The M+R 2021 Benchmark Study is now out.  And it’s a winner.  In fact, it carries news of lots of winners in the pandemic year of 2020.

I hope you’ll read the entire report packed with charts and editorial insightful commentary covering digital advertising , email messaging, text messaging and peer to peer, email metrics, social media, website performance  and a great deal more.

Today I want to put special focus on their fundraising findings because I fear many organizations that saw stunning results will see their pandemic victories slip if they don’t pay attention to retention –holding on to the bumper crop of 2020 donors.

Here’s the headline fundraising data from M+R:

• Total online revenue grew by 32% in 2020. Hunger and Poverty groups reported a stunning 173% increase in online revenue over the previous year.
• Revenue from monthly gifts increased by 25%, while revenue from one-time gifts increased by 37%. Monthly giving accounted for 19% of all online revenue in 2020.
• Nonprofits that engaged in COVID-19 response saw noticeably higher growth in one-time giving revenue than those that did not.
• The average nonprofit donor made 2.03 gifts and contributed $167 in 2020. Both of these per-donor metrics are slightly lower than 2019 — the increase in overall was largely driven by more people givingrather than people giving more.
• Overall, 41% of 2019 online donors were retained to make another online gift in 2020. The retention rate for new online donors was 25%; for donors with a previous giving history the retention rate was 63%.

Note the last bullet point: Retention rate for new online donors was 25% and for donors with a previous giving history 63%.    So, if any of the bean counters or naysayers in your organization want to fight your spending money on retention just show ‘em those two stats that reflect huge difference in giving potential.

As Jeff Brooks pointed out in his recent post on this bonanza, “ Donor behavior usually changes slowly.  This past year it surged dramatically forward.  Don’t miss the opportunity to be there and be relevant for your donors.”

Which brings us to the issue of retention and the imperative of focusing on making sure –especially sure where new and upgraded donors are concerned—that your donors get the care and range of donor experiences they need and deserve if you expect them to stick around.

Here are the Agitator’s 7 Easy Retention Wins to work into your programs –right now.

Win #1.  Clean up your addresses.    Those carefully and creatively prepared mail appeals, renewals and newsletters won’t do you much good if they never reach the donor. For the average organization 11% of its donors’ mail addresses fall into the ‘undeliverable’ category.  Don’t assume your CRM, or your mail house automatically keeps your list up to date. Most don’t.

Go to the Agitator Toolbox where TrueNCOA will update your file for a mere $20 (regardless of file size) and then alert you to any changes that occur in the future. In addition, you can quickly and inexpensively identify and remove deceased donors from you file at TrueDeceased

Win #2. Say “Thank You”.  The art of saying thank you is one key to building and holding on to great relationships.  Unfortunately, it’s too often ignored.  Many organizations take weeks, sometimes months to acknowledge and thank their donors. Others grudgingly treat it as a ‘cost center’ by short cutting or mangling this essential process. Still others never get around to it.

No wonder in study after study a third of all donors who quit say they did so because they felt unappreciated.

Thank-yous are most effective when they’re prompt, heartfelt and relevant.  Sending a tax receipt or some officious looking, computer-generated note does not qualify as a thank-you.

Do yourself and your organization a favor. Visit Lisa Sargent’s Thank-you Letter Clinic at SOFFI, the Showcase of Fundraising Innovation and Inspiration. There you’ll find a treasure trove of how-to advice and thank-you letters you can swipe.   

Win #3.  Pick Up the Phone.  Want to hit a retention homerun?  Pick up the phone and thank your donors –for their gifts, as a welcome to a new donor, as a tribute to the donors who are celebrating their 2^nd, 5^th, or 10^thanniversary with your organization.

Better yet, have your board and staff do it.  Not only will they find it easy and fun, calls coming from inside an organization work far better than calls from a telemarketing center.

For those who doubt the power of a thank you call, years ago researcher Penelope Burk reported that there is a direct relationship between thank-you calls and the following year’s giving—donors who received thank-you calls gave 40% more the following year.

Chuck Longfield, Blackbaud’s Chief Scientist now retired, repeated this research many times over and found similar results. “And yet”, Chuck notes, “in my work with clients, I see very few organizations that consistently make these thank-you calls.”

Win #4. Improve Your Donor Services. Too often we treat donor service as an afterthought, assigning it to an unpaid intern to handle during lunchtime. We mistakenly treat it as a cost center, when in reality good donor service actually adds thousands, tens of thousands, or hundreds of thousands to the bottom line because of its positive effect on donors’ attitudes.

From our DonorVoice studies, it’s clear that virtually all organizations should be offering the following. Failing to do so costs the average organization up to 20% of its donors:

• Convenient options for reaching donor service agents. (e-mail, website, live chat, phone)
• Convenient hours of operation to reach a live operator or donor representative. “Convenient” to the donor who may call after work, not the organization’s 9-to-5 office schedule.
• Helpful and knowledgeable donor service support representatives.

