I’m glad Tom raised the issue of ‘lapsed’ donors in his post,  When To Give Up On A Donor.  The issue of seemingly inactive or financially unproductive donors receives to little serious attention.

In the direct response part of the trade, ‘lapsed’ donors are too often mechanistically shoved into various RFM buckets with little understanding of their true potential and almost total ignorance of why they got there in the first place.

Haven’t given in 14 months? Then put ‘em in the ‘lapsed’ file; after all, ‘active is 0-12 months’.   Haven’t given in 36 months? Put ‘em in the ‘deep lapsed’ file.  Ah, the wonders of Excel.

Of course rather than resorting to the slavish idiocy of cutoff dates we should be making all kinds of efforts to return inactive donors to active status. The process sure shouldn’t be treated as yet another segment to be slammed into the mailing or telemarketing program in hopes folks in those segments will respond to some ‘lapsed donor mailing’ with a rate at least comparable to returns on an acquisition mailing.

We need to be asking and answering at least two main questions:

• Why have they become inactive?

• What actions should we undertake to motivate them to be more active?

Why Did They Leave?

There’s plenty of research on this. Every fundraiser should read and understand it. Few bother.  Instead many just pull out their favorite acquisition package, make a few copy changes to remind the donor that she’s once given (and we sure miss you) and out goes the ‘reinstatement mailing’. Tick that box on the mail plan copied from last year’s.

There’s a better way. Take a look at the graphic on the right prepared by Bloomerang and reproduced in my book Retention Fundraising. You’ll note that with the exception of death and financial circumstances every one of the reasons that de-motivate and drive donors out is in control of the organization itself.

As Tom noted in his post , 9% of lapsed donors have no memory of ever supporting the organization. And, as you’ll see from the chart, an additional 13% have hit the exits because they never got thanked. Unbelievable.

Finally, an absolutely appalling 67% abandoned ship either because they received lousy donor service, inadequate communication, had no idea what the organization was doing, and therefore thought other organizations were more deserving. Wow!

No wonder Adrian Sargeant has concluded: “If nonprofits are to succeed in retaining donors, it seems clear that they need to secure a higher proportion of an individual’s giving, improve satisfaction with the quality of service provided, and deepen the bonds that exist between them and their supporters. It is particularly disturbing to note that so weak are these bonds in some cases that almost one in ten lapsed supporters have no memory of ever having supported the nonprofit in the first place.”

It bears repeating, over and over, that ‘good donors are made, not born’. It is the actions organizations take that influence donor attitudes positively or negatively. In turn, the donor’s attitude determines the donor’s behavior — the decision of whether to stay or leave.

As Tom noted in Defecting Donors Don’t Disappear folks who stop giving don’t vanish into some Land of Lost Donors. They simply switch their giving to other — often similar — organizations.

That’s why in a post related to Tom’s I warned of the importance of providing services, experiences and creative that distinguish your organization from others. In short, avoid swimming in a Sea of Sameness that so many groups find themselves thrashing about in.

Given the plethora of mailing list exchanges, cooperative donor databanks, and look-alike direct mail packages focused on technique (premiums, tote bags, labels, you name it), rather than differentiated on message and mission, is there any wonder there are so many ‘Switchers’? (‘Switchers’ are the 36% listed on the Bloomerang chart at the left.)

Unless your organization distinguishes itself by providing services, experiences, communications that go to the reasons folks stay or go you’ll continue to bleed donors.

And, as long as copycat fundraisers and their agencies continue to order up yet another certificate of appreciation, plush toy, set of labels, matching gift challenge, etc. — while also ignoring dull but basic actions like top donor service — what reasons do donors have to stick around after they’ve first given? Or even after you’ve somehow persuaded them to ‘reactivate’?

They don’t. So, when the next environmental (pick almost any sector) package hits their mailbox looking and sounding virtually the same as the ten others they’ll receive from competing enviro groups, is it any wonder the donors feel free to ‘switch’?

