Re-Imagining How To Decrease Donor Retention

Just Adjust Donation Page

If you have never seen the movie Patch Adams see if you can grab it on Netflix in the next few days, or just watch it again. Today I was looking at a blog post about improving online donations. The point of the piece suggested that you focus on adjustments to the donation page and mixing up the dollar amounts that your prospective donors could give. While reading this piece I was struck at the traditional thinking that suggests it is best to focus on the stuff rather than person. This is where images of scenes from Patch Adams came drifting into my mind. We have over and over again focused on the transactional elements as a way of fixing or improving our support. This thinking has continued to lead us to incredibly poor donor retention rates, which ultimately translates into unsatisfied donors. Which = Lowering Lifetime Value

In the movie Patch was a medical nonconformist who believed that if you treat a disease you win or lose but if

Make A Wish Foundation

you treated the person you would always win. Our nonprofit industry can learn a lesson from both the results of our past instincts and from Patch Adams.

There is a completely other way to address the business of raising money. It is one that is human focused, with targeted specific outcomes and a model that has actually produced some of the highest retention rates in North America over the last decade.

The good news for the nonprofit idustry is there is a nation of donors waiting for their lives to be committed to causes they are incredibly passionate about and they also wish to share their enthusiasm with the world around them. The only thing standing in their way is decades of traditional thinking: as the gentleman in the scene below puts it:

“If you focus on the problem you can’t see the solution”

In the past week I have read that the solutions to our retention challenges and to increase giving is to focus on the timing of asks, increase the channels in which we communicate and make adjustments to our donation pages.  There seems to be a new industry developing on how to re-imagine or repackage  strategy to decrease donor retention.

#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 Art Of Donor Retention

I just got back from the AFP conference in San Diego. Great energy, 4000+ people and it was wonderful to see my good friend Bob Carter leading many of the general sessions. The exhibit hall was overflowing with lots of companies doing some fascinating and interesting work. Donor retention has certainly become a hot topic and there were many  companies demonstrating their new tools to help address this challenging problem facing the nonprofit industry.

Here's the rub: the key to successfully addressing donor retention is not really about a tool. Having tools that provide you the information to make good decisions is critical but the fact is the way we have thought about fundraising needs to shift.

You could give me a Stradivarius violin but it would be useless in my hands unless I changed significantly so that I could use such an instrument to its fullest potential. When my team and I created a new fund-raising model that produced almost 300% increase in number of donors and increased donor retention at the same percentage Facebook had not been founded. We did not have anywhere close to the connection tools as we do today. Yet with all our ability to connect our retention rates continue to plummet! 

There is a significant culture shift that needs to take place within an organization in order to successfully increase donor attention. At the core of this shift is a new methodology of measuring what is successful in the business of raising money. The New Science Of Philanthropy has developed such a dash board from proven techniques that dramatically increased donor retention rates and exceeded capital campaign goals by 180%.  In the marketplace today you'll hear all sorts of suggestions about stuff to do to a donor in order to keep them. There's one simple key to turning around or understanding how to impact retention and that is you simply have to rethink what is. 

We have built an industry around measuring a single monetary transaction, yet we

speak a language of transformation with the most critical element being the quality of the relationship. I would suggest that there is not a single relationship in your life that is of significant value or meaningful because of the number of times you are called, taken to lunch or the average length of time each visit lasts.

There are multiple layers to creating a successful culture that can impact the quality of the donor experience. It begins with organizations understanding that in order for donors to desire a meaningful connection to an organization's mission, the organization first has to to create an extraordinary environment in which their employees can create such an experience for themselves. Seth Godin refers to people making their art. Donor retention starts with a nonprofit culture understanding that they are a blank canvas on which donors paint and create a life of significance and meaning.

How Are You Measuring Belief?

I woke up early this morning in San Diego getting ready to hit the AFP conference in a few hours. During the plane trip from Tampa to San Diego I had time to read my good friends new book The Business of Belief. It was timely for this conference because Tom's book is incredibly focused on the elements that are important for the nonprofit industry if we are to have an actual impact on donor retention. I've read so many articles recently about donor retention that simply suggest a checklist of things to do in order to keep your donors longer. I even read one place where someone suggested that you make the second ask sooner. Focusing on the transaction is precisely the reason our national retention numbers are what they are. Having our measures focused on short-term transactions requires our donors to suffer the consequences along with the negative impact to our bottom line of losing them or just not tracking our ability to keep them.

It's amazing how we have tried to boil donor retention down to a checklist of things to do to the donor.

I was reminded while reading Tom's book that each of us has our own personal narrative that we aspire to. In order to improve donor retention throw away the checklist and stop focusing on the transaction and begin to understand the personal narrative your donors are building for themselves. Each of us wish our lives to be of value and that we will leave this world a little bit better than the way we found it.

Nonprofits have the remarkable position to be a platform for our donor’s stories. Our bottom line is changed lives. My suggestion is that you rethink lists, the assumptions and realize that our purpose is to create purpose. To accomplish this requires a new set of measures and a new organizational structure. My friend at the Disney Institute who speaks eloquently on the topic of creating a powerful culture reminded me recently how critical this element is to overall fundraising success.

To capture the impact of belief and emotional momentum in our metrics requires a significant shift in how we have looked at the business of raising money. If you are interested in seeing another model stop by booth 718 @ AFP ICON and let's talk because we're holding the opportunities for the extraordinary stories our donors wish to create.

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.