What if there were no new donors? That was the first question nonprofit veteran Roger Craver asked in his presentation, “Where It’s At! A 12-Step Program to Get You to Tomorrow,” at the first ever FundRaising Success Virtual Conference & Expo held last Thursday (and available on-demand until Aug. 24). Craver, founder of DonorTrends and editor of TheAgitator.net, said that is the reality today — with declining acquisition rates, rising acquisition costs, declining retention rates and declining income playing factors.
The key, he said, is to act today like there will be no new donors tomorrow and stop looking for the silver bullet.
“The real magic lies in the fact that we need to start loving our donors,” he proclaimed.
In order to do just that, Craver outlined 12 steps to help your organization survive and thrive into the future.
1. Focus on retention
“There is nothing more important than working on keeping what we have,” Craver said. Fundraisers should know their donors’ giving histories and tendencies, including their preferred channels of communications/giving, gift amounts, frequency, etc., and upgrade/downgrade accordingly.
And of course, “every fundraiser worth his or her salt should know what the retention rate was five years ago, three years ago, now, and what it will be in the future — and what you’re going to do about it.”
2. Focus on share of wallet
Craver stressed that retention is not enough; you must be aware of what he calls “mission competition.” In other words, how much do your donors give to you compared to the other organizations they donate to? There are literally hundreds of thousands of nonprofits competing with you for your donors’ money. How do you fit in and compare? “Look to increase the share of giving to your organization,” Craver said. Use external tools such as merge/purge reports, wealth screening reports, and applications like TrueGivers to learn this important information.
3. Develop and test hypotheses
Ask questions about your organization — What is going wrong? What is going right? What’s happening to other organizations in my sector? Who’s doing better and why? — hypothesize why and test. See if what you think is working actually is working, and discover areas to improve where things aren’t working.
4. Invest in research
The more you know about your donors and your organization, the better understanding you can have about how to bring in funds and foster loyalty. Study your most loyal donors to find out what makes them loyal. Conversely, dig deeper to see what you can learn from your least loyal donors. The more research you embark on, the more you can learn about your mission, message, channels, acquisition sources, etc., to better optimize your programs.
5. Re-examine your 'product'
“Look at how people describe what you do and how you describe what you do,” Craver said. Is there a disconnect there? If so, why? Ask yourself questions such as: Should we emphasize a different part of the organization or program? A new initiative to better compete with others? Are we still relevant? Is there new competition? Find ways to connect with donors and stay top of mind.
6. Test your message
Any good fundraiser knows testing is essential — don’t let the economy prevent you from continuing this best practice. Test alternate messages, images, spokespersons/signers, premiums, positioning, etc. Craver suggested multivariate testing because it is fast, accurate and inexpensive. Also, he pointed out, “Almost 85 percent of people that join an organization do research online before giving,” so test your online communications as well.
7. Revisit prospecting tactics
The timing, channel, audience may be slightly different than before. Test new prospecting techniques, and make adjustments accordingly. Also, be aware of changing demographics. “Involvement is important,” Craver said. “The end of the baby boom generation and all of Gen X and Gen Y — this involvement and ability to do more than just give money is important.” This generation of donors wants a larger say and more transparency in where their dollars are going, and they want to be a part of the mission, not just funders.
8. Identify and activate your missionaries
Craver put forth these statistics: 84 percent of all donors prefer to be solicited by folks they know, and 20 percent of most donor databases comprise missionaries/recruiters, i.e., donors who want to and enjoy spreading the word about your mission. “It’s very important to design a plan to put these recruiters to work,” Craver said. "The missionaries who have a network of friends … social media should be tailored to them.”
How can you tell a missionary? “Look at their actions,” Craver offered. “People who tend to be most engaged, you can be 90 percent sure they’ll be missionaries.” Design a recruiting plan, and give them the tools — social-networking pages, widgets, peer-fundraising tools, etc. — to be missionaries on your organization’s behalf. “These are the folks who will really produce far more than they give,” Craver said.
9. Recognize and reward loyalty
“Donors who you can identify as loyalists give four times to five times as much as the average donor. [Keeping and garnering loyal donors] is a matter of financial survival and financial thriving,” Craver stressed.
The characteristics of loyalty don’t seem to fit any specific demographic, he said. Loyal donors tend to identify themselves as loyal by giving the same amount to every organization they give to. Craver suggested doing a very simple online survey to a new donor asking her about her support habits to other organizations. That way, you can quickly identify those who will be most loyal to you.
“You want to spend the most time and money with those people to reward that loyalty,” he said. How? Craver stressed that you don’t need a grand event. “What people like more than anything else is to know that they made a difference,” he shared.
Donors normally ask two questions when deciding to donate: Will my money make a difference, and did it make a difference? Implement a stewardship process that reports back to the donors on the impact of their gifts. Acknowledgment is key as well — anniversary cards (of gifts or membership), thank-yous, birthday cards, etc.
“Recognition that you are watching and know what they are doing is so important to donors,” Craver said.
10. Rekindle the love
Re-engage lapsed donors with new messages and new offers.
11. Prepare for courtship
- Invest in loyalty and “missionary” programs.
- Attract “believers.”
- Give them ways to show support and get involved.
- Invest in lead generation, modeling and research.
12. Revisit step 1