Donor Retention

Reblog…Donor Retentioin…great article from NPQ. Read the entire article at:

Overall, a brief review of the literature suggests a number of actions that nonprofits might take to improve donor loyalty:

  1. They should begin by developing an understanding of the economics of loyalty, and thus identify for themselves the difference in the lifetime value of the fundraising database that would be garnered by achieving small improvements in the level of donor loyalty achieved (1 percent, 2 percent, 5 percent, etc.). This is essential if staff and board members are to understand the rationale for an enhanced focus on loyalty, and “buy in” to the process necessary for this to become a reality.
  2. Perceptions of the quality of service offered to donors are the single biggest driver of loyalty in the fundraising context. Organizations should therefore take steps to measure the quality of service provided by their organization and improve on those areas where weakness is detected.
  3. Organizations should think through and, ideally, conduct their own primary research program to understand why donors support their organization, or, more specifically, from which aspects of the organization’s operations (or fundraising) individuals derive the most value. Value can then be engineered that directly reflects and satisfies donor motives for supporting the organization.
  4. Allied to the above, nonprofits should consider how and under what circumstances they might contribute to a donor’s sense of self-identity. Are there circumstances where a donor would be likely to start defining him- or herself, at least in part, through his or her support of the organization? Donors may, for example, derive value because they identify with aspects of an organization’s brand or personality. These aspects may then be emphasized in communications.
  5. Allied to the above, organizations should give greater thought to the labels they append to donors in their thank-yous and other communications. Donors can be persuaded to adopt an identity if it is fostered consistently over time and reinforced with credible messages from a credible source.
  6. Nonprofits can seek to build donor commitment to their cause by considering each of the determinants we alluded to earlier. They can:
    • Clearly articulate their organization’s values.
    • Make clear to donors the difference their support is or has been making and therefore the consequences to the beneficiary if they were to withdraw.
    • Consider the “journeys” that they will take supporters on through ongoing communications. This might be as simple as considering what “a year in the life” of each category of supporter might look like, or it may be more sophisticated, looking at how each segment of donors will be educated about the cause (and bought closer to it) over time.
    • Allied to the above, consider ways in which donors can be actively encouraged to interact with the organization. In the electronic environment, for example, this is relatively easy. Supporters can be asked to sign up for specific forms of communication, to offer recommendations or suggestions, to take part in research, to “ask the expert,” to campaign on behalf of the organization, to “test” their knowledge in a quiz, etc. The more two-way interactions that are engendered, the higher the level of loyalty achieved will be.
  7. Similarly, organizations should seek to foster trust by considering all of the antecedents alluded to earlier. An organization can:
    • Demonstrate to the donor that it has exhibited good judgment in its dealings with beneficiaries, its stewarding of organizational resources, and, where applicable, its approach to campaigning.
    • Stress that it adheres to appropriate standards of professional conduct. Ensure that all outward-facing members of staff receive appropriate training in customer service.
    • Design and instigate a complaints procedure so that individuals who wish to can take issue with the quality of an organization’s fundraising or approach.
    • Communicate the achievements of the organization and, where possible, relate these to the individual contributions made by individuals or segments of supporters.
    • Ensure that all promises made to donors are adhered to and, critically, seen to be adhered to.
  8. Consider the development of regular or “sustained” giving programs. Levels of attrition are much lower than those achieved in traditional annual giving. Younger donors are also significantly more comfortable with regular giving than their older counterparts, so offering regular giving, particularly as an online option, will greatly reduce the level of attrition experienced.
  9. Evaluate the continuation of activities that lower loyalty, such as list swap programs. Managers need to assess the impact on donor lifetime value rather than looking at the short-term attractiveness (i.e., return on investment) of such programs.
  10. Consider the creation of donor welcome cycles. E-mail and mail versions of these cycles should be considered. Newly acquired donors should be exposed to a differentiated standard of care while their relationship with a nonprofit develops. The historically strongest recruitment messages would likely be the most effectual components of such cycles.
  11. Finally, those organizations seeking to facilitate higher levels of loyalty would be advised to maintain regular contact with their donors, researching ongoing needs and preferences. As a consequence of this research database, segmentation can then be regularly reviewed and updated as necessary. It would also be helpful to conduct regular exit polling of lapsed supporters to identify the reasons that predominate for this behavior. Corrective action can then be taken where possible.”

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