The ROI of Donor Relations

Having the opportunity to help organizations change their relationships with donors is a phenomenal privilege. Combine that with helping them realize a boost to their bottom line through donor relations and I'm in hog heaven!

Donor relations has a tangible return on investment, every time, in every way. And we can prove it. Throughout my travels I meet people who say to me, "If only you knew the thrill of being a fundraiser." After I give them a major side eye, and note their nametag for future reference, I tell them that not only have I been a fundraiser, I AM a fundraiser. Donor relations makes money for an organization, more importantly, it keeps money from leaving.

Here are some recent examples of ROI through donor relations: One of my clients just redesigned their endowment reports and sent them out with a survey asking donors how they did. Not only did they receive wonderful feedback on their process and new reports, they also received over $25,000 in unsolicited gifts in those surveys. Same thing for another client. They went through the same arduous process of revamping endowed fund stewardship, and while it was at times painful and frustrating, no one is mad at the over $75,000 they received unsolicited in the mail with their feedback surveys. That's $100,000 none of us would turn down if it showed up in our bank accounts.

Think about it in another way. If donor relations does their job well and becomes retention experts, then we can prove the ROI of retention on our first time donors and donors over time. My friends at the Agitator talk about donor retention all the time, and their facts are dead on. So how do we prove the ROI of donor relations? We MUST track it. We need to look at retention rates, donors who upgrade, donors who make unsolicited gifts, and we need to say, wow... look at all of the money coming in as a result of making the donation process a joyful one. Acquisition of new donors is easy to track, it's also 7 times more expensive to obtain a new donor than it is to keep the one you have. What would a decrease of 10% in the acquisition budget and moving it to donor relations mean in terms of ROI? I can tell you , it means a great deal. 

Why do these numbers matter? Because leadership needs and wants them. In order to advocate for more resources, donor relations has to show a tangible ROI of every effort we do, both large and small. When I quantify the impact of donor relations on an organization, heads begin to swivel, fundraisers begin to take notice and the importance of donor relations rises. After all, it's very hard to ask for money from a donor who left your organization after their first donation...

What are your thoughts? How do you prove ROI of donor relations at your organization?
Cheers,
Lynne