It’s not a gift, it’s a vote of confidence.
Terry Richey
Today, there are 1.5 million nonprofits competing for the attention of donors. Giving a donation is a signal of interest, and act of trust, and a vote of confidence. The second gift is even more so. Yet many fundraising organizations make the assumption that once a donor, always a donor, and invest their resources in acquiring new donors rather than stewarding past donors.
Our recent posts have been examining the “five dimensions of funding” as a way to challenge assumptions on how we invest fundraising resources to assure we get the best results. In this series, the fourth dimension is “renewal” or the ability to earn repeat donations from the same donor.
The renewal rate of donors may be one of the most important ways to measure the health of a fundraising program. Yet, it is also often overlooked. With the exception of “retention” rates for direct mail donations, the renewal of donors is far in the background of what is measured by most fundraising teams. In our experience, we see four common causes for this. Do any of these apply to your organization?
1. Lack of reward for stewardship
Fundraising managers often look at stewardship of a past donor as an ”expense” rather than an “investment” based on the urgency of getting new gifts in the door today. But the door works both ways opening the opportunity for the recent donor to find a more appreciative organization.
2. Valuing “capacity” over “affinity”
Often we look at donors as having two attributes to determine our time investment in cultivating the next gift. The first is “capacity” which is simply how much might the donor have available to give. This is the measure that wealth screenings provide. The second is “affinity” or how connected is the donor to your organization. This can be scored as well based on length of relationship, type of gifts, frequency of gifts, engagement in organization events, etc. But it is rarely given the same value as capacity or scored at all. A significant error.
3. Under-investing in “share of mind.”
Donors are hungry for information about their areas of interest and presumably, if they gave to you, your cause is one of those areas. So when there is information in the news about your cause, even if it does not relate to your nonprofit directly, it is a great time to communicate with your donor. Whether that is the release of new poverty statistics, a change in ocean temperatures, or an appropriation from Capitol Hill, you need to link your cause to what is happening in the larger world. Doing that will help increase your “share of mind” with the donor and increase the probability of future gifts.
4. Mistaking gifts from assets as gifts from income.
Donors who give from their income are far more likely to give smaller and more frequent gifts. Donors who give from their assets, (such as by selling stock), are far more likely to give larger and less frequent gifts. Not appreciating that cycle is fraught with peril. We’ve often seen a donor provide a large, sacrificial gift from assets and then be virtually accosted for another gift just a few months later. Donors can obviously give both types of gifts and the great fundraiser knows when the time is right for either.
Interested in more perspectives on the dimensions of funds? Previous blog posts explore other factors of fund development including time, scale, and adaptability.
Visit our website (www.TimberlineStrategy.com) and download the “Five Dimensions of Funding” tool we use to help nonprofit leaders shape their fund development strategy.
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