It's the million dollar question: What drives donor loyalty?
The topic of donor loyalty has been studied by numerous academics and consultants for many years. In his book Retention Fundraising: The New Art and Science of Keeping Your Donors for Life, Roger Craver published the results of a fascinating survey.
Craver had 250 nonprofits poll their current donors with the hopes of finding out why they had remained so loyal. Each donor was given a list of 32 reasons why they might keep donating to the organization, and they were asked to rank them by order of importance.
Let's take a look at some of Craver's findings.
First things first: Why does donor retention matter?
The truth is that the vast majority of the nonprofit sector is caught on an acquisition treadmill. As donors lapse, fundraisers attempt to bring new donors in through the door. The problem with this strategy is that retaining a donor is much less costly (and more fun) than securing a new one.
According to the Fundraising Effectiveness Project, a collaborative effort between the Association of Fundraising Professionals and the Urban Institute, the median donor retention rate for the sector hovers right around 40%. This means we lose about 6 out of every 10 donors. The news is even worse for first-time donors, who are typically retained only about 20% of the time.
Keeping this in mind, let's take a look at the top seven reasons that a donor keeps giving:
1. Donor perceives your organization to be effective in trying to achieve its mission.
2. Donor knows what to expect from your organization with each interaction.
3. Donor receives a timely thank you.
4. Donor receives opportunities to make his or her views known.
5. Donor is given the feeling that he or she is part of an important cause.
6. Donor feels his or her involvement is appreciated.
7. Donor receives information showing who is being helped.
What's the common thread among these data points?
If you were to search for a common thread among all of these data points, you could argue that it’s donor communication. How you communicate with a donor, particularly right after the gift is made, is the basis for the relationship going forward. Regardless of giving channel, gift size, and gift frequency, all donors want to feel appreciated, know their opinion matters, and know how their gift is used. They want to be active participants, not just ATMs.
Luckily, your online donors may be the easiest to communicate to, but online gifts are often generated by low-cost, non-personal interactions. Unfortunately, our gift acknowledgements tend to be just as impersonal. This means that even if you get a first-time gift online, the chances of you retaining online donors may be even lower than 20 percent.
When you combine those reasons with the fact that most of the initial follow-up processes can be automated, online donors are an excellent segment of the donor database to test and optimize your gift acknowledgement and stewardship practices.
It all starts with your donation page. Retention starts even before online donors make their gift.
Even if your donation form converts a visitor, the information you collect from them can mean the difference between loyalty and attrition.
In closing: What do donors want?
Digital donors want what all donors want. They want to feel valued, assurance their dollars are well spent, and that the organization they support truly does good in the world.
So, if you heed Craver's insight and make an effort to adjust the way you nurture your donors, you’ll see results in the form of enhanced donor satisfaction and loyalty among your digital and online donors.