Mon, February 04 2013

Why donors stop their support

Katya Andresen's avatar

Author, Robin Hood Marketing

Filed under:   Fundraising essentials •

I recently hosted a guest post by Jay Love on the great donor exodus.  He covered how to determine how many donors you are keeping - and losing.  Today, he’s back with another guest post to discuss WHY they leave.  Please share this post, because understanding why donors quit is the first step to getting them to stay.  The author, Jay Love, is the former CEO of eTapestry.  He is currently CEO of Bloomerang and SVP of Avectra while serving on numerous local and national nonprofit boards.

By Jay Love

With the extreme importance of the topic my title introduces, you would think there would be a large amount of research and hundreds of articles about it.  Unfortunately, that is not the case.

The cornerstone of support and funding of most charity causes around the world is a dedicated group of loyal supporters.  For smaller charities, this may be less than 100 people including the board of directors.  Larger charities rely on the support of thousands of multi-year supporters from various channels. 

How in the world then could this phenomenon of “loyalty to a cause” not be studied as much, if not more so, than the fuel economy in vehicles or weather patterns in Antarctica?  Should not every charity in the world know what causes sudden or the not so sudden departure of its loyal supporters and design methods or systems to alleviate those causes?  My previous guest blog post for Katya outlined how even a small 10% improvement in donor retention could double the lifetime revenue stemming from your donors in your database.  Therefore, the incentive should be there!

As I did in my previous post, I am going to compare research pulled from the commercial sector.  In this case, we will look at why a commercial customer leaves.  Are there parallels to the reasons why donors leave?  Can the immense amount of research compiled by commercial business on this topic and more importantly the systems designed to reduce the likelihood of those reasons happening be copied in some manner?  My answer is yes!

Notice the comparison of reasons in the Nonprofit Donor Loyalty Primer below. (Problems viewing this infographic?  Go here.)

bloomerang image

The research is pulled from our chief scientist Adrian Sargeant and from The Rockefeller Corporation 

Although both sides of the image show why the customers or donors are heading to the exit, there is a higher percentage based upon the ability to financially afford on the donor departure side.  This is not surprising since supporting a nonprofit is discretionary compared with purchasing food or paying for lodging, transportation, clothing, etc. The biggest lesson for nonprofits, which rely on donor support for all or some portion of their operating budget, is how vital proper communication processes and messages are.  Notice how the following items add up to 53% of the reasons why donors leave:

1. Thought the charity did not need them 5%
2. No information on how monies were used 8%
3. No memory of supporting 9%
4. Never thanked for donating     13%
5. Poor service or communication     18%

Just imagine what a solid communication plan built upon a top notch CRM/Database solution could do for each item above.  Since loyalty is based upon strong relationships and relationships grow via proper and regular communications, efforts in this area can provide huge upward surges in loyalty and financial support!  What do you think is it worth the extra effort here?

  • Comment: (25)   

Comments

Interesting analysis providing helpful insights that remind us how important it is to over-communicate our appreciation.  Any more recent data to support this thinking?

Posted by .(JavaScript must be enabled to view this email address)  on  02/04  at  10:13 AM

I am always skeptical that lists of “reasons” like this are accurate because they usually come from multiple choice survey questions which enable the respondent to mindlessly check a box, instead of giving the real reason.  But I’ll give the Rock Corp a pass on that…

However, it seems that this list comes down to a single broad cause: lack of engagement. While better/more outreach can be a solution, everyone is saturated with being outreached to, and the problem is less reaching out than it is being reached to. In other words, I’d guess that the reason donors leave has more to do with the org losing relevance in their life because they are not engaged with it enough to stick for the long term, and something better will come along.

Getting donors to be more involved/engaged would certainly blunt most of those “excuses”. But obviously the problem is trying to create rewarding engagement time in donors’ busy lives. Pursuing the CRM “arms race” to better hassle donors is unlikely to increase engagement and relevance. I think the solution is engagement, and thinking about different, non-traditional and creative ways for that.

www.whatsupatwork.com is our effort to engage volunteers across an organization in an easy, interesting and frequent way to increase their visibility and appreciation, which rubs off on others.

Posted by .(JavaScript must be enabled to view this email address)  on  02/04  at  11:01 AM

Thanks for sharing this blog post, Jay and Katya. I agree with you that all of these reasons are about the donor’s perception of the organization. Managing that perception is definitely the job of the communications team. If we do our jobs well, then people continue to feel that we are grateful, and using their money as wisely as possible, but at the same time still strongly in need of support. That’s the magic balancing act, right?

