Have you ever gotten so deep into a subject that you can’t recall what brought you there in the first place?
The concept of behavior-based donor relations has been buzzing around the industry for a couple of years now. So, for those who are new to the space or just can’t remember why everyone’s so excited about this, the practice is rooted in the Retention Revolution. Let’s zoom out and examine this methodology with fresh eyes.
Looking Further Upstream
Organizations always want to raise more money to support their missions, and for years, they thought the answer to getting more dollars was getting more donors.
Spoiler alert: it’s not.
The most efficient and effective way to get more dollars is keeping donor retention front and center.
The best tactic to increase our donor retention rate is behavior-based communications.
Fundraising 101
If you’ve ever been to a donor relations conference anywhere in the history of ever, you have likely heard the “leaky bucket” metaphor.
Not ringing a bell?
Let me whip out my DRG dictionary to give you a brief rundown.
Retention = Keeping donors 👍
Our loyal monthly donors impress with a 90% retention rate.
Unfortunately, the average retention rate for repeat donors is 60%. The first-time donor population is
threatened to extinction at a mere 23% retention rate.
Ideally, we want more loyal donors like our monthly donors, but how do we get there?
Acquisition = Getting new donors 👍
This is how many new donors you get in the door, and we like getting donors in the door.
Attrition = Losing donors 👎
This is how many donors walk out the door, and attrition is often the result of a donor giving a one-time test gift but not feeling compelled to give again.
Understanding Attrition
Don’t know your attrition rate? Here’s the simple formula:
Once you know your attrition rate, you can use the chart below to get a ballpark idea of how many of these donors will still be giving after five years:
I don’t know about y’all, but I’ve yet to come across a nonprofit that can afford to keep losing donors, especially at these rates.
This is helpful information, but let’s drill down further into your data. Of the donors you lose, how many years after their first gift do they start dropping off significantly?
Some organizations experience a drop at eight years after a donor’s first gift. Others at year three. Let’s call this the Attrition Point.
What’s yours?
This likely points to a gap somewhere in your communications timeline.
For example, let’s say your donors begin rapidly dropping like flies six years after making their first gift to your organization, perhaps it’s time to consider a Giftiversary piece dropping at year five.
The Pattern
Here’s something we’ve noticed: when organizations make acquisition their priority, their retention rate usually drops. That, of course, means their attrition rate increases.
It is illogical to continue this model when it costs 5x more to get new donors than it does to keep them.
Yet, we ask and ask and ask and ask and maybe thank and ask then thask…
You get the picture.
The attrition rate table above reveals a critical insight: focusing primarily on acquisition is a race to zero.
Instead, pivoting our strategy towards nurturing existing donors is the recipe for sustainable fundraising.
A wise major gift officer once said, “Your best prospects for tomorrow are your current donors today.”
When you have a donor who has given $50 in the last five years, that’s not just a $50 donor. That could be your future $1,000,000 donor.
So how do we keep our donors? Honestly, it’s pretty simple: increase the quantity and quality of stewardship touchpoints.
Increasing stewardship increases retention, which ultimately results in dollars in the door.
Stewardship That Values Actions > Amount
To stem the tide of donor attrition, we need to focus on the donor’s behavior rather than the amount of their gift.
Here’s what we mean by donor behavior:
Loyal donor
First-time donor
Giving day contributor
Emergency fund supporter
The consulting firm, Gartner, shared an article on loyalty programs in February 2023. While their insights were framed in a context of for-profits, there is overlap and application for our industry. Whether you’re a non- or for-profit, what remains the same is building loyalty– building loyalty is the key to driving repeat business, increasing profits, and developing a consistent base of long-term satisfied donors.
The perpetual income stream precipitated by donor retention is the holy grail nonprofits should be chasing.
And what did Gartner say the key was to loyalty? Personalization.
Personalization can go beyond using the donor’s name and tailoring impact stories based on the designation.
Here are examples of how we can personalize what and when communications are sent to more deeply engage our audience based on their behavior:
Loyal Donors | Giftiversary piece one year before the org’s average Attrition Point |
First-time donors | 12-month honeymoon period (no solicitations) and instead send at least one touch per quarter |
Emergency Fund Donors | This is impulse philanthropy—emotional and urgent. Communicate impact immediately and with the same emotion that motivated them to give. |
Giving Day Contributors | Generate videos, handwritten notes, and social posts in real-time while volunteers are engaged |
The Verdict
Like seekers of the grail, organizations prioritizing donor behaviors are embarking on a quest for the ultimate prize: converting one-time supporters into lifelong advocates.
This approach is truly revolutionary. And this new era of personalized engagement isn't just ideal—it's essential to our organization’s survival.
Adopting this mindset is the only way to raise money responsibly for our causes. Churn-and-burn is out. Sustainability is in. So let’s begin communicating with our donors in the language and channel that attracted them to our organization in the first place.
To see this in action, take a look at some samples from our DRG Heroes:
Now that we’ve viewed this subject from space, do you think behavior-based stewardship is all hype or holy grail?
Want to learn more about Behavior-Based Donor Relations? There are just a few seats left to join in us in Atlanta April 22-24, 2024!
