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7 ways to lighten your load in the coming year
It’s early July. For most nonprofits, that means the start of a new fiscal year. For fundraisers, that means you went from reaching (hopefully) your goal last week to zero this week. Feels kind of deflating, doesn’t it?
Fundraising, particularly annual giving fundraising, reminds me of the Greek myth of Sisyphus, a cruel ruler who was forever condemned by the angry gods to roll an enormous boulder up a mountain, only to have it roll back to the bottom just as he reached the top.
If starting the new fiscal year feels like that to you, here are some donor retention strategies to test at your organization. As a starting point, be sure that you know what your donor retention rate is for your organization. The formula is simple. Take the number of donors who gave two years ago and who gave last year and divide it by the number of donors who gave two years ago. So, if you had 5,000 donors give two years ago and 2,235 of those same donors give last year, your donor retention rate would be 45%. This means that you lost 55% of the donors who gave two years ago. So, improving your donor retention will mean needing to acquire fewer donors to reach your goals. And, because donor acquisition is expensive in both time and money, it will help your program run more efficiently.
So, here are some ways to improve your retention.
1. Use a donor stewardship matrix. You likely already track your donors by different categories when you solicit them. For example, your major gift donors receive a different appeal letter than small donors. Event donors may receive another type of solicitation. Apply this same strategy to donor stewardship, and map out a plan for each segment of your donor base. Each person who you solicit should also be coded for stewardship in a way that most closely aligns with his or her interests in your organization.
2. Conduct a donor survey. Everyone loves to be asked for their opinion. By conducting a donor survey, you accomplish two important objectives – first, you find out meaningful areas of interest and concerns of your donors, allowing you to target their interests better. Second, the act of asking donors for their opinion is an important cultivation. It creates a sense of inclusiveness and buy-in. Be sure to track who receives the survey and who responds, and be sure to report who the information was used.
3. Think beyond the gift club. You probably already have recognition groups for donors who give certain amounts, such as $1,000, $2,500, $5,000, etc. In addition to those groups, create gift clubs for donor behavior that you want to reinforce. For example, consider a donor gift club for contributors who make a gift for five consecutive years. You want to increase your goal by 10%? Create a gift club for donors who increase their gift by 10%. These gift clubs don’t have to be mutually exclusive, and they can be fluid, depending upon your organization’s needs.
4. Be personal. If the essence of donor cultivation is building a personal relationship with donors, why are you sending your donors letters and other communications that speak in the third person? Humans prefer communicating one to one. Dispense with third person voice whenever possible, and speak as one person to another. Avoid the “royal we” at all costs.
5. Stop bragging all the time. Yes, you are proud of your organization’s accomplishments and you want your supporters to share in your pride and enthusiasm. But when you constantly talk about how great your organization is all the time, that gets tiresome. Think of those holiday letters some people send out each year with their families’ amazing accomplishments. How often do you really enjoy reading those? Instead, share not only your successes, but your dreams for the future, and where plans didn’t turn out as well as you would have liked and what lessons you learned. Be real. Be genuine.
6. Give your donors problems to solve. This goes closely with bragging. If your organization is so wonderful, why does it need supporters’ money? Be sure to balance successes with needs that can be uniquely addressed with donors’ contributions. Otherwise, donors will find an organization that needs them more.
7. Make every donor feel important. Most organizations do a great job making the major donors feel important, but most major donors started as small donors. To grow small donors into major donors, it is critical that all donors feel that their gift is valued. By implementing a stewardship matrix, you’ll be sure that no donor, no matter who small, is overlooked.
Maybe you can’t implement all these ideas this year. Maybe you have other great ideas you want to try. Whichever is the case, be sure to track which strategies were used for which donors, then check at the end of next year to see what worked. By moving the needle on donor retention, you won’t get rid of that boulder that has to be pushed up the mountain, but you can make it lighter.
Catalyst Fundraising is a consulting firm dedicating to helping nonprofits improve their return on their fundraising investment. Contact us for help in improving your organization’s results.