I’m curious to see more information about the data underneath the pretty graph. As near as I can tell from some web digging, it comes from a piece published by A. Sargeant in September 1999, in a publication called “Professional Fundraising”.  But I can’t find an online reference to that publication. Journal? Magazine? Book?

Perhaps you can give us a little more background on the study. Was this data collected from lapsed donors? What was the sample size? All from one organization, or a variety?

thanks again…

Posted by .(JavaScript must be enabled to view this email address)  on  02/04  at  12:27 PM

@Chris:

Best. Comment. Ever!

Posted by Glenn  on  02/04  at  01:33 PM

Hi Jay,

Thank you for the very insightful post. Providing great customer service is key to any business, nonprofit or for profit, but many don’t hire right or train their staff. Simply following the golden rule and treating people how you want to be treated, along with your idea of a solid communication plan, is a recipe for success.

Yes. It is worth it and nonprofits owe at least this to the people and animals they are working to help. Thank you. Kirt

Posted by Kirt Manecke  on  02/04  at  02:51 PM

Your source is correct Alex, I will check with Adrian to see if he can add further background color.

Posted by Jay Love  on  02/05  at  09:08 AM

The analysis is wrong- the total percents on the reasons for not donating add up to over 100% thus respondents were able to mark off more than one reason. As such if 54% stated they could no longer afford 53% could not be ebecause of poor communication. It is possible that the poor communication reasons overlap and that far fewer are not donating for that reason especially since 70% of the survey are in the dead or can’t afford category! So there needs to be a more detailed analysi of the dats

Posted by George Hagenauer  on  02/05  at  11:26 AM

The data is drawn from a study of around 20,000 lapsed donors to 20 nonprofits - 10 UK and 10 USA. A variety of causes are represented. It was published in an academic journal and in my two fundraising textbooks.
They are all key factors, but the order of them moves around a bit from nonprofit to nonprofit. So don’t get too hung up on factor number one, for example, as it may only be number three for your organization. They are all important.

Posted by .(JavaScript must be enabled to view this email address)  on  02/06  at  04:31 AM

This is a very interesting articule as I suggested at a team meeting recently that we analyse supporter feedback, both written and verbal and also the opportunity to discuss this at a team meeting. I wonder if other charities adopt a similar approach?
One feedback I get quite regularly is the amount of communication being excessive (too many letters)! So it was quite a surprise that this did not feature in one of the reasons supporters leave!

Posted by David Rootham  on  02/06  at  01:45 PM

@David, my nonprofit does that. We also uncovered the fact that we were over communicating with some while under communicating with others. (That “under communicating” complaint is harder to uncover.) While I’m still a fan of Chris’s comment above, I’d reconsider the point about everyone being over saturated in terms of engagement. The desired outcome is obviously to cater to each customer’s preferences, the reality is that most of us lack the resources to do that. But we can get better…

Glenn

Posted by Glenn  on  02/06  at  02:17 PM

Thank you so much Derrick for posting this info. a lot of NGO, church charity organisations luck integrity. a virtue that we need to embrace incase we have donor funding.

May God have mercy on all of us.

And to all our Donors, we are very grateful for all your support because alot of you forfeit having a luxurious life that you can share the little that you have with us.

Posted by .(JavaScript must be enabled to view this email address)  on  02/07  at  07:29 AM

I wonder how many of the over communicating complaints are actually over solicitation. I have also seen data indicating that there is a saturation point for all communications, even for loyal supporters. Some nonprofits have addressed this by simply surveying their constituents and asking them what they really want to know and how often - which seems to be what Glenn is doing.

Posted by Bonnie Osinski  on  02/07  at  12:06 PM

George, you’re exactly right about the math here. It’s more likely the total % lost due to “poor service and communication” is near the 18% figure, as the other four highlighted categories are largely a subset of poor service or communication. As you said, the respondents simply checked multiple boxes on the survey.

That said, 18% is still a huge number of donors to retain through better service and communications!

Posted by Michael  on  02/07  at  12:34 PM

Unfortunately, data from >10 years ago is pretty hard to use for a marketing group like this. That was pre-email and the web for most people, and likely those two are non-profits’ biggest channels. And even those two have lost their luster in the last year.

But I think that all the loss factors come down to the same thing: engagement.

I’m a donor (mostly environmental, some social), not a marketer, and I just don’t have time to read the emails from the 20 or so causes I support. I guess it is because they don’t connect with me; they are just another item in my in-box to go through. Those emails don’t engage me personally.

