The most fundamental flaw in the conventional fundraising belief system is this: “Donors are born, not made.”

Believers are certain that somewhere out there, if only they can find the right data overlays, if only they employ the right predictive acquisition models, or if only they can hit on the right exchange lists, there’s an enormous reservoir of new donors that will flow their way. If. If. If.

Countless millions are futilely spent chasing the belief that somewhere, somehow there exists a preordained pool of humanity called ‘donors’. Folks who can be tapped if only we break the code.

No wonder so much of the sector suffers from unrealistic expectations, unremarkable results and lousy retention.

Here’s a far better, more accurate and actionable two-point belief system to stick in your fundraising brain if you really want to improve retention and lifetime donor value.

Point#1: Donors are made not born.

• It is the donor’s attitude that ultimately dictates the donor’s behavior (e.g. giving, upgrading, lapsing, etc.) toward an organization.

• The donor’s attitude dictates why the donor behaves the way she/he does.

• Good or poor donor attitude is the one factor a nonprofit can influence.

• Donor attitude cannot be measured by conventional behavioral/transactional metrics (RFM, etc.).

Most fundraisers are good at measuring donor behavior using RFM, up-grades, downgrades, almost anything related to transactions the donor makes with the organization.

Conversely, few fundraisers know how to measure donor attitudes and identify what causes those attitudes to improve donor performance or drive donors away.

Point #2: Until nonprofits focus as much on donor attitudes as they do on behavior they will never fix the retention problem. Why? Because they will never ‘make’ donors out of the leads generated in their acquisition programs.

Let me explain how these points relate to my two earlier posts in The Rest of the Retention Story series and to current practices.

It’s not all the fundraiser’s fault. Nor all the fundraiser’s victory.

In Part 1, my point is that retention is an organization-wide function and responsibility.  ‘Fundraising’ activity accounts for only a small percentage of retention success.

This is because there’s so much more to creating positive donor attitudes than appeals and renewal notices and other activities that usually spring from the fundraising department. (A greater number of direct mail appeals may post a bit more money, but will not improve attitude.)

Elements that go to attitude are the relevance and consistency of the organization’s messages on mission and accomplishments … the quality of its donor care or donor services … how well it provides donors with opportunities to make their views known … how transparent the organization is, etc.

All of these experiences provided by the organization combine to affect the donor’s attitude positively or negatively. These actions determine whether the donor stays or goes, gives more or doesn’t.

In Part 2 on ‘Attribution’, my point is that the usual ‘RFM metrics’ don’t help much when it comes to the issue of retention.

Why? Because they almost always tend to be focused on individual campaigns or fundraising efforts. On donor behavior.

As I noted, “Meanwhile, important, ongoing activities that add real and lasting value (proper ‘thank you’ and ‘welcome’ programs … donor-centric newsletters … extraordinary donor service and donor experiences) are discounted or ignored. This is why single campaign activities like appeals, and renewal notices are overvalued.”

Which brings us to the “Dog Catches Car” problem inherent in most of today’s donor and acquisition targeting.

First, Acquisition targeting. There’s no question that some acquisition targeting tactics and techniques (models, coop databases, exchange donors to like organizations) will result in an initially higher response rate. But response rate is a false metric when it comes to retention.

The problem is that these technically and tactically enhanced response rates seldom result in a higher retention rates or lifetime values.

Leaving aside the issue of upfront premiums or freemiums (which no sane Agitator reader concerned with retention should be using anyway), let’s take a look at the usual life-cycle result for specially-targeted acquisition prospects:

Stage One: The new ‘enhanced leads’ — responding to an acquisition package that likely resembles those of other organizations in the direct mail sea of sameness — make their first ‘contribution’.

Stage Two: At this point, one or more sets of tactics and techniques are employed to ‘thank’, ‘welcome’ and/or seek a second gift. Most likely also following the format in direct response’s sea of sameness.

Stage Three: THEN … the pre-set, ‘same old, same old’ pattern of contact continues, with the ‘analysts’ using RFM, or some behavioral variant, to segment donors for more frequent/less frequent, higher/lower asking amounts, monthly giving effort/no monthly giving efforts.

Stage Four. By end of the first year, 7 out of 10 of these new leads (the organization probably insists on calling them ‘donors’) have left.

Why Because, once again, even though extraordinary targeting efforts were employed to bring in ‘quality’ or ‘better’ leads, the activity that followed was the ‘same old, same old’ behavioral driven tactics and techniques that have little or nothing to do with building a positive attitude toward the organization.

Dog catches car. Dog loses car.

I don’t care if the dog is patiently waiting on the curb for a Mercedes, a Prius, a Ford F-150 or a Chevy, one thing is certain: whatever vehicle the dog catches, high value or low, he won’t know what to do with it.

Same with Donor File Targeting. ‘Analysis paralysis’ is rife in our sector. I’ve seen more energy spent on looking at multi-channel variables, seasonal variables, gift size variables, time-to-second gift variables (Mercedes, Chevies, SUVs, etc. even Blue Mercedes) than I can shake a spread sheet at. All focused on behavior. And almost all aimed at singular campaigns or fundraising efforts.

Sure, there are some marginal, incremental gains to be had. But for the sake of practical reality, when the analyst emerges with a specially-targeted segment of multi-channel donors, who came in on List X, and who’ve given 1.75 times in the past 19 weeks, I have to ask: “What are you going to do with this?”

The answer is usually a blank stare. Or worse, simply placing that much-fussed-over segment in the rotation of business as usual activity.

There’s a better alternative. A system where behavioral targeting is complemented with attitudinal targeting. A system that identifies what additional actions the organization can take to improve their best and worst donors’ attitudes. Actions that will increase their retention and lifetime value.

We’ll deal with that in Part 4.

Meanwhile, whether in acquisition or as part of a house file program, one thing is certain:  targeting based only on behavior won’t get us where we need to go in terms of significantly improving retention and lifetime value.

We need to be about the business of creating committed donors out of mere leads.

Roger