Donor Retention = Financial Sustainability

In a report conducted by the Association of Fundraising Professionals and The Center on Nonprofits and Philanthropy at the Urban Institute, their project entitled the Fundraising Effectiveness Project (FEP), has solidified some ideas that we have suspected all along: it’s the long term donors that keep the non-profit organization financially stable.

Dr. B.J. Bischoff reflects on the findings of this project in the Sonoma Valley Sun. Involving 2,377 non-profits and five years of monitoring donor giving, the FEP’s goal in this study is to “help nonprofits measure, compare, and maximize their annual growth in charitable giving. Specifically, the FEP measures the percentage of new and lapsed donors and the size of donor contributions from year to year.”

Here is the bottom line: “The 2011 FEP report showed that nonprofits have a donor retention rate of only 43.1 percent, meaning that 56.9 percent of their 2009 donors did not give in 2010. The cumulative study results over the past five years reveal that nonprofits (1) lose over 50 percent of their donors between the first and second donation; (2) lose 30 percent of those donors year after year thereafter; and (3) lose 30 percent of regular or sustainer givers from one year to the next. So, merely looking at the overall net income, and not calculating the difference between net gains and losses of donors and dollars from year to year does not give the management and boards of nonprofits the real picture of what’s happening in their fundraising efforts,” reports Bischoff.

So what is the best way to garner donor retention? Jodi Anderson, the incoming president of the Wine Country Chapter of the Association of Fundraising Professions and an experienced fund development professional with Hanna Boys Center has some great advice. Based on her record of keeping 70 – 75% of her donors over a two year period, she suggests that, “donor retention is achieved by making sure that donors feel respected and valued by the organization. This can be accomplished through a number of mediums, including (1) prompt and personal acknowledgments (not generic); (2) periodic updates regarding achievements and successes of both the organization and the service population; (3) focused appeals related to a specific need, coupled with motivational information about how their gift will make a difference; (4) invitations to events; (5) phone calls; and (6) special hand written notes.”

The key to non-profit fundraising is communication, relationships and a shared passion for your cause. An important element to nurturing these donor partnerships is through social media. With a great website, updates on Facebook and Twitter and even through e-newsletters, your donors can continue to stay in touch and in contact with your organization. Contact Fundly today to get the most out of your online donor fundraising.

Sourced info below:

http://nonprofitmatters.sonomaportal.com/2012/01/05/donor-retention-key-to-nonprofit%E2%80%99s-financial-sustainability/

Women are the Main Decision Makers in Philanthropic Giving

There’s a quote in the movie My Big Fat Greek Wedding that the women in my family love: “The man is the head [of the family], but the woman is the neck. And she can turn the head any way she wants.” Apparently this is true when it comes to donating to charities.

According to a press release posted by Business Wire on MarketWatch.com, “In nearly 90 percent of high net worth households, women are either the sole decision maker or an equal partner in decisions about charitable giving, according to the Bank of America Merrill Lynch 2011 Study of High Net Worth Women’s Philanthropy, released today. The power and influence of women in philanthropy may mean that some charitable organizations will need to adapt their messaging and strategies to appeal to women’s distinct charitable giving behaviors and motivations.”

These are some of the key findings from this study:

–Women spend more time than men on due diligence before making decisions about giving to a charitable organization.

– Women expect a deeper level of communication with the organizations they support and place greater
importance than men on the efficiency and effectiveness of the organization and hearing about the impact of their gift.

– Women want to be actively involved with an organization and its mission, with volunteering being among the most important motivations for women to give.

– Women are more likely than men to stop giving to an organization they had previously supported whereas men tend to support the same causes year after year.

Women tend to make more of an emotional investment with their giving and in their budget a portion is marked for a predetermined charity. Women also expect an update of how their giving was used and that it was successful in the project that it was earmarked for.

The study also found that women give to make a difference in the world and to set an example for the next generation. Volunteering tops the reasons why women are motivated to give. Women stop giving if they are pestered too much with solicitations or if the amount that they are asked to give is too high.

It’s a tightrope that non-profits have to walk between appealing to age, sex, financial demographics, communicating without overkill and being heartfelt without being sappy. At least there are a bunch of studies that help to guide charities know who their audience is and what appeals to the masses.

Learn more about Fundly today and how you can use our social fundraising platform to reach women via Facebook and other social networks to garner support and donations for your cause.

What Motivates People to Give to Charity?

There are a few basic reasons why people are motivated to donate to charities: a moral obligation, it’s good for the self-esteem, it provides a decent tax right off, and/or helping others is part of a holiday tradition. We all have certain triggers that attach our hearts to our wallets and that’s what makes the holidays one of the busiest times of year for non-profits. Sentimentality, generosity and family traditions are as much a part of the season as decorated trees, sappy movies and too sweet cookies with a side of cold milk.

Knowing what motivates your donors to give is one of the biggest marketing challenges for non-profit organizations. It’s not that we want to manipulate our donors to pry open their wallets, but we do want to plant the reality of the urgency of the needs that burden our clientele. In a world filled with countless people needing assistance, many of our donors are bombarded with mail boxes flooded with letters petitioning for a monthly gift, Facebook posts stating the latest project that needs to be completed or TV commercials displaying heart breaking pictures with a melodic soundtrack playing in the background. Standing out and tapping into what motivates your donors is key to successful fundraising.

On StarTribune.com, writer Jean Hopfensperger interviewed several people to determine what motivates their giving in the holiday season. Hopfensperger mentions that in Minnesota, 60% of non-profit donations come between the Thanksgiving holiday and January. “Apart from feeling that warm glow of giving, people donate for more specific reasons. A 2009 survey by the Center on Philanthropy at Indiana University showed the top three reasons people donate are to help disadvantaged folks meet their basic needs, to make the world a better place and to make their community a better place. Also near the top of the list was the personal conviction that people with more should help those with less,” explains Hopfensperger.

Tim Seiler, director of the fundraising school at the philanthropy center, commented “Tax breaks may not motivate the gift, but they may motivate the size of the gift… Likewise, improving social status is a motivator for some, such as having a chance to hobnob with the rich and famous at charity galas. But, again, it is not in the top tier of reasons.”

Fundraising experts say that giving has increased over the holiday seasons because of low-cost technological ways to reach out to donors via Facebook, Twitter and e-mail. This is also the easiest way for donors to make a pledge to their favorite charity.