“Stewardship” is just another word for Donor Retention
Julie Whelan Capell |
Contributed by Julie Whelan Capell, MWA Associate
Were your year-end appeal results much better than expected last year?
First, let’s take a moment to celebrate your success. Your hard work, and the work of your board members and staff, paid off! Look at all those increased gifts, and all the new donors!
And if you want this year’s appeal to do even better, you need to start working on donor retention right now.
Why donor retention? Because, as the adage goes, it costs more to acquire a new customer than to retain your current customers. So you need to focus on the people who have already donated to your organization. These folks are saying they believe in the good work you are doing and they want to be a part of it.
How do you retain your current donors? Through good stewardship, which basically means building relationships with them.
Focusing your donor retention work
If resources were limitless, you would have a donor retention plan for all your donors, but most of us don’t live in that world. I was recently at a board meeting where the board wanted to focus on stewardship of their lapsed donors. But that’s not where you’ll get the most bang for your buck.
According to the AFP Fundraising Effectiveness Project, the recapture rate for lapsed donors is only 4%. That means once people stop giving to you, it is very unlikely they will ever give to you again. So you’re better off focusing on the people who gave to you most recently.
The two categories of donors that you should spend the most time stewarding are:
- Multi-year, offline-only donors – Typically retained at 60% (Blackbaud 2021)
- First-year, offline-only donor – Typically retained at 29% (Blackbaud 2021)
You can see it’s much harder to keep first-time donors than donors who have given to you in multiple years. I see this as an opportunity. Plan to target your first-time donors with some serious retention strategies, no matter how small their donation. Since most nonprofits don’t do much with small, first-time donors, your organization will stand out from the crowd and those donors will be more likely to donate the next time you ask.
Of course you should also pay attention to your multi-year donors and your largest donors, because any fall in retention rates in these groups can have a big effect on the overall amount you are able to raise.
By the way, if you’re not already doing it, here’s a website that will help you calculate your donor retention rates https://bbinstitute1.wpengine.com/explorer/retention-and-attrition/
Now that you know who you are targeting …
Donor stewardship ideas you can try
- Make sure you are thanking people within 24 hours, or at the most one week of receiving their gift. Note: the perfunctory email sent out by your donor management software is NOT GOOD ENOUGH. You need to also send a much more personal thank you. This can be a hand-written note or a text or a phone call. Focus on the impact the gift has made, not the amount! The more personalized information you can put into the message, the better. With the sophistication of today’s databases, you should have lots of information on the number of years they’ve been giving, whether they’ve attended events or classes, etc. (To those of you still using Excel spreadsheets to track donors, this is why you need to upgrade to a cloud-based database.)
- Segment your donors by the program they are most interested in, and send them periodic updates about that program. This is a great place to involve your program staff. Ask them to snap photos of their programs to send to donors. Having participants in those programs send thank you cards is another very effective stewardship strategy.
- Send 30-second videos of a person participating in a program to the donor with the message “I thought of you today when I saw this young person … I knew you would be so happy to know how your gift is making a difference!” You can capture these videos spontaneously throughout the year. It only takes minutes to shoot the video and send it out (make sure you have permission to share the person’s image). Imagine the smiles on your donors’ faces when they get these videos! Priceless.
- Send out quick behind-the-scenes texts while you are preparing for a big event or the start of a program. Example: “Hi Cindy! It’s Julie from XYZ Organization. We’re getting ready to take our first group out on the new trail you helped fund and I was thinking of you. It’s been crazy getting ready for this day, but now we have 20 people arriving in an hour and the trail looks great! Thanks so much for being a part of making today possible! P.S. When can I get you to come out for a private guided walk on the trail? Let me know!”
What are some stewardship strategies you are going to implement this year to increase your donor retention rates?
- The Association of Fundraising Professionals (AFP) and the Center on Nonprofits and Philanthropy at the Urban Institute together established and maintain the Fundraising Effectiveness Project.