Retention

One of the most frequent questions I hear as a fundraising consultant is, “Do you believe in using premiums to recruit donors?” It disturbs me, because it almost always is positioned as a “yes” or “no” question. But it’s really not that simple.

On one hand, premiums can be viewed as a wonderful cure to the problem of low response rates. The offer of a low-cost/high-value item as a reward for a contribution often will generate much higher response rates than offers that provide nothing.

Let’s face it. As direct-response fundraisers, we don’t spend enough time trying to renew lapsed donors. Most of our effort goes into acquisition and current-donor programs — and for good reason.

Current-donor mailings generate the bulk of your income, so that’s always your first priority. And even though most acquisition mailings lose money in the first year, they do create future donors. (Note: If you’re making money or breaking even on your acquisition mailings, you’re doing a great job. You should request a raise from your boss immediately, and write to us here at FundRaising Success and tell us how you’re doing it.)

Sending a timely, relevant thank-you letter in return for a gift is the prudent and polite thing to do — both in our private lives and in fundraising. It’s all about preserving a relationship, communicating appropriately, and establishing and maintaining a personal style.

Ms. Manners taught us the rules of etiquette when writing personal thank-you notes, but what about a donor program with thousands of people to thank? What are the rules? And who gets to write them?

The failure to immediately obtain second gifts from new donors is a grave error. In fact, many new-donor acquisition efforts stink because of this failure.

As a fundraiser, one of your primary obligations is to acquire new donors so your organization’s revenue will increase. This means, of course, that you need to acquire more new donors each year than you lose to offset natural attrition.

Puzzled about why your online donors aren’t renewing? Simple ... they’re different, those donors who give online. For a time, prevailing conventional wisdom was that a donor acquired online is most likely to renew online.

And the great hope was that online donors would be so much cheaper to re-solicit because we wouldn’t have to spend money on postage and printing and production … we could just e-mail them!

Fundraisers radically modify the value proposition with prospects and donors when they offer incentives for giving. Albeit engaging, some experts consider the technique to be short sighted, for renewing premium-acquired donors can be arduous and cost prohibitive.

A chronic non-responder (CNR) is an individual who has been mailed a succession of times and has not gifted your organization. Mailers feel the effects of these non-responders with respect to the expense of postage, handling, list rental and materials. So how long should you continue to mail to these potential donors? Should you suppress these names? Is it worth the special handling? And just how do you figure it all out?

There are many ways to measure the performance of a donor program. Gross and net revenue, the number of active donors and their corresponding lifetime values all are critical. But the rise of donor attrition is one insidious statistic that, if ignored, will rob a new donor program of needed growth and put a mature program on a plateau.

Newsletters, especially of the online variety, allow fundraisers to build and maintain relationships with stakeholders long before they even think about anteing up the greenbacks. Donors and prospects alike can now get engaged more often, and with more personal relevance — making it easier and more cost effective for nonprofits to forge links with individuals primed for giving.

If Sir Isaac Newton had been a fundraiser, his first law might have read: “A donor at rest tends to stay at rest, and a donor who contributes regularly tends to keep contributing.”

But most nonprofit organizations defy Newton’s Law. Today, most contributors sporadically give small amounts and respond infrequently. They force charities into expensive searches for new low-dollar donors to compensate for the unpredictable contribution stream.