Customer Analytics to Project Donor Giving

I think one of the biggest hurdles that nonprofits have to scale is the jump from making one-time donors into consistent supporters. They’ve heard your message, they want to help your cause, but what prevents them from making further contributions? This is the focus of one study being conducted by the Red Cross in collaboration with Wharton Customer Analytics Initiative (WCAI) and six teams of researchers from around the country including analytics experts from Baylor University, the University of Pittsburgh and the IBM Watson Research Center.

The catalyst for this study is the dilemma that the Red Cross shares with most charities: during a disaster people are more than ready to give a one-time gift. However, the financial need of most nonprofits extends far beyond high profiled natural disasters or tragic incidents.

Andrew Watt, CEO of the Association of Fundraising Professionals, states that, “Giving rates still have a long way to go before we reach pre-recession levels, and it all begins with reducing the number of lapsed donors… This is one of the biggest challenges charities face — losing nearly 60 percent of donors every year and relying too heavily on new donors. It’s much less expensive to retain and inspire existing donors than it is to find new donors, so charities should focus on stewarding their current donors and reducing losses there.”
Customer analytics is nothing new to the for-profit world: companies track credit card purchases, prescriptions written by doctors and prevalent topics on internet search engines. With this study, the WCAI hopes to track donor giving on a more individual level.

So far they have found that nonprofits use available data to support projects that they are already doing rather than deal with the process of changing their dynamics for a better outcome. Peter Fader, a Wharton marketing professor and co-director of WCAI, comments that, “There are a lot of companies that would call themselves ‘data-driven’ that are using this in a passive way… People are afraid to trust data too much. They often trust their gut more.”

Online fundraising is a great way to track giving, stay in communication with donors and to nurture a relationship with existing supporters. “Customer analytics” just seems like a fancy term for determining who your supporters are and what motivates them to give. That is nothing new to the nonprofit world and neither is the answer: building relationships. Whether it’s through social media or a line in the mail, letting your donors know they are appreciated and needed will keep them coming back.

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/

5 Ways to Lose Your Donors

In a previous post I quickly referenced why some women stop giving to a charity that they’ve been fairly dedicated to. For some reason this topic keeps rattling in my brain and I can’t help but write about it.
Here are my TOP 5 ways to lose your donors:

Too many solicitations – It comes in ebbs and waves, but many times just when I’m ready sit down and enjoy a nice quiet meal, the phone rings. I let the answering machine get it and the next night, it rings again but I am still too hungry to get it. Finally, on the third night I answer it, annoyed and frustrated that someone would ask me for money when I am relaxing and at dinner time, and I respond to the solicitation with a firm “Sorry, but please take me off your list.” Whether it’s about my cable service or if my alma mater needs money for a scholarship fund, their timing is bad and I’m not giving a credit card number. I also gave to a certain charity about a month ago and since then, they have sent me the same packet of Christmas cards three times. Um, thanks, but no thanks.

Not valuing volunteers – Volunteers can be an important part of any organization; they can save you money on a salary, they can spread your message to their friends and they even slip in a check or two into your bank account. However, how you treat them and their services can make all the difference. If you ask a volunteer to help, make them wait around and then never use the project they completed, they’ll probably move on to somewhere where they feel needed.

How does your clientele represent you to donors? – Now you can’t please everyone all the time, but what does your clientele say about you? If they are soliciting funds, are they polite and respectful? Do they have raving reports about how you’ve helped them? If they come into one on one contact with your supporters, what would they say? If you produce a product or service, how is the quality?

Cash the check – I sent a monthly check to one organization, but they never seemed to deposit it in a timely manner. After one check was held on to for six months, I stopped giving. If they could wait that long to deposit my money, I guess they didn’t need it that bad.

Ease of giving – Many people choose to give online, so do you offer this option on your website? Is your site easy to navigate, quick to load and simple to use? I’ve shopped online countless times but when I get to the check out portion, if the payment doesn’t work right I click out of that page. I don’t have the time or patience to deal with faulty sites. If they won’t take my money someone else will. At least with this point, Fundly can help you make online giving quick, easy and profitable.

In many cases, it can take a ton of effort to gain a donor, so you certainly don’t want to lose them. Hopefully these tips help you maintain giving partners for many years of success in fundraising.

‘Tis the season to thank your donors

Everybody likes to feel appreciated.

Giving thanks to our donors is one of the most important things non-profits do, and is one of the best ways to ensure that donations keep coming in.

Sadly, Penelope Burk, author of Donor Centered Fundraising, reports that “46% of donors decide to stop giving for reasons that are tied to lack of meaningful information or to a feeling that their giving is not appreciated.” No wonder creative fundraising expert Greg Bowden suggests that non-profits should thank donors at least seven times!


I don’t know of a single non-profit that is not grateful for its donors; it’s a shame to let gratitude go unexpressed.

