Tag Archives: Donor Retention

Let’s Reduce Fundraiser Turnover

By David A. Mersky

I spend a great deal of time thinking about and helping organizations increase their fundraising results. By achieving ever greater results and revenue, they can expand their mission and fulfill their vision. But, much has changed during my career, especially in the last several years.

When I began as a professional in nonprofit work, one could rely on donor retention year over year in the 75–80% range. Today, that number is dropping like a stone and is barely above 42%.

There are many reasons for this, but the one that causes me the greatest concern — and that is most within our control — is staff turnover within fundraising organizations. Here as well, times have changed.

When I began, fundraisers and staff members of organizations often stayed with a single enterprise for their entire careers. Today, as fundraising has become ever-increasingly professionalized, the average tenure of a frontline fundraiser is just 16 months.

In addition to representing the single greatest cost to an organization, high turnover has a tremendously negative impact on that organization’s ability to achieve its fundraising goals. Not only can it take several months to find a suitable replacement (during which time acknowledgements are not generated and asking does not occur), when a fundraiser leaves, a direct and familiar connection between organization and donor has been severed.

Fundraising is Relationship-Driven

Sadly, today’s nonprofit world has lost much of its appreciation for the vital link that fundraisers represent between donor and enterprise. It has reached the point where we almost behave — and are increasingly perceived — as if fundraising is somehow a deceptive practice: “I am here to trick you out of your money in order to advance our cause.”

In truth, it is anything but that.

Still, the perception persists. People who were once highly valued and respected for their skill in identifying, developing, and nurturing donor relationships are increasingly challenged in a world that is lacking in trust and basic civility.

Of course, every organization has some degree of turnover and morale issues. However, by bringing a corporate mindset to philanthropy, we have become overly reliant on transactional metrics, causing many of our most dedicated and highest quality people to seek greener pastures.

Here are steps you can take to reverse this unfortunate trend within your organization:

#1. Appreciate.  

Fundraisers are the essential link between donors and the mission, vision, and values of your organization. They are the sine qua non, without which there would be nothing. There would be no revenue if somebody were not there to ask and to help donors actualize themselves through their philanthropy. Let the donors, the board, and the fundraisers themselves know that we cannot do this without them.

#2. Invest.

Demonstrate your belief in the value of frontline staff by providing personal and professional development, thereby enhancing their ability to succeed. Provide individual coaching, offer regular training, send them to professional conferences and events where they will meet others and learn how to thrive from the best.

#3. Recognize. 

Recognition is a public expression of an individual’s value. Employee of the month, fundraiser of the week, bonuses for achieving mutually agreed upon objectives – these and steps like them suffuse the organization and demonstrate a tangible commitment to fundraiser accomplishments.

#4. Understand.

Fundamentally, fundraising isn’t about raising money… that’s simply a byproduct of the job. Great fundraisers serve as an advocate for the donor or funder, helping them advance themselves by making philanthropic gifts that have an impact and change or save lives. When you empower a fundraiser to see themselves in that role and tell them, “I may write your check, but you work for the donor,” more money comes in and more donors remain as recurring, faithful, and enthusiastic advocates for your organization.

#5. Reorient.

Too often, nonprofit leadership insists that the organization and its achievements take primacy over everything else. “How else can we justify asking for money if they don’t understand what we do?” While there is a measure of truth to that, your staff person will find greater fulfilment and success when they see their role first and foremost as helping people plan their giving to achieve the impact they want to make on the world in which they live.

A New (Old) Perspective

Too much attention has been paid in recent years to the metrics above all else: cash brought in, gift renewals compared to last year, etc. While that is important, fundraisers’ effectiveness — and their willingness to stay with your organization — will only occur if they are no longer required to view donors as human ATM machines.

To retain your best fundraising staff, provide clear direction and measure what you value most (e.g., relationships, contacts, communications with donors). Then, recognize and reward those who begin each day with your organization’s long term, best interests in mind. Only then can you count on consistently meeting — and often exceeding — your ambitious fundraising goals.

