One of the minor mysteries of the third sector is the vast disparity between the resources and attention devoted to acquiring new supporters compared to those focused on developing existing relationships. As a consequence, we see an enormous issue of donor churn.
According to the US Association of Fundraising Professionals*, only 26% of donors making a single gift to a charity give again (figures for the UK aren’t available but will be similar). Retention for so-called “committed” givers is better but not by all that much. The best figures we have for the retention of face to face donors** indicates that less than 40% of people signing up to direct debits are still giving after 12 months.
Charities in the UK are therefore spending tens, probably hundreds of millions of pounds to acquire “donors” who don’t give again. Even small improvements in donor retention rates have a huge impact, it has been calculated*** that a 10% improvement in year on year retention doubles donor lifetime values.
We know what are the key drivers of donor loyalty. In brief, they encompass a donor’s beliefs and values (does the charity share them), experiences (how did they treat me) and emotions (what would happen if I stopped giving?).
Charities can influence all these factors but most to only a limited extent. We can’t change a donor’s beliefs or values although if we can identify them we can show how our cause relates. We can certainly treat donors better and more appropriately but we shouldn’t reduce a donor retention strategy to issues of customer service. We can play on donors’ emotions but judiciously, guilt can easily turn to anger if pushed too hard.
But what we can definitely impact is how engaged supporters are with a charity. So a donor retention and development strategy needs to be above all an engagement strategy.
Engaging donors isn’t a dark art. There are a number of tried and tested approaches which successful charities have been following for a long time that drive successful engagement strategies.
1. Give it priority
Any strategy only succeeds if it is given organizational focus and resources. If your fundraisers are being principally judged on this month’s income or how many donors are brought in this year, then it doesn’t matter how many lovely engagement strategies there are. So who’s responsible for the quality of the donor experience in your organization? How senior are they? Are the trustees involved? Is the CEO? Are your senior management, well engaged in your engagement strategy? How much are you spending on the supporter experience? Is enhancing it in people’s job descriptions?
If you can’t answer these questions positively, you don’t have a donor engagement strategy, you have a wish list.
2.Get recruitment right
How we acquire donors has an enormous impact on their subsequent behavior. Recruitment sets the expectations for the future relationship between donor and charity.
How a charity recruits supporters, the channels it uses and the messages it deploys is therefore crucial to any engagement strategy. Problems happen when there is a mismatch between the expectations of the supporter and how they are subsequently treated by the charity. We’ve seen examples of this in the recent flurry of fundraising controversies if we needed reminding.
So really understanding the audience you are bringing in, what people are responding to and what they expect is a critical first step. Making sure that recruitment and donor development strategies are really joined up is vital. Anything which gets in the way of this, for example, the habit of many charities to have separate acquisition and development teams, is unhelpful.
I don’t think there’s any activity a charity does that’s more important than properly thanking its donors. There’s no excuse for not ensuring that everyone who supports you understands the difference they have made. But too, often charity thanking is neglected.
Here are some simple things every charity, everywhere can do to significantly improve their thanking of supporters.
- Review your thank you processes. What are your rules? Does everyone get thanked? If not, why not? How long does it take?
- Cut your response times. Make sure that every donation is thanked on the day it is received. If you can’t do that, outsource donation processing to a company who can.
- Get every piece of thank you communication printed out and spread them on a desk. Look at what they say and think about how they would make you feel if you got any of them. A good thank you is simple, warm, personal & relevant to the recipient. Are yours? If they’re not, rewrite them.
Then, once you’ve got good basic processes in place, look at how you can start to exceed donor expectations. There are lots of good examples of really good thanking, from the handwritten thank you note to the charity wide donor thanking day.
All the evidence we have is that the best point to engage donors is as soon as possible after they are recruited. How we acquire donors has an enormous impact on their subsequent behavior.
Signing up for a direct debit or putting a cheque in an envelope in response to an appeal in the post doesn’t make them a charity supporter. Let alone signing a petition or clicking on an email.
What someone is doing when they carry out any of these actions is showing some level of interest. Opening an often very small window for the charity to establish the beginnings of a relationship.
What happens next will largely determine whether that relationship develops at all. A proper thank you is one part of what needs to happen but it needs to supported by communications that engage and ask for feedback.
What charities tend to do, however, is to bombard new supporters with information about the organization. “Did you know that in addition to the one thing you said you were interested in, we do all of this other stuff too! Which we are going to bang on about whether you care about them or not!” Strangely enough, this approach often fails.
5. Ask about them
The first thing to do, as in any human relationship, is to get the other person to talk about themselves.
So rather than sending new supporters stuff in the “look at me” category (our magazine! our annual review!), how about asking them what they’d like? Which you’ll need to do to get permission for future communications anyway. And when you do that, get them to tell you a bit about them. Just a bit, not a 20-page questionnaire. A few snippets that’ll allow you to talk to them more relevantly.