Jocelyn Harmon, Vice President of Sales and Marketing at Network for Good, offers some great advice on how to effectively thank donors on her awesome Marketing for Nonprofits blog. Here are her five gratitude tips:

Be personal – Use proper names, handwritten is always best!

Be creative – Have you thought of writing a song or making a movie? Don’t be shy, be different.

Be tangible – Make sure donors know how their gift is being used.

Be donor-centered – Avoid going on for too long about your organization. Focus on the donor.

Be fast – Acknowledge a gift within 48 hours.

Alan Sharpe, a professional writer of fundraising thank-you letters, advices organizations to “thank donors promptly, personally, particularly and positively.” He’s published a sample letter to help you get started.
Terry Alexrod, author of The Joy of Fundraising, echoes Jocelyn and Alan’s messages about writing specific thank-you letters: “Donors want to see what their gifts allowed you to accomplish – specific facts and stories of how they changed the lives of real people. This is how they will know their money was put to the best use in your programs and services.”

Have you properly thanked your recent donors? If you’ve missed the 48-hour mark, don’t worry. The recent Thanksgiving holiday will add some timeliness to an overdue expression of gratitude.

Better late than never, they say.

Donor Retention Strong for Non-Profits

Are we becoming more compassionate by nature or are non-profit marketing tools becoming more effective at donor retention? When a plethora of news articles and business reports state that the economy is still on the feeble side, in an ironic turn of events many charitable organizations are only getting stronger.

In a report recently published by the Fundraising Effectiveness Project, more non-profits gained new donors or re-established a relationship with past donors than the amount of donors they lost. “The FEP, a report of the Association of Fundraising Professionals (AFP) and the Center on Nonprofits and Philanthropy at the Urban Institute, compares gains and losses of donors and donation amounts. More than just a look at total revenue and the total number of donors to a given organization, the FEP indicates year over year growth by comparing how many new donors are acquired with how many stopped giving, and the donation levels of each…Organizations saw an average net increase of 1.7 percent in the number of donors. This compares favorably to a -3.2 percent average net loss of donors in 2009.”

Although donation levels are not at the rate that they were at during previous years, the numbers are rising steadily. “For every $5.35 that organizations gained in gift dollars in 2010, $5.54 was lost through donor attrition, for an average net loss of -1.9 percent… In 2009 there was a much steeper average net loss of -17.7 percent (a median net loss of -8.1 percent).”

It is also interesting to note that organizations that raise over $500,000 had an increase of 8% net gain. Organizations that brought in between $100,000 and $500,000 had a net gain of 2.3% and organizations under $100,000 had a net loss of -12.2%. The greatest increase in giving came from new donors and the greatest losses were due to donors who once gave and chose not to that year.

So what do these numbers tell us? It is of the upmost importance to retain the donors you already have. It costs less time and money to motivate people who already know about your cause and have given than to inspire a new group of individuals. Rather than getting random funds, nurture the relationships you have. A onetime gift of $100 is still less than someone who gives $10 a month for five years. Plus the longer they give the more likely they are to volunteer, share the passion for your charity with friends and become a greater advocate for your cause.

Want to maximize your donor acquisition and retention for your non-profit and increase your donations? Create a free account on Fundly today, and utilize our social fundraising tools to increase your organization’s success.

Customer Analytics to Project Donor Giving

I think one of the biggest hurdles that nonprofits have to scale is the jump from making one-time donors into consistent supporters. They’ve heard your message, they want to help your cause, but what prevents them from making further contributions?

This is the focus of one study being conducted by the Red Cross in collaboration with Wharton Customer Analytics Initiative (WCAI) and six teams of researchers from around the country including analytics experts from Baylor University, the University of Pittsburgh and the IBM Watson Research Center.

The catalyst for this study is the dilemma that the Red Cross shares with most charities: during a disaster people are more than ready to give a one-time gift. However, the financial need of most nonprofits extends far beyond high profiled natural disasters or tragic incidents.

Andrew Watt, CEO of the Association of Fundraising Professionals, states that, “Giving rates still have a long way to go before we reach pre-recession levels, and it all begins with reducing the number of lapsed donors… This is one of the biggest challenges charities face — losing nearly 60 percent of donors every year and relying too heavily on new donors. It’s much less expensive to retain and inspire existing donors than it is to find new donors, so charities should focus on stewarding their current donors and reducing losses there.”

Customer analytics is nothing new to the for-profit world: companies track credit card purchases, prescriptions written by doctors and prevalent topics on internet search engines. With this study, the WCAI hopes to track donor giving on a more individual level.

So far they have found that nonprofits use available data to support projects that they are already doing rather than deal with the process of changing their dynamics for a better outcome. Peter Fader, a Wharton marketing professor and co-director of WCAI, comments that, “There are a lot of companies that would call themselves ‘data-driven’ that are using this in a passive way… People are afraid to trust data too much. They often trust their gut more.”

