positively?• What strategies can you devise for:– MAJOR GIFTS– Midsize but VERY IMPORTANT GIFTS– Smaller GIFT RANGE Groups

What Strategies Can I Use in My Development Efforts?

• Define Which GIFTS You Can Not Afford To Lose. (Example - $5,000 and up Gifts)– Develop strategies that personalize and help the donor to understand

the value of these gifts– Regular and PERSONAL contact

• Understand the True Meaning of “Stewardship” (“Thank and Report Back – without ASKING”)

• Develop a stewardship plan that is specific and appropriate for each GIFT level…Where there is POTENTIAL – Do MORE!

• The “10% Rule”

UPGRADES

• Upgrades are defined as the GIFTS you GROW BIGGER each year or set of years.

• You want to UPGRADE your GIFTS when you can!

• The FEP measures how well you do at this effort!

Important to Understand that All Donors Are Not Created Equal…

• Which GIFTS can You UPGRADE?• Which Areas of GIFT RANGE can you most

effect positively if you can UPGRADE them?• What strategies can you devise for:– UPGRADING MAJOR GIFTS– UPGRADING Midsize but VERY IMPORTANT GIFTS– UPGRADING Smaller GIFT RANGE Groups

What Strategies Can I Use in My Development Efforts?

• What are You Doing to Bring Donors CLOSER to YOUR ORGANIZATION?

• Define Which Gifts You Are Most Likely to UPGRADE(Example - $250-$499 Donors)– Understand that Not All Donors Will UPGRADE. For Annual

Campaigns, about 20% is a good metric for number of gifts…– Develop a Real Strategy that Can Work for Your Budget and

Organization• Who Can Help You? (Volunteers, board, committees, family, etc.)• Design a plan that makes your dreams (and those of your donor)

become reality!

Here is the address for downloading the newest “Fundraising Fitness Test” for use in measuring your own performance!

We hope that you will use these tools to improve your fundraising efforts!

www.afpnet.org/fep

Donor Retention Rate was 39%

Donor Attrition was 61%!

2012 FEP Data on Donor Retention Rate

Yes, your eyes read correctly:More than SIX out of every TEN

Donors from the previous year did NOT donate at all the next year!

“A 10% improvement in retention can double the LIFETIME value of your donor database!”

– Dr. Adrian Sargeant, Bloomerang Chief Scientist

Donor Retention Best Practices »

“The total net contribution that a customer/donor generates during his/her lifetime in your database.”

Defining Lifetime Value »

# of Donors in Current 12 Months(from the previous years pool)

divided by

# of Donors in Previous 12 Months

Calculating Your Retention Rate »

Retention Begins With The Thank You! Above Average Gift Amount

At or Below Average Gift Amount

5 Acknowledgment Principles(Drastically Improve First Year Donor Retention)

• 48 Hour Rule • Fully Map a Track for Each Segment • Be Different Than the Rest (Handwritten!)• State Exactly What the Monies will Fund • Call or See in Person as Often as Possible

Questions?

Erik J. Daubert, MBA, ACFREChair, Growth in Giving Initiative

Affiliated Scholar, Center on Nonprofits and PhilanthropyThe Urban Institute

daubert.erik@gmail.com

Next Webinar:

1/17 - 3pm ESTClaire AxelradSocial Media

https://bloomerang.co/resources/webinars