I shuddered as I read Nick’s post on the latest –and dismally declining—donor retention rates.

Here are the sorry figures from the Fundraising Effectiveness Project (FEP) comparing the first six months of 2018 with those of 2017:

• Total donors are down 6.6%
• New donors are down 9.2%

• New retained donors are down 18%
• Repeat retained donors are down 2.1%
• Retention is down 6.4%

For the past decade overall donor retention rates have been below 50% and continue to decline. The overall rate now stands at 45.5%.  Breaking that down further, New Donor Retention now stands at 23% and Repeat or Multi-year at 60%.

Most troubling to me is that 23% retention rate for newly acquired donors.  This means that for every 100 newly acquireddonors in 2018,  only 23 will give in 2019; the other 77 will have hit the exits.Why is this happening?

No doubt there are many reasons for this hemorrhaging.

• Loss of “Trump Bump” donors? We’ve known for nearly 50 years that the flood of new donors whose giving is primarily triggered by outrage and political concern seldom stick around very long. And this is doubly true if the causes to which they make their “rage gifts” don’t take the time and spend the money to onboard them properly.

But, the 16,000+ organizations included in the FEP are small to mid-level groups and are not heavily weighted toward the advocacy/political sectors, so I don’t think the reported decline is attributable in any significant degree to cooling down of rage giving that has spiked over the past 18 months.

• The Economy? Some analysts I’ve talked to note that while the economy is solid and the 2017 Tax Cut law benefitted some, there are many, many donors who have not benefitted and whose giving is thus negatively affected in what is still a difficult economy for them.

While the state of the economy can make a difference in giving, I’m not persuaded on that point. After all, retention rates were declining before the Great Recession of 2018 and have continued to decline since.

• Poor Mindsets. Poor Practices. Having studied hundreds of organizations –some with extraordinarily high retention rates and some with very low rates—I’m convinced that the failure to hold on to donors occurs in those organizations that place a premium on acquisitionand either deliberately or inadvertently ignore the importance of investing in what’s required to hold on to donors.

I see evidence of this almost every time I ask two simple questions:

• How much are you spending to acquire a donor?
• How much are you spending to retain a donor?

Without fail almost every fundraiser I talk to can answer what it costs to acquire a donor.  But when it comes to answering question #2 I’m met with a blank stare or a lot of beating around the bush of non-specifics.

In short, the sector is bleeding away its future either out of ignorance or deliberate malfeasance.

I’ve worried and warned about this for a long time.  In the July 4^th, 2006 issue of The AgitatorI lamented about the burn-and-churn, volume-volume-volume mindset that had infected our craft:

“We have raised a generation of 25-30 year-olds who know Xcel spreadsheets but don’t have the foggiest idea of the history behind the ‘movements’ they work for. Their digital dexterity impresses and intimidates the generation of bosses above them who have grown too well-paid and complacent to even bother challenging and teaching them.

“Adding insult to injury is the almost total neglect of our craft to break down the barriers and silos that separate the (dependable, predictable, there’s-lots-of-money-in-it-for-us suppliers) old direct mail regime from the fast-rising new media. My prediction, for what it’s worth, is that this failure to think in terms independent from the conventional will do irreparable damage to the non-profits we serve.”

I believe my concern 12 years ago is still valid today.  We simply aren’t paying enough attention to the basics required to onboard, hold and increase the value and commitment of donors.

There’s really not a lot of mystery about what has to be done. But, doing anything serious about the hemorrhaging of donors requires the right mindset, the devotion of time and energy, and additional money.

Since we started The Agitator there have been 603 posts related to “retention.” We spent years researching the subject and distilled it in Retention Fundraising: The New Art and Science of Keeping Your Donors for Life.  Clearly, we’re not making much progress.

Frankly, I really could use your help in understanding why so many organizations fail to understand this simple concept underlying the importance of retention:

If.. the average 5-year Lifetime Value of a donor is worth $350 or $500 or even $1000+ (it varies from organization to organization) and…

If ,,, an organization spends $25 or $50 to acquire that new donor who may eventually be worth $350 or $500 or far more; then…

Why…  wouldn’t the organization spend $10 or $20 more to properly thank, welcome and find out more about the new donor so they could properly communicate and hold on to  her?

Why bother spending $25 each to acquire those 100 donors if 77% of them will be gone by the end of their first year?

On Friday I’ll be back to outline what I think are the key barriers that stand in the way of proper retention,  and five simple steps that any organization can quickly, easily, and inexpensively take to insure their future.

Meanwhile, I’d sure appreciate your thoughts on why so many in our sector resist and avoid dealing with retention.

Roger