I’ve been a fan of Jay Love for years. I even interviewed him for my radio show back in 2008! He gets both databases and effective fundraising. So I asked him if he’d write a post on donor retention. Jay is a serial entrepreneur, the creator of eTapestry and now the creator of Bloomerang a web-based donor database focused on helping your nonprofit retain donors. You can reach him on Twitter @jaybarclaylove
Improve Donor Retention by Knowing Why Donors Leave
by Jay Love
The buzz around Donor Retention continues to circulate widely. Nearly every fundraising consultant I speak to in the charity sector acknowledges this topic as so important they have been preaching about it for years. Most are grateful because the topic is now on the tip of the tongue for almost every fundraising organization.
With so much conversation about Donor Retention it is quite surprising how little formal research there is regarding the underlying reasons why donors stop their giving to some organizations, but continue giving to others.
We all know the key foundation for funding of most non-profits is a dedicated group of loyal donors. There seems to be some research about what incites the loyalty aspect of recurring donors, but darn little on why the loyalty ends.
Thankfully, the non-profit world guru on Donor Retention and Loyalty has conducted research on the subject. Since the team at Bloomerang had compared Adrian’s research in Donor Retention to Customer Retention in the commercial sector, I asked them to research why customers leave and compare it to why donors leave.
Our research kept leading us to a project conducted by the Rockefeller Corporation on why customers leave a commercial business. Are there parallels to the reasons why donors leave? We think the answer is a resounding yes on many fronts.
Please note the comparison of reasons in the [INFOGRAPHIC] titled Nonprofit Donor Loyalty Primer below.
As we alluded to above the research is pulled from our chief scientist Adrian Sargeant and from The Rockefeller Corporation.
Although both sides of the image illustrate why the customers or donors are heading to the exit, there is a higher percentage based upon the ability to financially afford on the donor departure side. This is not surprising since supporting a nonprofit is discretionary compared with purchasing food or paying for lodging, transportation, clothing, etc…
The largest takeaway in our opinion for nonprofits, which rely on donor support for all or some portion of their operating budget, is how important proper communication processes and messages are. Notice how the following items add up to 53% of the reasons why donors leave:
- Thought the charity did not need them – 5%
- No information on how monies were used – 8%
- No memory of supporting – 9%
- Never thanked for donating – 13%
- Poor service or communication – 18%
One can only imagine what a solid communication plan built upon a top notch CRM/Database solution could do for each item above. Perhaps all or most of the departures based on that 53% could be avoided with proper and regular communications. The reward is worth working for since it encourages, if not insures upward trends in donor loyalty and financial support!
Marc here: I believe any database solution can be used to improve donor retention, but definitely check out Bloomerang. It looks like they’re making a foolproof focus on donor retention. I also encourage you to check out the new The Donor Retention Project with tools and strategies from 12 experts, including Adrian Sargeant.(Of course if you need donors to retain, 100 Donors in 90 Days might be for you!)
Great post, Jay and Marc. In the rush to acquire new donors, many nonprofits forget about stewardship and regular communication with existing donors, especially middle-level donors. Segment, start small, keep regular!