AFP Conference Roundup: Three Main Loyalty Drivers — Donor Satisfaction, Commitment and Trust
Improving donor-attrition rates can increase the revenue an organization generates by anywhere from 50 percent to 200 percent, according to Adrian Sargeant, Robert Hartsook Chair in the School of Public and Environmental Affairs at Indiana University.
In his presentation during the session, "Where Have All My Donors Gone?," at the 46th International AFP Conference on Fundraising that took place in New Orleans last month, Sargeant said nonprofits lose 50 percent of cash donors between the first and second donations, 30 percent of cash donors year on year thereafter, and 30 percent of regular or sustainer givers year over year.
Increasing donor loyalty is the key to increasing donor retention, Sargeant said, adding that the three main drivers of donor loyalty are donor satisfaction, commitment and trust.
1. Donor satisfaction
Donor dissatisfaction is at the root of some of the key reasons donors stop giving, some of which include:
- feeling other causes are more deserving;
- feeling the organization no longer needs their support;
- they're not reminded to give again;
- the organization didn't tell them how their donation was used;
- feeling that communications from the organization were inappropriate; and
- feeling the organization asked for inappropriate donation amounts.
In the commercial world, Sargeant said, customer satisfaction is the single biggest driver of loyalty. Customers who have complaints but don't voice them are less likely to buy again than customers who do complain and subsequently have their complaints resolved. Does your organization encourage donor feedback and respond to issues and complaints promptly?
There are two main forms of donor commitment:
Active — A genuine belief in or passion for a cause.
Passive — Continuing support without any real passion for the cause or the work the organization does.
Factors that influence a person's commitment include service quality; shared beliefs; a personal link to the organization; trust; learning (e.g., is the donor being taken on a journey or just being shouted at by the organization); and multiple engagements with the organization.
Trust with donors has to do with their belief in your organization's ability to deliver on its mission. One way organizations can increase donor trust is by giving them feedback about what they've achieved with donor funds and how they achieved it.