2015 Fundraising Effectiveness Report: Read It and Weep
The AFP/Urban Institute’s 2015 Fundraising Effectiveness Project Report (FEP) is now out. The results are nothing short of depressing.
Bottom-line results in terms of donors and dollars for 2014, the period covered by the Report:
- Every 100 donors gained in 2014 was offset by 103 in lost donors through attrition. A net loss in donors of minus 3%.
- Every $100 gained in 2014 was offset by $95 in losses through gift attrition.
The 2015 Report is based on 8,025 responses from US nonprofits that collectively raised $3.61 billion in 2013-2014.
What the Report provides is a focus on net gain (or loss) in fundraising results from this broad range of nonprofits. I don’t want to give the methodology short shrift, but essentially it compares dollar and donor gains against losses in a variety of fundraising program categories, producing a net gain or loss for each organization, and the sector.
For example, ‘gains’ in giving include: $ from new donors, from recaptured donors (former donors who had lapsed), and from upgraded donors. ‘Losses’ in giving include: $ lost from downgraded donors, from lapsed new donors (new donors in the previous year who did not give in current year), and from lapsed repeat donors (repeat donors in the previous year who did not give in current year). Gains/losses in donor counts are measured in a similar manner.
To repeat: the results are depressing.
- The median donor retention rate in 2014 was 43%; no change from 2013’s rate.
- The median gift or dollar retention rate increased from 46% to 47% in 2014.
- The Report notes that “over the past nine years, donor and gift or dollar retention rates have consistently been week –averaging below 50 percent.”
That’s one huge heap of churn.
What you’ll find of interest in the report, which you can download here is that it provides detail as to where most of the gains and losses occurred.
What struck me as particularly appalling is that for many organizations as much as 20% of their total ‘gain’ in the numbers of donors came from recapturing lapsed donors. That fact, of course, begs the question ‘why lose them in the first place?’
Clearly the dozens upon dozens of posts ( go to The Agitator Search Function here and type in ‘retention’) Tom and I’ve done on retention haven’t sunk in!
While we continue to roll the rock up the hill, will some kind Agitator readers please share a few retention success stories?
Roger
8 responses to “2015 Fundraising Effectiveness Report: Read It and Weep”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
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Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
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Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
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There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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As you might guess I had to comment on these results since this report based upon actual data coming directly from thousands of real fundraising databases is what prompted the creation of Bloomerang.
Nothing is going to change unless awareness increases. Over the last three months I have spoken at several major fundraising conferences with an average audience size of 150. When I pose the question of “do you know your current donor retention rate?” the average number of hands raised is less than 10 per group! Folks that is around 6% who even know if they have a problem to address!!
Every NPO engaged in fundraising should make the donor retention monthly numbers the first metric shared at every staff and board meeting. Only then will the numbers increase.
BTW, after speaking this week in Memphis at ADRP which had many major NPO’s and Universities present, the VP of Development from a small private high school came up and shared that her donor retention rate was 76% and they know the number at the end of every week? It was so much fun giving her a big hug!!
Appreciate your comment, Jay. Ditto, yours is one of the first questions asked on my client intake form. I recently sent it to an organization that I was doing an audit for and the ED’s response to the retention question was:
“Lately, not good. The demand in our region is intense. Many get experience and move on. Average time at one agency for a develop director in our region is 2.5 – 3 years. Last director was with us a year and a half but she came from for profit and went back to it. Prior director was here 3 years.”
A misunderstanding of the question, but she made a great point: with the turnover in nonprofits, particularly development staff, how DO you keep your retention rates up?
Jay: I’ve always looked at retention on an annual basis. Can you clarify how it would be calculated on a weekly basis? Would it simply be looking at all of last year’s donors and seeing who’s already renewed their giving as of this week? Or something else? Thanks for your help!
This past year (ending 6/30), our university’s alumni donor retention rate wasn’t great at 52%. We’re in a significant growth phase of acquisition and reactivating long lapsed donors. On the bright side, our raw number of consecutive alumni donors increased by 15%…so hopefully the needle is in the process of being moved.
We just began sharing the retention numbers with the board and they are impactful. I also appreciate the comment about turnover of Development Directors. More significantly, Boards MUST be willing to commit every single day to participating in cultivating donors, or the numbers will not change.
Dr. Eddie Thompson, Founder of Thompson & Associates spoke to +3,000 fundraising professionals recently. He asked, “How many of you have actually been trained to ask for a gift?”
10 hands were raised!!!
Houston, we have a problem!!!!!!
Like Roger, I’ve been involved with the nonprofit sector for decades. Over the many years, the speakers at the front of the room have preached about the importance of donor retention. On occasion, I’ve even been the one doing the preaching. Sadly, the message never seems to sink in.
After one speaking engagement, someone came up to me and said, “Well, I guess everything you just said in there was just common sense.” I responded, “Yes, it was. And, when it becomes common practice, I’ll stop talking about it.”
Maybe, one of these days…
Donor Retention is always based upon a 365 day period of time. To show the difference from one week to the next simply changing the starting and ending dates of the 365 days and then comparing the rates.
Looking at your donor retention daily of weekly makes any organization keenly aware of who is about to lapse and they can then chart a course of action. (Hopefully…)
You can see how simple this is to view daily here: http://www.bloomerang.co/features
In case any of you don’t know how to calculate donor retention: Take the total number of donors who gave in Year 1 and divide it by the total number of those donors who gave in Year 2. Multiply that number by 100 to get your retention rate as a percentage. (You can do a rolling year, e.g. June to June, but it’s got to be the same for both calculations.) It’s in Roger’s superb Retention Fundraising book, and also (H/T to Jay Love) there is a free calculator at https://bloomerang.co/retention.
BUT someone should also mention that if your retention rates have climbed to some insanely high number it may be a sign that your donor file is dying (for example you do no acquisition). For one of the best summaries on this read: Donor Retention Tells Half the Story from Jeff Brooks http://www.futurefundraisingnow.com/future-fundraising/2011/04/donor-retention-tells-half-the-story.html