#1 Reason Donors Leave & Stay

There are a lot of different ways to start the process of attacking donor retention.
One way is to gain an

understanding of why donors leave your organization. Let's assume that for a large percentage it is the lack of communication, well that's easy we’ll just double our communications. But perhaps it's not about quantity,  possibly it is what you communicate, how you communicated and most importantly how the recipient emotionally reacts to that particular touch.

Building relationships of value requires a keen sense of a whole bunch of the complexities. It's easy to look at a chart and think donors leave because 18% of the time they don't receive a thank you. You can look at a statistic like that and assume we're in great shape we send thank you notes to everyone, But how do your donors receive your thank you? What reflection do your donors have on your thank you when you circle back and ask for the next gift? Do your thank you's evolve with the relationship?

Ultimately understanding some statistical elements as to why donors leave is a reasonable thing to be aware of, unfortunately it will not provide strong evidence of any one thing. However,  it is a piece of the mosaic dashboard you need to build in order to ultimately create your organization's knowledge compass.

To have significant impact on donor retention is going to require that every nonprofit examine the measures and metrics used to inform strategy. There is not a single tactic you can add that would significantly impact donor retention if you don't reimagine the institutional dashboard.

We are all familiar with the old saying regarding the definition of insanity. Doing the same things and expecting different results. However it is also equally insane to continue to do the same things and expect the same results.

 The number one reason donors both leave and stay is tied directly to the culture created by the organization.

The New Science Of Fundraising Metrics & Increasing Retention

Donor retention and measurement is an interesting conversation for any fundraising group to have. So often we gravitate to the linear aspect of measurement because it's easy to grasp. Southwest airlines several years ago decided to measure happiness a unique but highly impactful exercise. As an industry

we may be served extremely well not to throw in the towel so quickly on designing metrics around monetary transactions. Because with a little work we might be able to actually measure the right things and the things that will create the greatest impact to the bottom line that we wish to have. Now this is not to say that the money aspect is not critical to the business of raising money because clearly that is our purpose, however it is important to note that our success with the raising of money is directly related to the length of time our customers or donors choose to remain connected to our organization and our mission.

Another significant achilles' heel for our industry is that our metrics in general are short in nature. We measure items connected to how we are doing compared to last year,   interesting and important pieces of data to understand but they do very little in helping us understand the momentum that we are creating with the people we wish to remain connected to.  Many of the conversations today regarding donor retention revolve around renewing a gift. This consistent focus on the transaction of a gift is continuing to drink from the poisoned well that has actually caused the retention issues we wish to resolve.

I have spent my career studying and redesigning the process of fundraising to address this significant

issue of donor retention. What I've concluded is very similar to the theories that were demonstrated in the movie Money Ball. In a wonderful scene between Brad Pitt and Jonah Hill in the garage Jonah looked at Brad said baseball is archaic in its thinking. They are measuring all the wrong things. You shouldn't be looking to buy players you should be looking to buy wins, and in order to buy wins you need to buy runs.

Take that same logic and drop that over the raising of money. In order to raise money you actually need donors. To raise the most amount of money from those donors you need to keep them longer and have them feel that supporting your organization is adding value and quality to their life.

So what if  you measured major gift officers by looking at the individuals that they manage. What is the average length of time that their donors have remained on the books. Is that length of time increasing or decreasing. That's a linear metric connected to the sustaining of a relationship. Have their gifts for this pool grown over a period of time has it remained stagnant or is it shrinking.  To begin measuring performance around sustaining and deepening relationships with the people that organizations are strategically connected to will pay significantly higher dividends than the shortsighted metric of how many visits that you make this month.

If we focus on the transaction we will accomplish very little with building a motivated donor

Because:

 If you want to raise money you need to have donors.  If you want to have donors supporting you at the capacity with which they could give you need to have emotionally motivated committed donors. If you want to have emotionally motivated and committed donors you need to be measuring whether or not you are adding value to their life. One way to measure that value is the length of time they choose to remain connected in support of  your organization. Since donors typically do not lead with their best gift retention (length of time) matters.

Our traditional belief that measuring transactions will deliver the most resources to our bottom line have

clearly been proven to be inaccurate over time. As it becomes increasingly more challenging to connect with people in an incredibly crowded space we will need to rethink how we've been connecting with our donors over the last 50 years. If am continually surprised that the largest provider of software to our industry does not even have a method of giving you actual retention rates. If you do not know the average length of time your donors stay on the books today and how that relates to the length of time 5 & 10 years ago, then every strategy decision you make is unrelated to your organizations ability to grow strategic relationships.

If you are interested in this proprietary measurement tool or head here. What to dramatically increase retention with proven practices? check out the Donor Retention Boot Camp this summer.

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.