Tragically, all too many fundraisers and their consultants are content to pass these copycat tactics and boilerplate approaches off as ‘best practices’ not only for ‘active’ donors, but for reinstating lapsed donors. What nonsense. These ‘best practices’ have too often resulted in creating that massive Sea of Sameness encouraging donors to simply float away.

What is important in building or re-building any lapsed donor effort is to first gain an understanding of why donors have left or become inactive. As in…

…pick up the phone and ask them;

…conduct a proper donor experience and commitment study;

…visit with them.

My point is you’ll never really know how to get ’em back and keep them until you ask the donors.

How To Bring Them Back?

Tom’s question of when to cut or remove a lapsed donor from the file is a question we get asked frequently. The question itself is evidence that most fundraisers know that lapsed donors are important and that’s probably why so many are reluctant to remove them from their files.

Of course these feelings or intuition are correct. Lapsed donors are more likely to respond than individuals with no prior relationship to your organization. Yet despite their obvious value it continually amazes me that renewing or reinstating lapsed donors often draws far less creative energy, thought and spend than acquisition efforts.

If your organization positions its lapsed-donor efforts at a lower priority than other efforts, then it’s time for new thinking.

There’s no end to the ‘how to’ tips and guides for reinstating the giving of lapsed donors. Mary Bogucki of Amergent has prepared a thoughtful and brief guide titled, Who, What and How of Winning Back Lapsed Donors. I recommend you review as a way to trigger your own thinking.

Mary makes a couple of key points.

• Don’t skim the surface. Think of recovering your recapture costs over a two-year period.

• $15+ multi-gift donors are good prospects. Not so those who have given under $10 or only one gift.

• Donors with 2+gifts who have given in 2 consecutive years or more are the best.

BUT…don’t stop at simply viewing recapture as only a direct response fundraising activity. Note Richard Turner’s comment to Tom’s post on an additional, and important tactic using social media:

“I think there is another aspect we should take into account – and that is if someone is engaged and interested in you but currently doesn’t have the capacity to give. Are they lapsed because they are not an active donor? What they do have, if not disposable financial capital is ‘social capital’. And the social capital they have with their network will be far greater than the social capital your cause will have.

“Social capital is powerful — think when a friend asks you a favour or gives you a recommendation. So can you inspire them to spread your story for you? The answer is no if you write them off as a lapsed donor. It gets better too — because in this connected world you do not know who people know. In effect everyone is now a channel. So an individual can open doors to a corporate, a foundation even a major donor if they are so inspired. So if they are interested in you and the mission you stand for never give up.”

And for Agitator readers wondering about specific situations — like the $1 donor — and when to purge the donor file, I recommend the other thoughtful questions and ideas you’ll find in the Comments section to Tom’s post.

What are you doing to find out why your donors are leaving? And what are you doing to get them back?

Roger

P.S.  If you’re interested in stemming donor loss before it occurs read my post on Donor Churn:  How To Stop It Before It Starts.

Stopping churn — and increasing retention — begins by understanding and accepting the fact that current ‘best practices’ are deficient. Instead make the effort to put in place the proven fixes outlined in the DonorVoice paper described in that post.

Tests show that the effort is worth it. In fact, it amounts to a true ‘silver bullet’.

Look at these tested upsides:

• 3X increase in acceptance of additional offers;
• 50% decrease in attrition;
• 35% increase in net income.

Read and understand the detail presented in the section “Four Issues That Get In the Way of Fixing Donor Churn.”

• Thinking churn can be addressed when donors call to quit or with a reinstatement program.

• Believing churn can be fixed by sending more communications dubbed ‘engagement’ or ‘loyalty’ touchpoints, meaning those with no hard ask.

• Only assigning value to transactional data and being forced to guess at the ‘why’ of donor behavior.

• Treating donor service as a cost center and a burden.

You’ll find a fix for each of these four issues in the paper.