Tuesday, March 15, 2016

Is there a magic dollar amount for donor retention?

I'm passionate about donor retention, some might even say obsessed. I hope you are too. I'm not only a champion for donor relations, but also an advocate for the profound importance of keeping your donors even closer than you knew possible. You see, the ask, a solicitation, only works every once in a while, but a thank you works every time. But how much is the right amount to ask for? Does the amount of a donor's gift translate to their retention. In a recent AFP article citing the Fundraising Effectiveness Report, turns out there is. There is evidence of a direct correlation between giving amount and donor loyalty.

The amount may surprise you. It's not the thousands of dollars that we chase in major gifts, to the contrary, it's about $250 for most donors. I thought this was intriguing research, so I tested the theory with a few of my favorite clients. In fact, when they dug into the data, we did find an amount at which donors gave more loyally once they gave that amount. At one organization it was $150 and at another it was $200. Seems like to me its a bit more than $10 a month, enough to be a sacrificial gift for many. Have you thought about this at your organization?

Is there an amount that you can find in your data retains donors at a much higher level than the rest? What percentage of your donor base gives at this amount and above. It's not good enough just to know about this data or your "magic number". Now you have to act. You have to partner with your friends that do the asking and ensure that they target this amount. Picture it like this... life is like a box of chocolates, and you don't wanna just take a bite out of every one, you wanna know that the one you chose is the winner. I know a certain someone who dug their thumbnail on the underside of each chocolate to tell their inner secrets but that's another story for another day. Rather than having silly giving levels like founder and guardian and bronze and pewter, why not target the amount that "sticks"? 

This gets us even further into the idea of mapping out who your loyal donors are and what they "look like". What are their giving patterns, when do they increase and decrease and what is the journey along the way? As you get to know some of your larger donors better, ask them about what makes them loyal. One of my favorite donors recently said to me on twitter: "I will give once because a friend asks but sustained giving requires a belief and commitment to the cause".  This struck me as profound because not only is he and his wife's giving broad in the community it is also very deep. They receive such joy from their ability to be generous and are deeply involved in the causes they care about. I understand that not all donors are the same, but the more we get to know them, the better we can perform our essential and important functions.

I agree there is no silver bullet to donor retention, but information empowers us. For example, in your retention patterns, is there a year of loyalty where you see a steep drop off? Can you tie it to leadership or climates in the economy or other uncertainties? Or is there a true fatigue point? Have you taken the time to examine these things? I would love to hear about your ideas on the "magic number". What other data points tied to retention are you examining?


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