Tailor your next communication based on what they tell you. Send them something they might actually be interested in, related to what they responded to in the first place. Make it simple, warm, personal and relevant. Provide opportunities to engage in different but relevant ways. And ask them a bit more about them.
And repeat. You are moving from broadcasting to supporters to having a dialogue with them. This is transformational.
6.Use (a mix of) the right channels
Understanding which channels supporters use and how is extremely important. Those of us who remember the early days of face to face fundraising will recall how charities excitedly sent all their armies of new young regular givers forests worth of direct mail appeals which were, of course, entirely ignored.
Supporters recruited through particular channels may only read or interact with your communications in that channel. Although it is more likely that they will at least look at messages across a range of channels. Understanding which and how is therefore key.
Charities need to be able to look across a range of communications channels, map these to donor preferences and behaviors and developing a truly integrated approach. All types of media are important here. Social media is now of major importance in donor development. Of course, not all supporters use social media and by no means all of them look at charity messages on those platforms. But an increasing number do and they can be targeted very granularly.
A properly multi-channel approach is something which many charities struggle to. Again, unhelpful internal demarcations come into play here, such as social channels being managed by “communications” teams not linked up with fundraisers. Breaking down these sort of barriers is essential for sustained success here.
7. Tailor your approach
Not all donors want to be engaged. Many people are happy with a pretty passive relationship with a direct debit and an update once a year. Every person who gives to you has expectations and these need to be acknowledged and met. Including when that is to be left in peace.
But look for those who show some interest and see if you can generate a bit more. Be personal. Be relevant. Use what information they give you and respond as individually as you can.
We have the technology to talk to each supporter, effectively, individually. We, as a rule, don’t. This a matter of systems and processes which for many charities will need to be rethought and re-engineered. Supporters won’t understand why Amazon with hundreds of millions of customers can speak to me as an individual when my favorite charity can’t.
That charities should report back to donors is with thanking, almost something that goes without saying. And again, like thanking it seems to be often achieved more in theory than practice. Good reporting isn’t sending supporters an annual review or a corporate document once a year. It’s providing specific, relevant feedback on what the charity did with your money and what happened as a result.
There are shining examples of charities who do this really well. Charity:Water, for example. As a donor to them, you couldn’t be clearer what they did with your money, what it achieved, or from time to time didn’t, because they talk about challenges as well as successes. And they do this succinctly, in an engaging and accessible way. Reporting needn’t be boring.
For a few years now, I’ve been working with charities on helping them properly feedback to donors on what has happened with their money. It’s been fascinating. Often the people who actually implement charity projects, the field staff, have no idea at all about the individuals who fund it and what would be interesting to them. When they do understand, we’ve found project staff to be enthusiastic communicators about their work. When we’ve managed to get unmediated content from the field we’ve found that donors love it. The charity just needs to get out of the way.
9. Ask. Appropriately
Of course, charities need to be engaging individuals for a reason. Engagement without an outcome is just entertainment. And even the most engaged people won’t give to you unless you’ve asked them. A focus on supporter engagement doesn’t mean relegating the importance of asking. It doesn’t mean asking less frequently, necessarily. It’s all about asking for the right things at the right time.
The more information is gathered from the supporter and their interactions, the more relevant and tailored asks can be. A properly engaged donor won’t mind being asked, they will expect it. But how they are asked, for what and why should be in line with the conversation you have had with them to this point.
Ask people in this way and they will give again. Of course, they will.
10.Test and learn
The engagement approach is only a theory, however, until it has been tested by your organization with your donors. The precise mix of communications, the media used, the timings and the messages all need to to be tested to find what works in each context. Every single element of a donor engagement can and should be tested at a very granular level.
Many fundraisers don’t test retention communications because of the issues involved in tracking the performance of cohorts of donors over time. It’s tricky setting up control groups and running tests over time.
And of course, there’s the time lag between making changes and knowing what impact they are having.
But actually, many things can be tested effectively without running something that feels like a trial of a new cancer drug. We know, for instance, that there is usually a clear linkage between initial direct debit attrition (no-show rate) and subsequent donor performance. So something which can impact on a no-show or second-month attrition rate will probably also beneficially impact retention over a longer period and be tested within a fairly short time frame. The effectiveness of individual communications can be tested through engagement metrics such as open and click-through rates.
Underpinned by analysis which demonstrates the financial impact of even marginal changes in attrition rates, fundraisers can iteratively develop an armory of effective donor retention communications and processes.
And then it’s a question of feeding them into the whole fundraising programme to ensure that all activities are developed with donor development at the core.
Source: Fundraising Fundamentals
Author: Tobin Aldrich