Don’t be the coyote: Falling retention rates can be stopped

Recently, Blackbaud’s npENGAGE blog gathered tips on how nonprofits can do a better job keeping donors on board from some of the best fundraisers around.  Your mileage may vary but each insight offers a little piece of gold bound to help at least a little bit. I was struck, however, by the general message: “you need to do a better job engaging people, acknowledging them, and being genuine, loyal and transparent.”

Retention rates will fall as predictably as Wile E Coyote if you don't understand why people support you and focus on those likeliest to stick.
Retention rates will fall as predictably as Wile E Coyote if you don’t understand why people support you and focus on those likeliest to stick.

The message is true and the tactics presented are solid but it’s not enough. We we need to understand why people enter the organization, recognize that many aren’t going to stay, and build fundraising strategies with likely long-term donors in mind. Organizations also need to structure their acquisition and fundraising programs (online and otherwise) for strong collaboration between staff that handle acquisition and long-term retention.

Donor retention is headed downward with a sort of Wile E Coyote falling off a cliff predictability.  Blackbaud’s head science guy, Chuck Longfield, reports that new donor retention is around 27% these days. Retention keeps falling while the incentive to keep people on board grows — acquiring a new donor costs five, six, seven or times more than keeping an existing donor.

In a nonprofit world where almost every group struggles with overhead and limited unrestricted giving (largely made up of new or newer small and mid-level donors that don’t tend to direct money at specific projects) donor retention seems like it would be a priority but it’s often not.

The growth of online fundraising and building email lists to feed online fundraising has taken  attention and resources away from member/donor cultivation and relationship-building. Acquisition campaigns are often built around advocacy and incorporate the latest in online analytics, marketing and testing. Acquisition results are immediate while retention data may take two, three or more years to build.

Don’t rely on (or reward) short-term acquisition results. Growing your list by 10,000 new email addresses after spending $20,000 with Change.org is a completed task, not a success. Realize that you know next to nothing about these people and why they joined your group except that they signed a petition. They also know little about your organization. The fact is, no matter how good your welcome series or how personal and timely your thank-yous, people that come into your group for the first time (even with a donation) aren’t necessarily invested — most won’t stick around. We need to focus on the best prospects and do a better job with them.

Find your friends and focus on making them happy

Start by rapidly giving people tools to understand what you do, why it’s changing the world and what they can expect to be asked to do to help. Give them multiple opportunities to take action in different ways – sending a letter to Congress, sharing a story with friends, following you on social media, coming to a local event or participating in a call. Send that group a short member survey that you can uniquely track. Look for individual actions as well as patterns among the group. Take note of those that did anything in the first six to 12 months and track their giving over time separate from the group as a whole. Chances are, people that engage at least a second time after entering your group’s orbit will be better advocates and donors.

Give staff incentives to build strategies that identify and cultivate the best long-term donor prospects. Give them room to experiment with retention, including multi-year performance evaluations. Demand to see data that identifies acquisition history and explains how pools of new donors or list members have fared over time. Reward retention growth, not acquisition (which is easy to do if you throw money at it).

In many organizations, online acquisition is organized around advocacy campaigns and/or online marketing staff. Meanwhile, fundraising (including retention activities) is done by fundraisers. These groups are interested in different outcomes, track their own data and measure success differently. But each depends on the other. Mushing online advocacy, acquisition and fundraising into one big team can help but it can cause more problems than it fixes while creating a team that’s not truly great at any part of the process. Give the team room (and responsibility) to collaboratively understand and improve retention.

Is focusing on people most likely to be responsive over time the same as preaching to the choir? Only if you have no plan for growth and continue to recruit from the same pool of people. What we’re talking about is coming to a faster, stronger understanding of why people hopped on board and operating better internally to communicate with new people (especially those most likely to stick) in ways that resonate.

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