Is Executive Coaching A Good Investment?

Fundraisers talk a lot about donor retention. But, what about employee retention and how it impacts donors? Many nonprofits have a revolving door of development professionals. The average tenure of a fundraiser is less than 2 years. And the donor pays the price.

Consider a new development professional who starts a new job. Immediately, she wants to build relationships with major donors! But the donors have seen this cycle too often. They don’t want to spend the time gearing up to befriend another new development person. It shifts the work to the donor who has to meet more often so the development person feels comfortable. Which, let’s face it, is not why donors give to your nonprofit.

The new development person is set up for failure. Making it more likely they will leave sooner. Keeping the revolving door moving.

Then the question is, how do you get an employee to stay? One way is by helping them grow and feel successful with Executive Coaching.

Investing in your staff will help employee retention, which will help donor retention, which will help your bottom line.

Is Executive Coaching A Good Investment?

Executive coaching means different things to different people. 

  • A sounding board to enhance self-assurance
  • Short term strategy partner for new initiatives
  • Developing new skills like
    • Volunteer or board management
    • Governance oversight
    • Annual fund growth
    • Capital campaign planning
    • Prepping for a Strategic Plan
  • Building confidence so they are ready for the next challenge around the corner
  • Learning the skills to move up in the organization

If you, or someone you know is thinking about Executive Coaching and how it could help provide professional and personal development, send me an email. Or sign up for a free consultation on my calendar.

Feeling Frantic About Fundraising? 5 Suggestions to Help

Feeling Frantic About Fundraising? Photo by Quang Nguyen Vinh from Pexels

You are not alone. As we begin to see a light at the end of this pandemic tunnel, we have to consider what we need to accomplish in this year.

The time is ticking away.

  • Am I doing enough?
  • Will I be able to retain my new donors?
  • Will my LYBUNTS return?
  • Will I go back on the road to talk to donors?
  • Will other organizations be doing it if I am not?
  • Should I feel relieved or guilty about the strength of my nonprofit right now?
  • Do we need to hire staff to help us handle our new donor base?
  • Will these donors continue to support us so that we can afford new staff?
  • Is everyone feeling frantic about fundraising?

We know we have so much to do, and it feels like it all must be done today. Because it didn’t get done last week when it really should have been done.

Breathe. Or meditate. Or do whatever has calmed you down over the past year. And consider:

Where do we go from here? 5 Suggestions to stop feeling frantic about fundraising

  1. Assess your donors. Look at your donor retention levels for First Time Donors vs. Multi-year Donors vs. Monthly Donors. How do you match up to benchmark statistics? (email me if you want our benchmarks.)          
  2. Assess your donor pool without events. Many nonprofit events are smaller or not happening again this year. Now is the time to use those event hours towards your relationships with individual donors. And see if you can raise more money. In other words, events are often very costly and time consuming to produce so think of the resources you can dedicate to another initiative. (Please note: Events can be great community builders and friend-raisers but rarely offer the ROI of individual donors).
  3. Assess your staff. Do you have the right staff for the future? Do they have the bandwidth to handle your new donors in addition to the job they already do? Is it time to invest in your organization’s human resources?
  4. Assess your systems. Do you have a CRM that works for your nonprofit? Do you have recent prospect research? Do you send acknowledgements out within 24-48 hours?
  5. Assess your strategic plan. A strategic plan in one year might not look the same in 3 years later. Especially around the pandemic. Does the work look the same for your nonprofit? Are your board, volunteer, and staff priorities different? Would your SWOT analysis remain true?

Yes, we are big into assessments. We see it as taking a breath and looking internally before you charge forward into this post-pandemic world. Of course, if you would like us to help with your assessments email me.

And, hopefully, you can stop feeling frantic about fundraising and start feeling confident about moving forward.

Did You Know That Volunteers Are Twice as Likely to Donate as Non-volunteers?

