The odds are pretty high that once in a while, you will get a message or a call from someone you haven't spoken to in a long time—perhaps even years, out of the blue. No time is wasted on asking how you are, rather they ask for a favor first.
It happens quite a bit to all of us, and it's not like you won't be happy to help; in fact, you would help simply because you care and want to lend a hand. Regardless of the reason why, you will still have that little feeling in the back of your mind that leaves you a bit less excited to hear from them because after so long not hearing from them, there is suddenly something they need from you. It may even feel like no sincere interest or appreciation was even communicated properly.
Well, this is exactly what your donors feel when you do not communicate regularly, only to ask them out of the blue annually to help by making another donation. Simply put, this comes across as showing a lack of gratitude after not re-engaging with your donors in a while.
Donors, like everyone else, respect effective communication from the organizations they choose to support. About 60-70% of new donors will not give again the following year simply due to a lack of communication from the nonprofit. Without the nonprofit showing value by letting the donor know they are grateful, a donor will put aside any future requests. Without consistent and stable donor retention donations, a nonprofit will have trouble doing the most basic of budget forecasts, leaving the organization in a cycle of potential peril each month.
Why donor retention is vital
- Retaining donors is cheaper than re-engaging forgotten donors or attracting new ones.
- According to research, acquiring a new donor using donation letters as an example, costs ten times more than it does to keep a donor. If your strategy for fundraising includes only methods to attract new donors, you won't be making the best use of your resources. Your donor database is a major source of known benefactors.
- Small contributions can add up to greater lifetime value.
- Let's assume you're running your nonprofit like a business. You should know by now what your spend is to acquire a single donor (DAC or Donor Acquisition Cost). It may cost more upfront to get the donor's first contribution, but compared to the lifetime value they provide, it automatically justifies the initial cost.
- The majority of major gift-giving is committed to after five years.
- In a recent report by Major Gift Fundraising, a single major gift can surpass all other contributions for the year. This is the same for every donor percentage-wise. When the relationship has been built and cultivated with care, asking donors for further donations is made so much easier knowing that the communication has been open, regular, and with written sincerity each time.
Positive reinforcement drives retention
Let's look at two ways to send a donation request email to a donor who contributed a year prior. In the first example, an email is sent out explaining the organization and anything new happening in the past year. There is a request for a donation and a thank you in advance. Very polite in all, very typical and regular.
In the second, we see the donation request letter received by the donor with a "Happy Anniversary," celebratory tone:
"Happy one-year anniversary to your last donation! This time last year, you became a member of a larger movement helping to change the narrative on helping families coming from (country here). We wish to take the time to thank you for supporting our mission to (mission summary here). Your donation helped us fund important programs, including settlement support for refugees. Thanks to your generosity in contributing, we brought 112 families to safety and freedom. But that's not even all—YOU also helped them thrive in their new lives and reach their full potential. Thanks for being so awesome!"
In this example, no official request for a donation is made, simply a donation button located just below the paragraph.
Surprisingly, the second donation request letter template was the one gaining a larger donation per recipient average of the two sent. So why was the celebratory tone more effective? Why is celebrating a lack of contribution as a good thing?
Well, psychology tells us that we're better off celebrating your donor's previous donation than trying to pull this year's donation out using traditional methods.
In a study done on the role of self-perception and motivating moral behavior, participants had to think of past good deeds they have committed and to perceive themselves as moral "do-gooders." They gave twice as many charitable donations than those who were asked to recall bad deeds.
So, by positively reinforcing a donor's past positive support, a connection is made between the previous positive donation and the opportunity to make another positive contribution. This, in turn, becomes more meaningful as it becomes more personal, making future donations more likely to reoccur.
By providing regular updates to your donors between fundraising campaigns, you will have built a great foundation and talking points for each interaction with them. They will definitely be more inclined to respond to donation requests from someone they know now rather than that long-lost contact who came to ask favor after a long while away. At this point, once you've determined what "regular" contact frequency looks like, you won't come across as someone who is interrupting their day.
Positive reinforcement can most assuredly be an effective and common-sense solution to keeping your donors close rather than having to spend more trying to chase them every year to support your program and encourage growth.