A Catalyst for Fundraising Retention, Part 1

In January 2015, I made an offer in my blog, "Donor Retention: Stop Talking, Start Doing": “If you’re convinced that improving your donation-acknowledgement program matters to your organization’s donor retention, send me an email…. The first 10 people who … provide their organization’s name will be added to my 2015 year-end giving list.” I received wonderful emails telling me the good—and the not-so-good—aspects of various receipting programs, and I decided to include the first 19 organizations in my 2015 year-end giving. (I had 20, but one didn’t provide an address and I could not find the organization on the Internet.) Eighteen were fairly small, often regional nonprofits, and the other is one of the 20 largest nonprofits in the nation, as ranked by contribution income.

On Dec. 14, I mailed checks for $25 to these 19 nonprofits. Then, I mailed $25 checks on Dec. 31 to an additional four organizations that I have supported for several years. These are all “big” organizations, raising $90 million or more last year.

Despite all the arguments I have heard defending the need to save money by not receipting donors (or at least not donors under a certain threshold, often $50), I simply cannot support that cost-saving measure. Why? Because I look at retention rates among donors—and especially first-time donors who may test us by first making a smaller gift than they are capable of—and I see a gigantic problem. We are plagued in the nonprofit community with donors who have absolutely no loyalty.

Our No. 1 job needs to be building relationships that lead to committed donors—and I remain adamant that this means spending the 75 cents or $1 to say “thank you.” And do it fast.

Of the 19 organizations that I donated to on Dec. 14, 18 have sent me a receipt. Two had it in my mailbox within five working days of when I mailed the gift. That was impressive, and I give high marks to Bergen Volunteer Medical Initiative in Hackensack, N.J., and Good Shepherd Communities Foundation in Endwell, N.Y. In total, 12 of the remaining 18 organizations had a receipt in my hands within 12 mail days of my mailing my donation. The other four took up to 28 days (not as impressive), but at least they said “thank you.” And kudos to Catholic Relief Services, a large organization that is not too big to remain committed to showing gratitude; I had its receipt within 14 days.

That was the same amount of time it took for me to receive a receipt from ChildFund, one of the large organizations to which I mailed a gift on Dec. 31. (Like many of your donors, I kind of procrastinated, but I got the job done before midnight.) For the other three organizations, what can I say? Apparently, $25 isn’t worth a “thank you.”

In this day and age, is a thank-you letter really important? Am I simply a crotchety person who refuses to stay up with the times? No, I don’t believe it’s that. In fact, research has led U.S. psychologist Sara Algoe to develop the “Find, Remind and Bind Theory of Gratitude.” In fundraiser’s terms, saying “thank you” can help you find new donors, remind prior donors of the relationship they have with you and more tightly bind active donor relationships. So don’t just take this old dog’s word for it; even science tells us that saying "thank you" can be a catalyst for deeper and lasting relationships.

Donor retention is abysmal. Shouldn’t we be doing everything we can to keep the donors we have, instead of constantly chasing after potential donors who are often elusive and incredibly expensive to acquire? Can we afford to keep churning through donors?

If you are lamenting that your organization struggles to build relationships with donors other than the top tier that have been around for a while and/or gave enough to get special attention, I invite you to take my challenge for 2016 if you already aren’t receipting your first-time donors. Every week, send a thank-you receipt to half of your new donors that week (be sure to track who does and who doesn’t get a receipt). Then measure if that has any impact on your donor retention.

A donation should be a catalyst for a receipt and a “thank you,” and that may then be the catalyst for another gift. Treat the donors of $25 well, and you have a better likelihood of getting upgraded gifts or even bequests. But ignore those donors, never let them know that their gifts were appreciated and that they made a difference, and don’t be surprised if you never hear from them again.

Next week: The good, the bad and the kind-of-ugly in receipts I received.