It’s true. Volunteers are twice as likely to donate as non-volunteers. Now, months into the pandemic, how do you define a volunteer?  

Volunteers Are Twice as Likely to Donate as Non-volunteers

In pre-pandemic times, your list of volunteers was obvious. They were the people contributing their time and skills. That could have been serving as a Greeter to anyone who walked through your doors, stocking shelves at your food pantry, helping create a magical event, mentoring young members, or serving on your board or a committee.  

But now, mentoring depends on internet connections, many of your volunteers may be considered “high risk” and can’t or won’t come into your organization’s facility.  And your needs and opportunities may have shifted dramatically. Add to that reduced staffing, work from home scenarios that vary, and a host of safety restrictions. Many people who were at your organization weekly in February, may have barely heard from you since March.  

Now, let’s go back to my original premise

Volunteers are twice as likely to donate as non-volunteers. It’s time to re-engage these folks. Making volunteer retention a priority is another aspect of donor retention. Volunteers have the potential to become your most engaged donors. But they have to be asked.  

Today is the day to write, call and email your volunteers. And show them the love and appreciation you felt while they were walking through your doors. And, hopefully, the feelings will be mutual.  

A New Year Is Cause For New Goals For Your Nonprofit

2019 is coming to a close, so let’s talk 2020. A new year, along with a new decade, is cause for new goals for your nonprofit. Nonprofits should not have to struggle for funding nor beg board members to show up. And, if you are financially stable, you can think about what can you do to improve your programs, the experiences of members or beneficiaries, and the appreciation of donors and funders.

If you have goals for your nonprofit, I would love to hear what they are. If you don’t, consider the following:

  • Raise your annual fundraising by 10%
  • Retain 11% more donors overall each year for the next three years
  • Bring on two new board members in 2020 that will increase diversity – that can be age, gender, color,  background or any category that would improve the way you help your nonprofit be more representative of the population you serve
  • Start planning your capital/endowment campaign (let us know if we can help)
  • Evaluate your staff to understand how well you are deploying each person to achieve your goals
  • Hire an executive coach. It can seem expensive but it can be much more cost effective to train staff you like than let someone go and hire a new staff person with their own deficits
  • Plan two new ways to identify prospects
  • Inspire your board to be more supportive and help in fundraising (even if some won’t solicit they can still participate in development)
  • Identify three new ways to steward your donors
  • Evaluate your committee structure to ensure effectiveness instead of continuing to do it the way you always have.

I hope this helps you start your planning. And don’t forget: create a timeline to achieve your goals for your nonprofit so we are not having the same conversation when 2021 comes around.

Can Nonprofits Turn Previous Failures Into Future Success?

Can Nonprofits Turn Previous Failures Into Future Success?Listen to any conference speaker, self-help guru or tech entrepreneur and you are sure to hear about their failures. Of course, they are speaking because they turned their failures into lessons that helped them succeed. Can you imagine going to a funder and telling them that you had to close down your last nonprofit due to lack of money but this time you knew how to handle their 7-figure gift? Can nonprofits turn previous failures into future success? Of course, saying you have changed the way you run your organization is not enough.  You need to “walk the walk as well as talk the talk.”

  • Show that you now have a strong case for giving and are only approaching the right people at the right time.
  • Prove you have learned your lesson by talking about your new and detailed focus on acknowledgements.
  • Demonstrate that you understand stewardship for each and every donor and each and every gift.

What are other areas that nonprofits ignore that can be turned around to prove success?

To some this list may seem overwhelming. To others, it will highlight areas on which to focus or tweak in the coming year. Either way, turning previously missed opportunities into growth and prosperity will sustain your nonprofit. And, it will be something positive to talk about to current and prospective funders. Showing that you are learning and growing is something everyone can get excited about.   Please let us know if we can help you improve your nonprofit by emailing Abigail Harmon.

