Job No. 1 for Fundraisers: Donor Loyalty
At the most recent International Fundraising Congress, Dr. Adrian Sargeant, director of the Centre for Sustainable Philanthropy at the University of Plymouth, and Roger Lawson, managing director of Revolutionise, presented findings from a study of five organizations in the United Kingdom that, combined, have 6.5 million donors. The goal of the research was to determine the greatest predictors of donor loyalty.
The findings showed that we can increase donor loyalty when we pay attention to its three main drivers: commitment, satisfaction and trust.
While I am sure we will be reading more about this research—and hopefully will see similar research conducted with donors representing a broad range of U.S.-based nonprofits—there were several things that came out of the presentation that fundraisers would be wise to immediately consider.
First, some quick facts:
- Commitment is the No. 1 driver of continuance and legacy giving (will a donor give again and again?), and the No. 1 driver for sponsorship (monthly giving) and membership.
- Satisfaction is the No. 1 driver of a donor’s intent to increase or upgrade his or her giving.
- Trust is the No. 1 driver for off-time gifts, and is more important at the beginning of a relationship than it is after a donor has been giving for some time.
- The first year-and-a-half determines the donor’s entire relationship with the organization.
Simply knowing the drivers of donor loyalty won’t help us unless we make an all-out strategic decision to start doing more of the things that create satisfaction, commitment and trust—and less of what erodes it, sometimes almost immediately following the first gift and sometimes over a longer period of time. Moving forward, these findings should drive our fundraising planning:
- If we want to positively impact a donor’s experience in the first year, it is strategically critical that we have a smooth onboarding process that starts with a timely receipt and continues with information and opportunities that are focused on a person who is in the “courtship” phase of a relationship with us. When we assume “intimacy” too soon, we risk driving this fragile new donor away. Simply adding the donor to our regular communication stream may be less expensive, but it could potentially drive him or her away, contributing to the high cost of donor acquisition and the low rate of donor retention
- If you’re really serious about donor satisfaction, consider prominently providing (online and offline) not only a phone number, but also the name of a person the donor can contact. Yes, emailing is more efficient (and cheaper) for us to manage (or, sadly, ignore), but when a donor is frustrated or, better yet, wants to know more before he or she makes another gift, waiting 24 to 48 business hours for a reply can seem like an eternity. We need to stop thinking about communications from donors as costs, but rather as marketing opportunities.
- Is the donation process simple? Is the gift acknowledged and the donor sincerely thanked? Try making a gift on a computer, a mobile device, over the telephone and via mail. What is your experience like? What should the experience be like? How quickly do you get your receipt? Then do the same thing with another nonprofit you either admire or compete with. How does that compare?
- Are you giving your donors choices (other than “take it or leave it”) when it comes to your mail? The presenters made an important distinction here: Don’t do this until your donors have sampled your communications; you will get fewer opt-outs if donors have experiences that show them that your mail offers value.
- Keep the focus on the donor, not on the organization. Look at your newsletter and online news: Is your organization still stuck in the “It’s all about us” world? This applies to thank-you letters as well—focus on the donor and what will make him or her feel proud that he or she wisely chose to support your organization.
- It’s difficult to engage with an organization that only contacts you once or twice a year. Multiple engagements build commitment, and commitment leads to loyalty. Research has shown that multiple actions in the fall are a trigger for year-end giving. These may be signing a petition, participating in a research survey, sharing a posting or multiple other things beyond just giving a gift. But every one can be building toward the next gift.
- Trust can be built by giving feedback on how a gift was used, being open and transparent when a mistake is made, handling complaints in a satisfactory manner, and showing that you are capable of doing what you say you will do.
Not sure where to begin? Then just think about this final thought from the conference session: Fundraising has been too focused on the needs of the beneficiaries. We need to be at least as concerned about the genuine needs of the donor.
That should give us plenty to think about as we plan the coming months.
Pamela consults with nonprofits, helping them develop their fundraising strategy and writing copy to achieve their goals. Additionally, she teaches fundraising at two universities, hoping to inspire the next generation of fundraisers to be passionate about the profession. Previously, Pamela led the fundraising programs for nonprofit organizations. Pamela is a member of the Advisory Panel for Rogare, the fundraising think tank at Plymouth University’s Hartsook Centre for Sustainable Philanthropy, a CFRE, a graduate of Wheaton College (IL) and Dominican University, and holds a Doctorate in Business Administration from California Southern University. Contact Pamela at firstname.lastname@example.org or follow her on Twitter at @pjbarden.