Online fundraising is a great way to track giving, stay in communication with donors and to nurture a relationship with existing supporters. “Customer analytics” just seems like a fancy term for determining who your supporters are and what motivates them to give. That is nothing new to the nonprofit world and neither is the answer: building relationships. Whether it’s through social media or a line in the mail, letting your donors know they are appreciated and needed will keep them coming back.

Top 5 Fundraising Mistakes to Avoid

We’ve all done them or seen them done. The big “oops” that makes us cringe or has us scrambling to do damage control. With online fundraising, I’m not sure if these embarrassing incidents happen more or less.

First of all, we tend to communicate with donors more online than with traditional methods increasing our chances to misfire. However, with technological advancements and management being more meticulous and cautious these days, there may be more thought put into doing a project right.

Anyway, here are some mistakes you should definitely avoid:

1)      Direct Mail Campaign No-no’s – Mail merges make life so much easier but one wrong click of the keys and your whole spreadsheet could be off. Make sure that your donor’s names, addresses and giving amounts are correct but also keep in mind that addressing a letter to “Dear Friend” is just as unsuccessful as using the wrong name. Also, do what you can to avoid signature stamps or scanning in a signature. That is just way too impersonal, especially when someone has taken the time to donate to your organization.

2)      Pestering Your Donors – Are you running too many campaigns at once and asking too much from your donors? Are you filling their mailbox and Inbox with countless updates? Are you asking a $10 donor to jump to being a $50 donor? Create a calendar for your organization and spread out your updates, events, campaigns and e-mails so departments aren’t overlapping.

3)      Not Delivering On What You Promised – From buying cookies to investing in a building program, if a supporter commits to handing over their dollars they want to see a return. Follow up on how your campaign is going and if you didn’t raise enough and have to bail on your goal, be honest about it. Your word is your greatest asset to gaining donor trust and their dedication to your organization.

4)      Build Relationships – Sending out a mass of mailers or asking for money in front of a grocery store never brings in very good results (unless you are the Salvation Army and have a red bell and history of 100 years behind you.) People tend to be motivated by their hearts and emotions causing formal letters and door-to-door solicitations to be unfruitful. Use photos, first names, and anything else that brings the human touch and a bridge of relationship into the mix. Invest into donors and they will invest into you.

5)      Keeping Up With the Times – Echoing the last point, the old ways of fundraising involve a lot of time and money without stellar results. Online fundraising through social media can make life so much easier for any development team. Communication, ease of donating and seeing pictures and videos of your mission tie your supporters into your cause. Since the investment is also low, you can experiment with your fundraising strategies and campaigns to reach new goals.

Social Media Fundraising 2012 Part II: Donor Retention

As I mentioned in the previous blog, Fundly was proud to assemble three of the leading experts in online fundraising to be a part of our panel for a webinar on Thursday, January 12, 2012. If you missed this outstanding discussion or just want a recap, keep reading. In this second part of a three part blog series, I’ll do my best to summarize the most important points that will help to accelerate your fundraising success this year. You can also visit Slideshare to review the PowerPoint or connect to GoToMeeting for the slideshow in conjunction with the discussion. This is definitely one hour that will positively impact your online fundraising strategies.

Our second presenter who shared in the discussion was Jeff Riddle, founder of TheGiveGive.com and Riddle & Company which was recently acquired by advertising technology company ReTargeter. Addressing the question “How do we use social channels to attract, convert, and retain donors?” Riddle boils down the answer into one word: relationships. Technology is an incredible resource; however, we tend to lose some of the humanity when we don’t interact face to face. For example, when the telephone became commonplace it included the challenge to interpret what a person is fully saying without being able to read their body language. Compound this on the internet with a form of communication that doesn’t allow for voice intonation and it can be difficult for an organization to build deep, strong relationships from a distance.

Riddle’s first recommendation is “Relationships first, transactions later.” Giving is based on building a relationship of trust which takes an investment of time and effort. Secondly, Riddle explains that not all relationships are created equal so non-profits need to segment their audiences. “Give 80% of your time and resources to 20% of your top donors.” Finally, scale down your efforts based on your effectiveness.

Random Tweets on your Twitter account thanking donors for their giving is cost and time effective, but will bring in a low return. Taking each donor out to a steak dinner takes a huge amount of time and financial investment, but the returns will be phenomenal (but this approach is highly improbable.) With this in mind,
Riddle suggests that charity leaders create a “chain to balance effectiveness with time management.” Create the most effective method such as dinner meeting down to the lowest effort method such as writing a personal, handwritten thank you letter and compromise somewhere in between with your various levels of donors.

I must agree with Riddle: in order to create a lasting relationship, time and effort must be invested in order to have a decent outcome. To establish an ongoing partnership, we need to see each donor as an individual and appreciate each sacrificial donation that they make. Social media is a great way to connect to many people with little time and financial investment but knowing the right way to use this tool is key. Contact Fundly today to create a social media fundraising strategy to reach the masses while valuing the individual.

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.