Set New Fundraising Goals for the Year? Make Sure You Have the Resources to Succeed

Resources for fundraising goalsIt’s a few weeks into the new year and, hopefully, you have set your new fundraising goals for the year.  And, if you intend to achieve those goals, we also hope that you have a fundraising plan with a stewardship calendar) in place. There is a reason for the adage, “A goal without a plan is just a wish.”

How did you set your fundraising goal?

Let’s talk about the reality of your situation.  Choose the letter that best describes your nonprofit’s fundraising goals for the year:

  1. I/we kept our fundraising goal the same as last year.
  2. I/we took the current budget and increased our fundraising goal by XX%.
  3. I/we looked at the budget shortfall and added that to the amount we raised last year to create our fundraising goal.
  4. I/we looked at what we raised last year, estimated we would have the same donor retention and new acquisition rates, and created our fundraising goal based on similar results.
  5. I/we looked at what we raised last year, estimated that we could implement a stewardship calendar that could help retain previous gifts while increasing our donor retention by 10% this year. We added an estimated amount based on those proportions to our fundraising goal.
  6. I/we looked at what we raised last year, estimated we could implement a stewardship calendar that could help increase our donor retention by 10% this year, determined we could hold three first-time donor events and three introduction emails to increase our first-time donor retention by 20%, and examine our lapsed donors above $1,000 for the past five years by looking at donors who could be reactivated. Then we established estimated increases for each category and added that to our fundraising goal.

The truth is, it is hard to get from A to F. It requires resources – human and financial. You cannot take the time to analyze your giving patterns, if you do not have someone to collect the data and analyze it. Even if you outsource the analysis – Mersky Jaffe & Associates can help you with this – you still need the resources to turn the findings into funding.

You will need resources for all aspects of your plan. Creating an overall stewardship calendar? You may want to send out additional snail mail letters. Creating a planned giving program? You might need collateral. Wondering how to deepen the engagement with first time donors? You might want to have coffee with the strongest prospects.  That all takes time and money.

Need it spelled out? Assuming you can increase the amount of money you raise this yea, without changing what you are doing, is a sure way to disappoint yourself, the executive director and board.

So, instead of considering what will not get done as a consequence of your new areas of focus, think about what resources you will need.  And ask for them. Could additional administrative help alleviate some stress? Do you need a new development professional? Is there a way to shift current under-utilized staff time to focus more on fundraising?

I know that budgets are tight and adding staff may not be high on your list of priorities. But you can’t raise more money without a plan on how to get there. Of course, it depends on how much you are hoping to raise. Trying to increase your numbers by $100,000 or more?  It may be time to increase your human resources. And know that the hire will more than pay for itself within a few years—even ten times over.

To quote another adage, “It takes money to raise money.” At least, that’s the adage as I remember it. 

Which is Easier? Getting a Teenager into College or Getting New Donors in December?

Getting into college or getting new donors?We are starting the college process with my 16-year-old twins. What is amazing when you look at the 3000+ colleges in the country is that there are 3,000+ colleges in the country. That means that if a child wants to go to college, there are plenty of options. And not every child wants to go to an Ivy League or an NCAA champion. In fact, there are thousands of other schools that are better matches for millions of students.

Stay with me here.

Your child will not, in all likelihood get into every school they apply to. The school will not get every student they want. And yet, 3,000 plus schools will have amazing freshmen classes starting each fall.

Just as a university only wants the students who want to be there, you only want the donors who want to give to your nonprofit. If they don’t feel connected students, and donors, will leave for a place with a better fit.

Getting New Donors

At this time of year, it feels as if everyone is talking about getting new donors. Whether they are focusing on end-of-year giving or strategizing for next year, the obvious path forward always seems to be about getting as many people as possible to write checks for any amount.

You may want to increase the number of donors in 2019, but you may not.  

I would suggest that instead of searching for 50 or 100 new donors to your organization, you consider deepening the relationships with the donors you already have. If you are anywhere near the average of 45.5% retention, you will have to find 50, 100 or more first time donors. But those new donors usually give lower amounts than long-term donors, so you will have to find 50, 100 or more first time donors each and every year to replace those you are losing.

