These statistics are from an article in the Winter 2015 issue of Advancing Philanthropy titled “No Magic – Just Magical Alignment.” They were compiled from a study conducted by Jay Love of Bloomerang, citing the reasons donors cycle out. This partial list accounts for 53% of those donors who quit giving because of how the organization treated them.
• Thought the charity did not need them – 5%
• No information on how gifts were used – 8%
• No memory of supporting – 9%
• Never thanked for giving – 13%
• Poor service or communication – 18%
My take-away is simple – design a donor recognition program that addresses how you will treat every donor, consistently, starting with the very first gift.
Donor stewardship consists of intentional relationship-building activities to encourage charitable givers to give again, and to give more. Consider the potential for every donor to your organization, if each can be stewarded through what I call the Donor Commitment Continuum.
The Initial Gift: How you acquire this initial gift and establish each new donor relationship will have a huge bearing on renewal and retention. Thank and inform your donors! What’s the point of all this acquisition work if you don’t keep your hard-earned new donors?
Annual Gifts: Turn Acquired Into Retained. Don’t allow yourself to become overly focused on acquisition since the true value of a donor is found in their lifetime giving potential. To capture the elusive 2nd gift, it’s important to keep the donor engaged and within reach for the next giving opportunity. Intentional stewardship is key.
Major Gifts: No, not every annual donor will make a major gift. But consider the old 80/20 rule of thumb – 80% of all giving comes from 20% of donors. Unless you have a crystal ball to tell you the names of your 20% it behooves you to thoughtfully steward every new and renewed annual donor in such a way that a major gift is possible.
The Ultimate Gift: And, no, not every major donor will make that final really big gift, whether via a bequest or an outright commitment. But what a loss it would be to have neglected that person capable of a transformative gift due to benign neglect, only to read of her leadership pledge to another charity that took better care of her.
The formula for an effective stewardship program is pretty simple. Look back at the statistics at the top of this article, at what Jay Love identified as the root causes of lapsed donors. The stewardship cycle is as easy as this:
Thank: This might come in the form of a gift receipt, a letter from the executive director or the board chair, a note from the development director, or, depending on gift amount, all of the above. A major gift might warrant a special invitation for a site visit/tour, to personalize your gratitude.
Inform: Let the donor know the positive effect of his support. Periodic reports, communication from constituents who have benefited from that support, are simple to create and deliver.
Invite: Identify and create opportunities for donors to visit, to see your work, to meet those you serve, to experience the power of their philanthropy. You can invite them to your scheduled donor recognition events. You can create special recognition events for major donors.
Repeat: The Rule of Sevens (Thank a donor seven times and good will come of it) doesn’t need to be taken literally. But it isn’t hard at all to offer multiple stewardship touches for a new donor.
Consider this very possible scenario for even a first-time donor.
• Immediately: Thank you letter
• Immediately: Official gift receipt
• After several weeks: telephone call from volunteer (as part of your quarterly thank-a-thon program)
• Invitation to annual donor recognition event
• Mail your annual report to donors
These touches may be within a comparatively tight time window, or spread out over several months, depending on when your regularly-scheduled stewardship activities occur. Ongoing, periodic stewardship touches are beneficial, especially as you approach the time to invite renewal of the last gift.
If you can create this many stewardship touches for a new $25 donor, imagine what you can do to properly thank, inform, and invite the $25,000 donor, using special invitations to meet with your leadership, sending periodic reports on how the gift is being put to good use, taking her to lunch, etc.
To really evaluate the validity of the Donor Commitment Continuum, survey your organization’s major donors. How many of their first gifts were in your major gift category? How many made their first major gift only after consistent giving over a period of several years?