Donor Loyalty Findings, Recommendations
Loyal donors are vital to keeping nonprofit organizations afloat, especially in tough economic times. They give repeatedly over time, give a greater share of wallet, make referrals and likely also engage in nonmonetary participation.
In a webinar in June, nonprofit consultants and Agitator bloggers Roger Craver and Tom Belford delved into the issue of donor loyalty, sharing some statistics from a recent Agitator donor study, thoughts on things that impact donor loyalty and recommendations for how to improve it.
Seventy percent of respondents to the Agitator's donor-loyalty study claimed "high loyalty" to a cause or charity they support, compared to doctors (64 percent), TV shows (57 percent), sports teams (52 percent), beer or soft drinks (48 percent), political parties (44 percent), and makes of automobiles (43 percent).
In the webinar, Craver and Belford said the four factors that affect donor loyalty are:
1. Shaky public confidence in charitable organizations.
Only slightly more than half (52 percent) of respondents to the study said they think the money they contribute is well spent. What's more, 59 percent said often they don't make contributions because they can't be sure the money will actually get to the people or causes it's intended for.
Public confidence in charities greatly effects loyalty, Craver said, adding, "This degree of confidence is a pretty unfirm foundation on which to build the charitable sector."
2. Organizations being defiantly faceless in a personality culture.
Organizations are led by personalities and don't have to be anonymous or faceless. Organizations don't do as good a job as they could putting themselves out there, Craver and Belford said.
They advised putting the CEO or executive in a video or having a blog or e-newsletter — something that gets in constituents’ faces.
3. Constituents can't get enough of the right information.
Fundraisers tend to think they're overloading donors with information. In the print era that might have been a concern, but in an online world people select the information that they want to get from an organization, Belford said.
For people to be loyal, information is important. There is no barrier to finding information online, so the monopoly on information that organizations used to have with their donors oesn't exist anymore. So it's important that organizations are a part of the conversation and sharing as much information about themselves as possible.
4. The more the merrier.
The barrier to entry for someone to set up an organization these days or say "join me" is zero. Anyone with a computer can be an organization or a "cause." So there's a lot more competition as opposed to the old days when you needed to be backed by thousands of dollars to do a direct-mail campaign.
The two gurus also shared the following recommendations for enhancing donor loyalty related to fundraising and cultivation:
- recognize the importance of list selection in acquisition
- put a high priority on generating a second gifts
- understand that not all donors are created equal — establish clear profit/loss per donor (or donor segment) benchmarks
- spend the necessary time in detailed analysis of your renewal/retention programs
- identify and specifically address likely defectors
- monitor the competition
- tell your success story to exising donors
- put your leader in front of your donors
- offer a greater sense of belonging — use online engagement tools
- facilitate self-education through online media
- acknowledge and reward loyalty and recruitment
Click here for more information about the Agitator study.