When building a donor base, watch the coming in and going out

Walking along-side the leadership teams of a couple of start-up ministries has given me a renewed appreciation for the hard work of building a support base. I also see the joy with which these social entrepreneurs receive each gift. In the early years of a nonprofit, every donor and his/her gift count and are counted — literally.

You’d think, then, that donor stewardship would be a high priority from the first ask, but sadly, such isdonor retention infographic not the case. At least that’s the word from the Association of Fundraising Professionals via their 2013 Fundraising Effectiveness Study.

For the seventh straight year, the research team over at the Urban Institute (the folks who conduct the study for AFP) found that American charities lost more donors than they found (105 going out for every 100 coming in). And while there was a positive $34 million gain in giving, every $100 gained in 2012 was offset by $96 in losses through gift attrition.

Losses were particularly high among first-time donors, a finding that supports my advice to the  organizations with which I work – the newbies and the more mature  – that they pay as much attention to back door traffic as who’s coming in the front.

Quoting the AFP study, “Growth in giving is increased both by maximizing gains and minimizing losses, and management and boards need to know this to make intelligent, informed, growth oriented planning and budgetary decisions.”

CONSIDER THE MATH

Continuing with the example of an organization with gains of 65% and losses of 55% for a net of 10%, increasing gains by 10 percentage points — from 65% to 75% — would double the net growth from 10% to 20%.

  • Reducing losses by 10 percentage points —from 55% to 45%—would also double the net from 10% to 20%.
  • A reduction of losses by 20 percentage points — to 35% — would triple the net to 30%.

In other words, showing a bit more love to the folks who’ve honored your organization with a first gift can lead to a second, a third, and from there to a long time relationship.

I’m not saying you should give up on expanding your donor base, but efforts to attract new supporters must (dare) not overshadow attention to those who’ve already said they care (at least a little). To be sure, donor stewardship is no less work than new donor acquisition, but the ROI is definitely better – for start-up organizations or those with a 100 year track record.

In the words of a poem from my long-ago Girl Scout days, “Make new friends, but keep the old. One is silver and the other gold.”

For more on donor retention, see:

Why a warm welcome to first-time donors matters

What part of thank you don’t you understand?

Put the focus on thank you, please

 

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