For several years now, fundraising consultants and researchers have sounded the alarm about sorry donor retention rates and it seems all the noise has had some effect. Donor attrition has evened out at around 105 donors departing for every 100 new and returning donors added to charitable giving rolls. Hardly the best of news, but better than what it had been.
By and large, fundraisers have become more adept at every stage of the donor development cycle, from asking, to thanking, to reporting via storytelling, to asking again. Or so has been my observation.
However, much of what encourages donors to stay (or to leave) is beyond the scope of the development team. Frequently, donor retention is simply the “canary in the mine” – an early alert that the organization has a serious problem(s).
It’s important, then, that leadership regularly scours the organization in search of systemic issues standing in the way of fundraising success. (Read here for examples of internal roadblocks.) There should also be strategies in place for checking public perception of the mission, methods, and reputation of the organization. A nonprofit can be well down the road of decline before the folks inside notice that constituents have lost interest in the cause, lost respect for the work, and/or lost trust in the organization and its leadership.
As Chris Zook warns in Unstoppable, “this sort of perception gap suggests that companies [nonprofits] are likely to react too slowly to circumstances . . . or they may realize too late that they need to re-examine the fundamentals” of how they do business. Returning to the canary metaphor, it’s amazing how many birds have to die before board and staff take notice, and how many more beyond that before there’s action.
One thing is certain. When faced with one or more of the three issues – loss of interest, respect, and/or trust – simply shouting “more fundraising” won’t do.
SO WHAT SHOULD NONPROFIT LEADERS DO IF . . .
the world has moved on? For we organizational folks who love our causes, it’s a tough pill to swallow when the community you’re seeking to serve no longer sees what you do as needed. But change is the one sure constant of life. As Charles Darwin wrote in On the Origin of Species, it is not the strongest that survive, but the most adaptable to the environment.
If leadership determines that the mission simply can’t be adapted or that the problem at the heart of the organization’s founding has been solved, it’s better to close up shop gracefully than to hang on through a slow and painful death. You’re not leading (or serving or solving problems) if no one is on the journey with you.
the brand has been diminished? I’ve yet to meet a board that doesn’t think their organization is doing a bang up job. But truth be told, there’s too much settling for mediocre in the nonprofit community – including on the part of organizations with a faith-base. The giving public, however, isn’t as easily fooled as board members. Donors are quick to separate the average from the good or great.
Organizational leaders need to be ready, willing, and prepared to receive and act on the candid assessment of clients, donors (current and potential), and peers in the field. All the more so when God’s name is on the line. As you may have heard said, holy shoddy is still shoddy.
promises have been broken? Hardly a month goes by without a story in the local or national press about a slip-up by a nonprofit leader. It can take years for an organization to recover from a moral lapse, illegal action, or harm to clients. When organizational leaders try to hide the mess or worse, lie about it to the public, the fall-out is even more long-lasting.
We can wish (even pray) for grace on the part of donors, but once disappointed, supporters are slow to return to the giving fold. If an organization is guilty of breaking trust, the board must confess, apologize, and commit to making things right. It’s up to the board to guarantee the organization’s worthiness to receive the goodwill and gifts of those with whom and on whose behalf it serves.
When it comes to donor retention, interest, respect, and trust are all essential. Without these three, everything else is as noisy gongs and clanging cymbals to donor ears. Who would want to hang around for that?
For more on donor retention, see:
Finder/keeper beats loser/weeper, every time
When building a donor base, watch the coming in and going out