Win #5.  Be Boring.  Most of us get bored with our organization’s messages long before our donors do.  So, we’re constantly fiddling with new copy, new creative, clever new ways to describe our mission and programs.  Tinker. Tinker. Change. Change.

All this tinkering and changing flies smack in the face of consistency. And when that happens we risk confusing our donors and driving them away. Thus, the recommendation to be ‘boring’, meaning, be consistent.

There’s a reason successful consumer companies err if they deviate from the makeup of their core product (think New Coke); consistency. And why successful political candidates employ the same stump speech at every stop, boring the life out of their staff, themselves and the traveling press corps; consistency.

The same holds true for nonprofits that are successful year after year: consistency counts.  A lot.

Be especially vigilant about consistency where new and first-year donors are concerned. A donor who makes his or her first gift because of a direct mail package or email featuring a powerful story on rescuing abused dogs isn’t as likely to make a second gift if thanked with a letter or email touting the organization’s work to save porpoises.

Win #6.  Give Donors Lots of Opportunities to Talk Back.  All successful relationships—including those with donors—require the give and take of communication.  Yet, all too many nonprofits fail to seek feedback from their donors.

We seek their money—that’s one form of feedback, of course.  But so is soliciting their opinion. Why do so many organizations relegate feedback to a banal direct response tactic such as placing a survey on the reply form, or forcing the donor to hand-write a note on the same reply form, only to have it summarily tossed when it reaches the organization’s mail room?

Every organization regardless of size or sophistication has dozens of opportunities to solicit feedback. Among them:

• Holding an inexpensive telephone town hall meeting to seek your donors’ opinions. (See Agitator’s Meet With Your 27,000 Best Donors Tonight)
• Sending a brief e-mail survey to your donors after every contact they have with your donor service center. Ask if their needs were met, if they’re satisfied.
• Installing a pop-up website survey to determine users’ level of satisfaction in finding the information they need. ( See Donor Feedback Platform about collection feedback from all channels.)

It’s important to note that even the mere act of seeking feedback –whether the donor responds or not—boosts retention.  In a post titled Better Than Fundraising we reported that in a test involving only a single instance of collecting donor feedback here’s the performance 6 months after the test:

• Contributions/purchase on additional offers increased 3 times over the control (no feedback request) group.
• There was a 50% decrease in attrition; and,
• A 35% increase in net income from the test group over the control group.

Win #7.  Get Into Monthly Giving.  Putting a monthly giving program in place should be on everyone’s list.  While this isn’t as simple and inexpensive as the other six retention wins it’s mighty, mighty valuable both in terms of retention and revenue.

After all, if you can communicate with someone monthly and also receive a contribution every 30 days or so, he/she will be among your most loyal donors.

If you’re interested in launching or improving a monthly giving program, I think you’ll find this Four-Part Agitator Monthly Giving Series helpful. Here,here,here and here.

AND…. On Tuesday, May 25, 1:00PM-2:00PM ET Harvey McKinnon and Andy Robinson will teach you how to start and grow a lucrative monthly giving program or improve your existing one.  Register here.

Winning Words:  Remember the Donor

Concentrating on these winning  basics of donor care does involve work, some of it repetitive and dull.  As such, it’s easy to avoid –and, besides, it’s a lot more fun to divert our attention to the new and shiny.

But frankly, if we’re to succeed at increasing the retention rates among our donors—especially those who went the extra mile in the pandemic year– we must give up the search for some magic bullet that comes as an app on a smart phone.

Instead, as we work to apply retention first aid to our programs we constantly need to remind ourselves that we’re here in service to the donor—the driving engine of good works.

Roger

P.S. Do the math.  Even before you get to Easy Win #1, you need to know your current retention rates; otherwise, you won’t know whether these recommended actions are working.   It’s easy to calculate:

Step 1.  Count the total number of donors who gave in your most recent calendar or fiscal year.

Step 2.  Divide the number of donors who donated in Year 2 by the total in Step 1.

Step 3.  Multiply the result from Step 2 by 100 to obtain your retention rate as a percentage.

For example, if 100 donors gave last year, and only 50 of the same donors made a gift this year, your overall retention rage would be 50 percent.

In addition to calculating the overall percentage of donors retained, you can also use the same process to calculate the retention rate for new or first year donors—the most vulnerable time for donor retention.  And do it also for multi-year (donors who’ve given two or more years.  Finally, it’s also helpful to calculate your revenue retention rate which is particularly helpful in spotting problems in the critical first two years of a donor’s life with your organization; and, also for spotting upgrade/downgrade issues.

For example, if 100 new donors gave you $50 each, you received $5000 from that acquisition effort. If, in the following year 25 of those 100 donors upgraded a bit and each gave an additional $60, you received another $1500.  Your donor retention rate in this example was 25 percent. (25 divided by 100) and your revenue retention rate was 30 percent ($1,500 divided by $5,000).