Do Your Internal Systems Create A Culture Of Happiness?

Those of us in the nonprofit world have to admit, we just missed it. There are lots of reasons for this, along with future blog posts, but it is freeing to say we just didn't get it. Hop on to amazon and search for books on how to be happy, or just do a google search. As it turns out happiness is kind of a big deal, we all wish to do something of value and that at some level our life matters. These are pretty basic things. I mean who does not wish to have their time on this earth matter? And the other cool thing is when we do something that makes us happy, we tend to do it again and again.

Mihaly Czikszentmihalyi has long been a leader in studying why people are happy. In his book Flow, he helps the reader decipher how we acquire meaning, purpose and happiness in our life. The list of items almost directly align with the reason so many nonprofits exist. Being of value to others, sense of purpose being part of a greater good.

At the end of the day nonprofits exist to change lives. Not only can nonprofits change the lives of the people they serve but if the scientific studies are accurate they also have the power to change the lives of the people who invest in the mission. However, our national statistics suggest we never really accomplish the latter. Our industry stats point out that we never really keep donors long enough to impact their level of purpose or happiness. Without those triggers,  Czikszentmihalyi suggets people do not reach a place called flow. Designing a "flow' like experience for donors is a key aspect in creating a stewardship strategy that actually retains donors.  Designing a culture to deliver a flow like experience can not be attained by looking to our past or current "best"practices. This will require a rethink of how things have always been done.

This is a big topic and one that will be explored in great depth and with concrete take aways at the Donor Retention Bootcamp. It is interesting to note that part of our long term answers may be found in the design of games. Author Jane McGonigal begins to unlock a key ingredient to long term retention in her book "Reality Is Broken".

Could The AFP Study Suggest The Failure Of "Best Practices"?

It seems like every week I read the phrase somewhere in the volume of nonprofit writing I connect with about “best practices” It is a peculiar piece of lingo for our sector of the economy.  If you have read the recent AFP fundraisingeffectiveness report you clearly see that it might be hard to find any best practices among the organizations they studied to create this report.

If nonprofits are losing donors at the rate suggested in the report then exactly where is best practice? This is not a new question for me.In 2001 I purchased the domain designthedonorexperience.com. For my team, at the time, this site and the images posted became a symbol of what our advancement effort was going to be all about. We were extremely focused on retaining the donors that were generating 90% of our yearly revenue. While our peers focused on participation and other short-term measures we focused on customizing the donor experience and extending the lifetime value of our key supporters.

Our quest for understanding customer service took us to the Disney Institute to experience what real donor management should look like. We ignored, what was then considered, all the “best practice” we could because those conversations were not at all about the donor.  Donor centered metrics are difficult to find.Run through your head the current measures you have in place in your shop. How many are tied directly to donor satisfaction or for that matter what is yourcurrent donor happiness index?  A recent book on measuring nonprofits does not include a single metric tied to donor longevity or their emotional propensity for continued support.

What is your donor (customer) retention?

The AFP study is a significant wake up call for ourindustry.  One of the many Peter Drucker quotes I appreciate: “Every business model reaches a point of diminishing returns”.  It appears, from this study, we have arrived.  

Make 2013 the very best for your very best customers or donors!!!

Back To The Future

I have been reading a lot lately about the importance of retention. Some one recently posted a blog about some incredible information coming from a person with the title "scientist" who is a vendor to the nonprofit sector. The scientist stressed how critical it is not to focus all your attention on acquisition of donors. A compelling case for today's market as it was equally compelling in 1975. The math is simple, we renew each year more than we acquire. Traditional fundraising of course not disaster relief efforts.

Wow Institute

There is a bunch of noise in the market about tools that will rescue us from our own ineptness and completely fix the very real retention issue demonstrated by the recent AFP Effective Fundraising Study. It reminds me of the hammer salesperson who sees the solution to every problem as another hammer. Great customer service is the by product of a mind set. It can not be manufactured with a tool. Putting the world's best scalpel in my hand will not make me a great surgeon. Today there are people talking about retention and providing advice that have never executed strategy that resulted in increased donor retention. Sort of Bernie Madoffs of philanthropy.

If you seriously want to wrap your head around impacting retention please know that it has nothing to do with tools.  It is driven by creating a culture of service and a good old fashion understanding of  exactly who the customer is you can't live without, and then making sure you keep them.  In 2001 I took my advancement team to Disney to learn about customer service because Disney had the highest repeat customer metrics of any industry. We could not learn about retention from the standard fundraising conferences available. In addition we could not embrace the current "best practice" metrics because these metrics have actually produced the dismal results in the recent AFP survey.

The above gaps led a group of us to create the wow institute over a decade ago, it was designed to put the donor at the center of the conversation.  Today The New Science Of Philanthropy delivers a set of metrics never before discussed in best practice circles but proves, in a linear manner,  there is a better set of questions that exists to build a sustainable fundraising initiative. It would be great to hear from any of the old Wow folks who experienced a week in the mountains of New Hampshire to let us know what their perspective on donor retention is now that their wow experience was a decade ago!

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.