Since DonorVoice is devoted to donor retention we thought it best to launch the blog with a series of posts laying out the problem as we see it and the solution.  This is Part 1 in a series.

The Problem

Everyone acknowledges there are significant issues with acquisition; namely costs going up, yields going down.  There are also significant issues with retention; namely there isn’t enough.   This is really two sides of the same coin; the increasingly expensive to acquire donor coming in has little (and maybe less than he/she used too?) motivation to stay.

The financial argument for trying to keep them is well known – it can cost up to 10 times as much to bring in a new donor as keep an existing one (Sargeant & Lee) and it takes, on average, 18 months for a new donor to cover the cost of acquisition.  Said another way, unless you have a specific plan to keep a newly acquired donor on the file for at least two years (assuming net zero isn’t your goal and how can it be?) then your organization, its mission and programs would be better served by not taking their initial contribution.

If the problem of acquisition and retention are related and severe and the financial imperative to fix it so clear then why are the trend lines getting worse, not better?  And why aren’t donors who give you one donation not more motivated to give you a second?

Some reasons posited,

?Donor demos are changing.  Or more aptly, our new, “old” donors are not like our old “old” donors and we don’t know how to reach younger folks.  For discussion, let’s accept this as true.

?More competition with an exponential explosion in the number of non-profits. This is a fact and for discussion, let’s accept as true that this is another cause.

?The trust in institutions in general and non profits specifically is falling.  Unquestionably true but is this a cause? Let’s posit, yes.

What do all three of these reasons have in common?  They are beyond your control AND they are constants in the equation that is fundraising, every org has to equally deal with these realities.

By analogy, imagine a world that goes dark.  Everybody is equally affected by the lack of light, after all it is dark everywhere and always.  The innovators among us would find a whole lot of candles and other incendiary devices rather quickly.  These same innovators would be the successful retailers who continued to sell product because they could be seen and found.  The non-profits that navigate the new reality for what it is rather than what it used to be will shine this same light.