What gets to me is a picture of what someone (preferably who I know or could know) is doing. Like most of the world today, I am drawn to visuals that I can look at quickly and register some personal sentiment. Make some brief connection. It doesn’t have to be a staged pic taken by Ansel Adams, just something that I can register with. Even the most pedestrian things register (which makes sense, right?  you’d be amazed at how stats for people’s desks register (because most people have a desk!))

If you look at engagement stats for Facebook, Pinterest, Instagram, Twitter, et al, pictures with people in them are, by far, the most engaging communication people get. You might think you are writing a short, pithy email but it is still reading, which people do less and less of.

Get my attention with a picture of a person in a setting that I can relate to or “recognize”, and you get me engaged, even briefly, and that is 100x better than an email I have to delete.

Start there, with how people engage today, and you are one step closer to not losing me.

Posted by .(JavaScript must be enabled to view this email address)  on  02/07  at  05:03 PM

Chris, I agree with your post on pictures and that of course lends itself to video too.  How wonderful would it be to have a brief phone or even a voice mail come to you from a nonprofit you have been supporting for more than a year or two . . . not much to read, but a large amount to feel from such an interaction

Posted by Jay Love  on  02/07  at  08:42 PM

Whilst not denying the importance of communication, analysis of these statistics is flawed - the donor column adds to 159%!  It is perhaps more correct to say that of the total number of reasons given by donors for leaving charities, approximately one third are due to aspects of poor communication?

Posted by Helen  on  02/07  at  10:45 PM

Thank you for this post.  Regardless of the percentages, it is clear that communication is the main focus.  There seems to be a predominant theme here, donors 1) thought the charity did not need them, 2) did not receive information on how monies were used 3) were not thanked for their donation 4) thought that others were more deserving.  Donors stop donating because they do not feel valued.

So why would they think that?  It’s less about how frequently you contact your donors and more about the information you are providing to them.  We have to remember to give to donors in order to receive.  Give them information, give them pictures, give them video, give them volunteer opportunities and most of all give them recognition. 

Posted by Wendy Huelsenbeck  on  02/08  at  11:57 AM

Based on a similar analysis that I recently completed, I would suggest somewhat similar findings in that financial issues came up as one major reason for discontinuing donations, but the other big reasons were not feeling appreciated (thank you), not knowing how the money was being used, and not being engaged.  Engagement comes from a combination of knowledge, emotional connection, involvement (e.g., attending events, volunteering), and the feeling that you’ve made a difference.  Communication is a critical component of all of these factors.

Posted by .(JavaScript must be enabled to view this email address)  on  02/08  at  12:25 PM

I’d like to upvote Hillary’s comment. Well said!

Posted by Glenn  on  02/08  at  02:07 PM

The issue of the appropriate degree of engagement with a donar is certainly important,  If the organization iis relatively small, that is something that can be helped with personal contacts and getting each donor involved at some level.  However, the percentages do not equal 100% and death and limited financial means are very real factors as the donor pool ages.  In addition to why donors leave, we need to review how to replace them.

Posted by .(JavaScript must be enabled to view this email address)  on  02/08  at  07:22 PM

Good piece Jay. I’m thinking that giving back to the donor can also be a way of further engaging them. I trust there are innovative ways of giving back/rewarding donors. Not necessarily monetary. It could be free offers from partner organisations who support through services and products etc. I think that will continue to engage donors. And you are too right about the lack of research out there for such a very significant sector.

Posted by .(JavaScript must be enabled to view this email address)  on  02/09  at  10:24 AM

Thanks for sharing this with us. The lack of connection with the donors can be costly. It may be frustrating for them to hear from an organization only when this organization needs financial support. I strongly believe that a thank you note with some information on how the organization uses the money could make a huge difference. Some donors could even consider that as a sign of respect.

Posted by .(JavaScript must be enabled to view this email address)  on  02/11  at  07:20 AM

What Chris and Hillary are talking about is creating relationships… to do that we need to create experiences with and for our donors.  There needs to be give and take.  Non-profits also need to ASK their donors what they need and then answer those needs.  That’s what you do in healthy relationships.

Posted by .(JavaScript must be enabled to view this email address)  on  02/11  at  12:12 PM

Speaking to the question of over-communicating.  My experience has been that while a few donors will request fewer communications and make the claim that they would give more if they were asked less, the opposite generally plays out in fundraising where more communications (both information and asks) generally results in more contributions.  In my observation, it’s the rare organization that is doing too much communicating.

Posted by .(JavaScript must be enabled to view this email address)  on  02/12  at  01:59 PM

This is a very good info-we are a new charity and we are learning from You and another charity!Thank you so much!

Posted by children charity  on  05/24  at  02:56 PM

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