Is there any reason a nonprofit should loose a donor?
The easiest donors to keep are the passionate, loyal donors.
Putting aside death, retiring to Florida, and unemployment, donor attrition should be less than 5%. Why is it that many nonprofits experience much higher attrition rates?
In part, it may be cultural. Since the nonprofit down the street looses 20% of its donor base each year, a 15% annual loss seems good. Why worry about it, when the results are better than someone else’s?
Think about that for a moment. If a nonprofit has donor income of $1.5 million, a 15% loss is $225,000. It is doubtful that there is a more expensive problem facing the nonprofit. Even a small nonprofit with donor income of $100,000 will lose $15,000. That is still one of the biggest problems it faces. In either case, the lost income would effectively solve several problems the nonprofit faces.
The long-term impact is more dramatic. If one retains the 15% that increases income for many years. The sustainability benefits are significant.
In part, complacency is contributing to the loss. Historically, the fundraising program was effective enough to grow the donor base even with attrition. As a result, the attrition seems like a minor problem or it is ignored because the affect is zero. Does the development department need this stress? Do you believe that this is a sustainable model for 2009? Was it successful in 2008?
In part, it is hard work. Cultivating, keeping, and building passion among donors is hard, time-consuming work without thanks or obvious immediate results. Is the long-term return worth it?
As usual, when the economy turns down the consultants warn that the donors will reduce their gifts. One possibility is a smaller gift. The second is eliminating support for some nonprofits. This article focuses on both. Passion for the mission is a cure for both reduction and attrition.
Enough crying over spilled milk, what is the solution? There are three solutions. One is to spend more time recruiting passionate donors. They are harder to find than those who are willing to give. A previous posting provides some thoughts on one element of the donor recruitment process.
The second is to thank the donors. Do donors ever get calls thanking them for their support? A handwritten note, email, or text message is too easy. The extra effort of making the call makes the thanks personal rather than perfunctory. This helps slow attrition but it is short of prevention.
The third is to cultivate the donor. What is important to them? How can they engage in the mission so that their passion will grow? The only way to answer those questions is to ask. Finding the answers helps with preservation of the relationship. The answers is found by having direct personal contact.
People very seldom walk away from their passions. Even if they move to Florida, they are likely to keep supporting the passion. People seldom reduce their support for their passions. Even if they retire, they are likely to sustain their giving level if they are passionate.
What every nonprofit needs are passionate, loyal donors. The second solution creates loyal donors. Solutions one and three create passionate donors.
Is it too late to prevent attrition? No, but you need to start today.
Is it hard work? Yes, but if it prevents an annual loss of several thousand dollars, it is worth it. If it makes next year easier on everyone, it is worth it. If it increases sustainability, it is worth it. If it reduces the stress on the development department and helps them reach their goal, it is worth it.
Can you think of one reason to delay?
