Last week we talked about some ways to fill the donor pipeline, namely acquisition and reactivation. This starts the process of filling the donor pipeline, but you’re going to need a strategy to keep donors from slipping through the cracks. How do you stop that from happening?
Even if you haven’t noticed a leak, part of your job as a leader is to handle all of the necessary preventative maintenance for managing a donor pipeline. So if you want to keep your donor pipeline from leaking, there are two areas you should immediately reinforce: your retention and stewardship strategies. Retention and stewardship are two ways to be intentional about keeping your donor pipeline leak-free and flowing.
How to Accurately Measure Retention
If you want to improve donor retention, it’s important to measure the right metrics. Exclusively focusing on dollars raised, number of donors, and percentage of donors retained year to year—the three most common measures that organizations evaluate consistently—can mask significant problems within a fundraising strategy, as well as hide success stories.
Here’s an example of a real-world scenario that can be a little deceiving when it comes to measuring retention:
In this case, the organization grew 16-fold from 420 annual donors to 6,800 in three years. Just by looking at these numbers, it appears that retention decreased from 46 percent to 18 percent during this explosive growth period. By digging a little deeper, however, it was discovered that the organization’s retention of donors had actually improved. It was retaining 10 times more donors than it had before. Donor retention, as a percentage of the available donors, was smaller; but it represented significantly more donors each year. Its universe—the denominator in the equation—had simply grown more dramatically. So while retention wasn’t keeping pace with the growth, it wasn’t a failure either.
Without further inquiry, this organization might have stopped its acquisition efforts in order to focus on shoring up retention. Or it might have thrown out its stewardship program and started over. Both moves would have been serious mistakes.
Reinforce Your Pipeline Through Relationship Fundraising
Many donors give because they are passionate about the mission of your organization. They believe in your cause and want to play a role in helping changing the world through your organization. However, that enthusiasm fades fairly quickly when it isn’t managed. This is why the concept of relationship fundraising is so important.
Donors don’t want to be treated like ATMs, where it seems like the only thing your organization values is the transaction. Instead, we must focus on their needs.
Relationship fundraising means intentionally engaging donors by the donor lifecycle milestones they’ve achieved. In other words, speak to them in terms of their experience, expectations, and needs.
If you want to reinforce your donor pipeline through relationship fundraising, here are a couple of essential steps you should take:
TAKEAWAY #1: Recognize the Stages of Relationship Fundraising
Relationship fundraising recognizes there are distinct stages in the relationship development process and those stages have unique requirements.
It is important for us to think differently about these stages and find a way to move people towards deeper levels of the relationship and ultimately commitment. We must recognize that our relationship with donors exist in different stages and be intentional about engaging them in the appropriate way at the appropriate stage.
TAKEAWAY #2: Provide Tangible Benefits for Your Donors
Generally the way we’ve approached fundraising in the past is that a donor supports and organization and that donation goes onto support the beneficiary. Instead, what we should be considering is how can we bring some sort of benefit back to the donor.
This is more than just saying thank you for the impact you’re making. How can we make our donors better citizens so we make them say “I am better for my relationship with this organization than I am outside of it?”
Ask yourself, what are the greatest assets of our organization and how you can use that to bring benefit back to the donor. For example, Higher Education Institutions have a plethora of knowledge they can use to provide benefits that build relationships with donors. Health and Human Service organizations can provide mission trips for donors to provide them with an unforgettable experience.
We must provide some sort of benefit back to the donor or prospective donor.
TAKEAWAY #3: Build Stronger Relationships with Donor Fusion & Donor-Centricity
One thing every nonprofit must understand is that your donors do not perceive themselves as separate your organization. They see themselves as the organization. You can understand this whenever you think about a serious relationship. Eventually two people become one and see themselves as one. Donors have the same mindset when they think about organizations they’re passionate about. This is the whole idea behind donor-fusion. The more you can play into this in how you communicate and engage your loyal donors, the stronger the relationship will become.
Donor-centricity is another important aspect of your relationship with donors that is important to consider. We must recognize that donors see themselves as the center of the universe, achieving and impact through various organizations that they support.
It’s important to recognize how your donors think. Celebrate what they’ve accomplished by making them the hero that partners alongside your organization to change the world.
In order to effectively steward your donors, you need to know what they want, what’s important to them, how they like to be communicated with, and what excites them the most about your organization. With the right data, you can deeply understand your donors and use targeted messaging that allows you to be deliberate in your communication. This laser focus enhances your ability to successfully manage your donor pipeline, upgrading and downgrading your donors along the way.
When you create pathways for new donors, current donors, and loyal donors, and then track their progress based on specific milestones, you’ll be able to keep leaks to a minimum and ensure ongoing progress through the donor pipeline.
To learn more about how to optimize your strategy and create the most opportunities for fundraising success, download the free content paper, Optimize Your Donor Pipeline.