Invest. Experience. Loyalty. Retention. Income. Repeat.

By Reinier Spruit
On May 19, 2016 At 2:00 pm

Category : acquisition, Best posts Q2 2016, donor service, donors, Latest posts, opinion, strategy

Responses : 9 Comments

If you are able to keep your donors longer, you will raise more funds for your cause. Simple as that.

The simplest way I can explain it:

We invest in our staff and our fundraising programs. This should result in the best possible experience for both potential and existing donors. This influences satisfaction, commitment and trust, which constitute the donor’s attitude towards the charity. In other words: increased donor loyalty. This leads to the desired behaviour: higher retention rates. In turn this results in more income, which can be invested again. In projects for our beneficiaries, in staff and our fundraising program. And repeat.

Long-term thinking will raise you more funds. Probably more than you can imagine. Do the math. Seriously, just calculate it. If you can improve your donor loyalty only a small bit, the long-term effect is huge. Professor Adrian Sargeant clarifies:

“This happens because the effect compounds over time. If you have 10 per cent more donors still giving at the end of the current year you have 10 per cent more people giving to the organization through year two. In the second year you’ll lose 10 per cent fewer of these and lose fewer of the balance in each subsequent year. Over time the effect mounts up.”

Write this down: to improve donor loyalty we need to improve the donor experience.

CDE logoNow, you’ve heard of The Commission on the Donor Experience, right? Ken Burnett and Giles Pegram can’t seem to stop talking about it. And that’s a good thing. Ken told me the following:

“The Commission is setting out to capture, define and summarise the very best thinking and practices so that together we can present the best way for fundraisers to implement a donor-based approach to the business of raising money to change the world.”

The Commission is going for two outputs. First, a crowd sourced documented set of donor-focused best practice. Second, an army of change agents. This crowd of enthusiasts will first co-create the best practice and subsequently they should start as the first group to implement it.

This army is already 500+ fundraisers!  And you can also join this initiative. You should! If you believe that donor-focused fundraising and long term or relational thinking is the way forward.

I’ve signed-up straightaway. Why? Because I believe we can do much better. We must do better if we want to tackle the world’s biggest problems. There is too much short-term thinking floating around in our sector. Along the way we’ve forgotten that we actually need donors. I’ve said it before:

“We need to value donors as much as we need value from them.”

There are too many non-evidence based decisions being taken. It’s a result of inexperience, short-sightedness and a clear signal that people don’t know what they’re doing. It’s hurting the sector and therefor it’s hurting the causes we fight for.

wantedApart from being one of the enthusiasts I am now also one of the project leads for the Commission:

I’m collecting as many examples of great donor-focused fundraising as possible. The purpose is to collect good, short examples of fundraising initiatives that provide donors and potential donors with the most rewarding, enjoyable and productive experience possible.

And I need your help. Together we can collect the best examples. Let’s shape the future of fundraising together.

You have three options. Comment underneath. Email me your thoughts. Or fill out this form and forward it to me.

Pretty please with a cherry on top. Thank you.

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Reinier Spruit (37 blogs on 101fundraising)

Reinier is in love with fundraising since 2001. Ever since he's trying to improve his own fundraising skills and those of others. He founded 101fundraising back in 2010. At the moment working with amazing clients through his one-man fundraising consultancy. Loves running and baseball.


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Comments

  1. We’ve got a great example of writing personal notes to donors and clear evidence of how its affected our attrition (for the good). I’ll send it over!

     — Reply
    • Thanks again Joe!

      For anyone who wants to know more: we’ll publish Joe’s exciting example here on 101 on Thursday 9 June!

       — Reply
  2. Without any doubt donors stay longer with us due to the personal care and attention given, through kind personal notes, reminders and friendly follow ups.

     — Reply
    • Thanks for your comment Ezreta. Do you have any personal practical experience that you would like to share as part of this project?

       — Reply
  3. Dear Reinier,

    You write “There are too many non-evidence based decisions being taken.” I’m really interested in the answer to the question “What level of evidence do fundraisers feel is sufficient to influence their behavior?” I too have been supporting the ‘Commission’ and it’s a question I put to Richard, its lead. What do you think constitutes reliable evidence?

    Yours,

    Donna

     — Reply
    • Hi Donna, thanks for your great question! I’m afraid there is not an easy answer.

      I think the evidence that is needed to change the behaviour of fundraisers can vary enormously and is also often a personal matter. I’ve seen fundraisers not change a thing while every piece of information indicated a certain direction. There are also smart fundraisers who can put the theoretical pieces together, even before they’ve tested it. That helps in speeding things up. The “leap of faith” then actually turns out good. But some things need to be tested. Other things could be implemented much quicker, based on common sense, or results from other organisations.

      Naturally the “non-evidence based decisions” I mentioned are the ones that take a bad turn.

      What do you think?
      Cheers,
      Reinier

       — Reply
      • Just to chip in. I think its a combination of taking that leap of faith which then delivers the evidence. So we took that leap of faith at SolarAid and we now have the evidence – but we had to do it in that order. I think there is more evidence out there from initiatives fundraisers have taken and the Donor Experience initiative will help attract (extract!?) as much of it as possible. It’s that group of early adopters who then provide the evidence base that will help others take the same approach.

        And of course the doing helps clarify so much. Now, with the benefit of that wonderful tool, hindsight, I can see that individual donors and supporters are channels in themselves – and so giving them a great experience is not just the right thing to do, it is totally strategic.

         — Reply
  4. What will be the evidence based requirements for people’s retention ideas to be published?

     — Reply
  5. I’d like to suggest a different perspective on testing donor-based approaches to fundraising. The question, ‘Has this been tested?’, seems not unreasonable. But if fundraisers consider themselves ethical it will at times be quite the wrong question.

    This can be seen from a comment on ‘UK Fundraising’ recently following Jackie Fowler’s and my article about Botton Village (http://www.kenburnett.com/Blog64thedonorschoice.html). A correspondent observed that Botton’s decision to offer their donors communications and opt-out choices has never been tested. He was right. Though paradoxically, completely wrong in how he approached the question.

    The reason it was never tested is that the fundraisers at Botton believed that ‘offering donors choices was unquestionably the right thing for them to do’. So they would never, ever, even contemplate denying that ‘right thing’ to a cohort of donors, just to test whether doing the wrong thing might result in a small increase or decrease in giving.

    If something is unquestionably the right thing for fundraisers to do for a donor, the prospect that by changing it we just might secure a small increase in our income is not a good enough reason to do differently. Standards of care for our donors need to trump marginal income enhancements, every time.

    This is why I disagree strongly with the internationally-renowned fundraising guru who claimed recently that any nonprofit that doesn’t have ‘an aggressive bequest marketing program’ is missing out on big money. That may be true, but most donors would recoil at the mere idea. I’ve never met a donor who wanted to be marketed at, certainly not aggressively. And on bequests? No, I don’t think so. Our causes won’t prosper unless this mindset changes.

    What’s required when the issue is ‘doing the right thing’ by donors is not a tested ‘right’ answer, but what Jackie Fowler referred to in her article (http://101fundraising.org/2015/10/donor-centred-fundraising-prepared-take-leap-faith) as ‘a leap of faith.’ If we do right by them, donors will give. As it happens, logic and the level of success Botton/CVT achieves seem to indicate that doing the right thing by donors consistently works very well. All signs are it will work way better than any alternative approach.

    This is why Reinier, Giles, Richard and I are so excited by the potential in getting the donor experience right.

    Doing the right thing by donors is not an option that should be tested. It’s simply what fundraisers must do, consistently. Perhaps the first step for us is to make sure everyone in our sector understands this.

     — Reply