Mon, February 04 2013
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.)
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?