Measuring Donor Loyalty
We also understand a lot about the implications of trust on giving. In this context, most donors (unless they are major donors) are not able to see for themselves exactly how their gifts of $20 or $50 were applied to the cause. Instead they must trust the organization to do what it promised to do in its communications. Donors with higher levels of trust in a focal organization donate higher proportions of their philanthropic “pots” than those with lower levels of trust. They also have longer lifetimes of support and consequent lifetime value.
Finally, to take other learning from the commercial world, attitudes are one of the best predictors of subsequent loyalty. Specifically, if I indicate in a survey that I will continue to be a loyal donor, by and large I will continue to be a loyal donor. Equally, if I indicate that I intend to give again next year, I very likely will. Repurchase intention, as it would be labeled in the commercial world, is a very good indicator of subsequent behavior.
So what is a fundraiser to do?
We recommend developing a composite measure of donor attitudes and opinions that captures data on two or more of the constructs that we know are good indicators of loyalty: satisfaction, trust, commitment and/or repurchase intention. An amalgam of all four produces the strongest measure of subsequent loyalty, although there are obvious trade-offs with how cumbersome a measurement instrument might become.
We also urge managers to pick an instrument that includes a diagnostic dimension. Knowing that a donor is satisfied, committed, trusting and predisposed to giving again (or not) is conceptually interesting and might feed into a balanced scorecard of performance, but it isn’t helpful in guiding actions to improve the status quo. One must also understand why someone achieves a given level of satisfaction, commitment, etc., in order to take action.