The 2018 FEP report has both silver lining and cloud. Now what?  I’d love to hear your thoughts in the comments; here are a few of mine.

We must rebuild our base.  Increasing retention post-first gift is a major part of this and we should pat ourselves on the back (not too hard) for this.

But there are only two ways to grow: growing the value of donors or the number of them.  Recently, we’ve been better at the former, with larger donors comprising a large part of our portfolio (FEP data show that five out of every six donor dollars is from $1000+ donors).

The trick is most major donors did not start as major donors.  They may have given a larger-than-average gift upon acquisition, but their value has built over time.

If we don’t have a base of new and returning donors, we won’t get that opportunity to build value.

The warning signs are there – decreasing numbers of new donors and decreasing reactivation rates of lapsed donors.  I’ll also wager that average cost to acquire is increasing.  Either that, or we are being silly in not bringing in more donors when they are worth more per donor.

So we will have to break out of our acquisition comfort zones.  We’ve talked about a few ways to do this:

• Paying to acquire advocates
• Creating content marketing/your own media company in your nonprofit
• Converting your existing non-donor constituents

To this, I’d add fishing in less crowded waters like face-to-face and DRTV.  The point is that the new donors you seek may not come from converting someone who gives to liking you; it may come from converting someone who likes you to give.

It’s unlikely that we are going to break out of 2% of GDP giving by simply increasing the value of our donors and not the number.

Seasonality is real.  Pick all, some, or none of the reasons listed in the previous posts.  The fact is that the fourth Auarter of  2017 was unlike  Quarters one through three, and unlike Quarter four 2016.  When it was make it or break it, Q4 made the year.

End of year is one seasonal signpost that cuts across organization type and sector – everyone has a focus on year end.  But organizations also have their own unique points of focus.  Maybe it’s your membership campaign or the time when your media partner ramps up,  or a time of the year when your issue is in the news.  The lessons here are to strike while your particular iron is hot.

And if you don’t have this seasonality other than end of year?  Consider heating your own iron and creating your own seasonal buzz.

Remember the upside.  Let’s say you look at these numbers and you are right around average.  Congratulations?

Well, consider what you could do by moving from a 50^th percentile organization to a 70^th percentile one.  A 50^th percentile organization had about a four percent increase in their gifts.  A 70^th percentile one had about a 24% increase in their gifts.  Our 70^th-percentile organization is:

• Gaining 60% of their total number of donors from new acquisition, instead of 41%
• Getting 22% of their gift revenue from upgrades, instead of 15%
• Losing only 8% of revenue from lapsing repeat donors, instead of 14%
• Losing only 25% of their donor file to lapsing donors from the previous year, instead of 36%

None of these are easy steps.  But the FEP report shows you a pathway – if you want to be the organization that increases its revenue by 24% per year, here are the metrics on which you will have to get out and push.

So I’ll end this as I began it: with sincere thanks for the FEP, to AFP, DonorTrends, and partner organizations for a quality report with important results.  Hope it, and this analysis, is helpful to you.

Nick