You can raise more money if you focus on retention and increased giving. Unlike colleges, you will not have millions of people looking for new organizations to donate to. So, in all likelihood, if you are finding 50 new donors, they are coming from other nonprofits who did not engage them beyond the first gift.

So the real question about getting into college vs. getting new donors might not be which is easier, but which will help you find a better connection(s). Over time, you will raise more money, with less volatility, when you have stronger relationships with the people who want to give to you. You may never have millions of donors, but retaining hundreds of donors year after year will help you fulfill your mission. And that is the idea, after all.

 

* I suspect that this will be the first of many columns that will reference this fact. Why? When I learn, I like to share that learning. And so many skills learned outside of fundraising can be used inside of fundraising (e.g. timely thank yous, telling people you appreciate them, keeping in touch beyond when you are asking for something, etc). I hope it doesn’t give you PTSD or scare you. If it does, please let me know and we can talk about therapy sessions we offer. 

 

It’s Time for You to Evaluate Donor Retention For the Past Year

Say Goodbye to a Board Member Without Saying Goodbye

Say Goodbye to a Board MemberA close friend, Alex, told me an all-too-common, disheartening story about a nonprofit board she left a few years ago.

She was a founding member of a small nonprofit’s board of directors. She was an active volunteer, and one of their major donors, for two terms before deciding it was time to step down.  She mentioned her intentions to the president of the board, and he asked her if she would stay on. She agreed to one more term, helping to plan dinners for 3 fellow board members who stepped off during that time.

When her term was up, with her last meeting on the horizon, there was no talk of a dinner. In fact, there was not even an acknowledgement at the meeting for her service to the organization.  She awkwardly walked out wondering if the door was going to hit her on the way out.

This was no way to say goodbye to a board member.

December rolled around, and she began to wonder whether she should continue to donate. She helped found, build and strengthen this nonprofit. She had been invested in the mission, vision and values. But she felt ignored and underappreciated.

If you were in her shoes, what would you do?

Now flip that thinking, and consider, what you can do to prevent this situation with your board members.

  • Treat all current and past board members as loyal, valuable donors. Whether they have been giving $500 a year or $5,000, they are supporters that should be prime candidates for lifelong relationship.
  • Keep in touch. If they have been engaged as volunteers, encourage them to continue giving their time, perhaps, in smaller ways. Use stewardship “moves” to engage them around the calendar – not just write a little note on the bottom of the annual appeal when it is time to ask for a donation to pretend you are personalizing the ask. In other words, say farewell to a board member without saying goodbye to the person.
  • Honor their time and energy during the off-boarding process. Is a dinner necessary? If you have done it for previous board members than it seems like the right thing to do. If you are changing the way you do things, explain that and honor them in a different way. It can be as simple as toasting them at a small event, giving them a special gift at a board meeting and publicly thanking them in a newsletter article. People don’t expect the same treatment year in and year out, but they do expect the same respect.

What happened to Alex and her donations? The first year that she stopped giving to the organization she felt guilty. But, then, she reminded herself that she is not a priority to them. If she was, she would still be giving.  Now, she is just one more statistic contributing to that organization’s low donor retention rates. And she is happily involved in two other nonprofit organizations.

Want to read more about Board Members Relationships with your nonprofit?

Attention Board Members: 2 of 3 W’s Is Not Enough

Treating Board Members Like Donors

This Summer, Focus On $50 Donations – 7 Reasons Why

Focus on $50 Donors

As fundraisers, we spend a lot of time on major donors–whether finding, cultivating, asking, and/or stewarding them. It seems to make sense, it’s quite difficult to meet your annual goal $50 at a time.  But, that doesn’t mean that the smaller donors are not essential to your organization.  In fact, they may be more valuable. That is why, this summer you should consider something different and focus on $50 donations.

