Sunday, October 14, 2012

That Is Not Retention

Recently on a LinkedIn discussion in the CASE group there was a fairly typical discussion regarding the retention of donors. It started off as a loyalty thread, which is a topic I look forward to addressing here in the very near future. At one point an individual stepped up to outline the significant success his program had at moving retention from 67% - 70%.

Introducing The New Science Of
Philanthropy in San Francisco last month
First, what is the logic of measuring retention in a percentage? Let’s take the higher number as a quick example. If you kept 70% of your donors that means you are losing 30%.  A next logical step is to stretch that out over time, you would go through 100% of your donors in 3.33 years.  In the business of building and sustaining relationships our questions need to be based on longer-term outcomes.

Measuring a year over year retention rate as a percentage will only hurt your ability to actually do what you want to do. In the above scenario the 70% does not hold level for multiple years, as a result the loss of donors accelerates. The above LinkedIn member’s donor base is most likely barely surviving 3 years on the books.

Founders New Science
I will go much deeper into retention on this blog but let me suggest that retention is measuring by years. Example: ten years ago our donors remained on the books 2.5 years. Today the average length of time a donor remains is 4.28 years.  Now that is a 71% increase in donor retention.

The New Science Of Philanthropy currently has a patent pending on a proprietary dashboard technology that for the first time assists organizations in building strategy for actual retention results. It will impact social media, communications, stewardship and acquisition.

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