Fewer people are donating money.  The Chronicle of Philanthropy highlighted this shift to fewer donors giving larger amounts in a special report, The Disappearing Donor. (Note: These articles are “Premium”, you might not be able to read them unless you subscribe or visit a library.)

There is a reduction in the number of donors over the past 20+ years according to “Where Are My Donors?”  At the same time Giving USA listed increased annual donations for the prior three years, the report indicated that in  “2014, the latest year for which data is available, 56 percent of American households made a charitable donation. In 2000, that number was 10 percentage points higher, according to the Indiana University Lilly Family School of Philanthropy … Giving declined across every age group and every income and education level.”

How can you ensure you will have enough donors for years to come? Here are 7 reasons to focus on $50 donations.

  1. Smaller donors can be amazing advocates for the nonprofit. Some major donors only want to give money and not be bothered again. Smaller donors may do more – be more involved, share excitement as they learn more and, invest more over time.
  2. It doesn’t have to take more time to cultivate 100 $50 donors vs. a single $5,000 donor. Think about it for a minute.  For the 100 donors, you have to spend time segmenting interests, writing letters, emailing, sending articles/invitations (or other stewardship touches) and encouraging deeper engagement.  For an individual $5,000 donor you have to consider their interests, write a major donor letter, determine who will personalize it, find a time for that person to actually sign it, schedule times to meet with that donor throughout the year, consider personalized stewardship opportunities, and a calendar to ensure they will get done. At larger nonprofits, major donors are served by major gifts officers while other donors are often personally ignored. At small and mid-sized nonprofits, it is a matter of prioritization. Major donors cannot get all of the attention.
  3. $50 donors do not always stay $50 donors. Everyone has an entry level gift they give to nonprofits.  Whether consciously or unconsciously, they are testing the nonprofit to see how they are treated, how their investment is used, and whether they will give again in the future.  How will you treat them, how is their investment being employed and how will you encourage future giving?
  4. 20 years of smaller gifts can mean as much to a nonprofit as a major gift. If you have not yet started to track lifetime giving, now is the time to compile a list of 10+ year donors. Do you have some who have given for 25 years? Those are valuable donors who probably don’t get enough appreciation.
  5. Fewer small donations mean fewer donors in the major gifts pipeline. Ok, that brings us back to a major donor focus, but development has to have a dual strategy. You have to retain major donors and smaller contributors. It can take years of stewardship to upgrade a donor (10-15 touches) so focusing on smaller donors is not a one-time approach.
  6. You are laying the seeds for financial sustainability. Making your budget this year is important, but so is next year and the next year. One major donor can change their mind. All 100 of your $50 donors are less likely to shift priorities during any one year.
  7. Let’s take back the 80/20 rule (80% of the funding comes from 20% of donors). We have seen the 80/20 rule turn into the 90/10 rule.  #7 is similar to #6, but we want it to be stressed again and again. Putting numbers to your situation will provide clarity. One donor who decides that this year they want to support their congregation’s capital campaign instead of their child’s school fundraiser can shift the stability of both.  The more donors, the less the impact of any one gift.

A culture of giving to nonprofits is important for society, in general. No matter what tribe you associate with (political, religious, geographic, demographic, favorite social media, etc.), we don’t want to live as isolationists. We want to help others, that is why we work in the nonprofit sector.

Some want to raise money for a longtime church member’s grandchild in need of surgery and provide medical facilities with money for research the next day.  Others understand how important it is to help religious and academic institutions cover scholarships because dues and tuitions don’t provide enough. Maybe you see that there are buildings in need of repair and cities and towns without the room in their budgets to ensure clean, safe buildings.  We are a society that relies on each other but is in denial about our own part of the ecosystem. As donors decrease, the needs do not.  So encourage those lower level gifts, and value each and every donor. It will make a difference now, and in twenty years.

Read more about donor retention:

Creating a Monthly Giving Program: A Solution to Donor Retention and Financial Sustainability

Learn How an NPR Donor Drive Will Increase Your Donor Retention

It’s Time for You to Evaluate Donor Retention For the Past Year