Why the FEP Donor Retention Data is so Vital to Every Fundraiser

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On September 16th, the Fundraising Effectiveness Project (FEP) released the findings from their 2013 survey. For the first time in five years, charity respondents saw positive gains in giving, but still continued to lose donors faster than they gained them.

Erik J. Daubert MBA, ACFRE, a key contributor to the FEP report, will join us to discuss the data from a fundraiser's perspective and explain why understanding donor retention is so vital to every fundraiser.

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Why the FEP Donor Retention Data is so Vital to Every Fundraiser

  1. 1. Why The FEP Donor Retention Data Is So Vital To Every Fundraiser
  2. 2. Your Presenters Erik J. Daubert, MBA, ACFRE Chair, Growth in Giving Initiative Affiliated Scholar, Center on Nonprofits and Philanthropy The Urban Institute Jay B. Love CEO and Co-Founder of Bloomerang • 30 Years of Technology Leadership • Former Founder & CEO of eTapestry • AFP Board Member • AFP Ethics Committee Chairman • Center on Philanthropy at IU Board Member
  3. 3. What is the Growth in Giving Initiative? • The Growth in Giving Initiative is a set of charitable giving research projects involving many nonprofit and for profit partners. • Our goal is to understand and challenge the United States philanthropic sector to provide more resources to the nonprofit organizations working to answer the challenge of serving our nation. (2 percent of the Gross Domestic Product (GDP) for the last 50 years) • Many Projects: – Fundraising Fitness Test, Fundraising Analytics, Research, Convening, Database, Indices, Training and Education, FEP Canada, and More!
  4. 4. What is the Fundraising Effectiveness Project? • Our work has been most known to date by the Fundraising Effectiveness Project or FEP, which helps nonprofit organizations measure and compare their annual growth in contributions by gains and losses in giving. • Nonprofits increase net growth in giving by maximizing their gains and minimizing their losses. (Improving Retention)
  5. 5. How Do Many of Us Look at Fundraising? • • • • • • Did We Make Our Goal of $X? Is Our Board Satisfied? Does Our Budget Continue? Is Our Mission Fulfilled (Enough?!)? Is My CEO Content (Enough!?) Other?
  6. 6. Let’s Look at a Few Key Areas of the Fundraising Effectiveness Project… • • • • • Donor Retention Gift Retention Upgrades Downgrades Lapsed Donors
  7. 7. And Let’s Talk About What You Can Do About Some of These… • Donor Retention • Gift Retention • Upgrades
  8. 8. Donor Retention • Donor Retention is defined as the donors you KEEP versus the donors that you lose each year or set of years. • You want to keep your donors…not lose them. • The FEP measures how well you do at this effort! 
  9. 9. Important to Understand that All Donors Are Not Created Equal… • Who can You Not Afford To Lose? • Which Donors Can You Most Effect Positively? • What Strategies Can You Devise for: – MAJOR Donors – Midsize but VERY IMPORTANT donors – Smaller Donor Groups
  10. 10. What Strategies Can I Use in My Development Efforts? • Define Which Donors You Can Not Afford To Lose. (Example - $5,000 and up Donors) – Develop Real and Personal Relationships – Regular and PERSONAL contact • Understand Which Area You Can Have the Most Impact with from Your Efforts. (It might be $2,500 - $4,999 or it just might be another giving level…) – Determine who has the most potential – Look at how you can connect with them in meaningful ways (Personal solicitation, group gatherings, personalized mailings, one visit per year, special invitation events, etc.)
  11. 11. Gift Retention • Gift Retention is defined as the GIFTS you KEEP versus the GIFTS that you lose each year or set of years. • You want to keep your GIFTS…not lose them. • The FEP measures how well you do at this effort! 
  12. 12. Important to Understand that All Gifts Are Not Created Equal… • Which GIFTS Can You Not Afford To Lose? • Which Areas of GIFT RANGE Can You Most Effect Positively? • What strategies can you devise for: – MAJOR GIFTS – Midsize but VERY IMPORTANT GIFTS – Smaller GIFT RANGE Groups
  13. 13. What Strategies Can I Use in My Development Efforts? • Define Which GIFTS You Can Not Afford To Lose. (Example $5,000 and up Gifts) – Develop strategies that personalize and help the donor to understand the value of these gifts – Regular and PERSONAL contact • Understand the True Meaning of “Stewardship” (“Thank and Report Back – without ASKING”) • Develop a stewardship plan that is specific and appropriate for each GIFT level…Where there is POTENTIAL – Do MORE! • The “10% Rule”
  14. 14. UPGRADES • Upgrades are defined as the GIFTS you GROW BIGGER each year or set of years. • You want to UPGRADE your GIFTS when you can! • The FEP measures how well you do at this effort! 
  15. 15. Important to Understand that All Donors Are Not Created Equal… • Which GIFTS can You UPGRADE? • Which Areas of GIFT RANGE can you most effect positively if you can UPGRADE them? • What strategies can you devise for: – UPGRADING MAJOR GIFTS – UPGRADING Midsize but VERY IMPORTANT GIFTS – UPGRADING Smaller GIFT RANGE Groups
  16. 16. What Strategies Can I Use in My Development Efforts? • What are You Doing to Bring Donors CLOSER to YOUR ORGANIZATION? • Define Which Gifts You Are Most Likely to UPGRADE (Example - $250-$499 Donors) – Understand that Not All Donors Will UPGRADE. For Annual Campaigns, about 20% is a good metric for number of gifts… – Develop a Real Strategy that Can Work for Your Budget and Organization • Who Can Help You? (Volunteers, board, committees, family, etc.) • Design a plan that makes your dreams (and those of your donor) become reality!
  17. 17. Here is the address for downloading the newest “Fundraising Fitness Test” for use in measuring your own performance! www.afpnet.org/fep We hope that you will use these tools to improve your fundraising efforts!
  18. 18. 2012 FEP Data on Donor Retention Rate Donor Retention Rate was 39% Donor Attrition was 61%!
  19. 19. Yes, your eyes read correctly: More than SIX out of every TEN Donors from the previous year did NOT donate at all the next year!
  20. 20. Donor Retention Best Practices » “A 10% improvement in retention can double the LIFETIME value of your donor database!” – Dr. Adrian Sargeant, Bloomerang Chief Scientist
  21. 21. Defining Lifetime Value » “The total net contribution that a customer/donor generates during his/her lifetime in your database.”
  22. 22. Calculating Your Retention Rate » # of Donors in Current 12 Months (from the previous years pool) divided by # of Donors in Previous 12 Months
  23. 23. Retention Begins With The Thank You! Above Average Gift Amount At or Below Average Gift Amount
  24. 24. 5 Acknowledgment Principles (Drastically Improve First Year Donor Retention) • • • • • 48 Hour Rule Fully Map a Track for Each Segment Be Different Than the Rest (Handwritten!) State Exactly What the Monies will Fund Call or See in Person as Often as Possible
  25. 25. Questions?
  26. 26. Erik J. Daubert, MBA, ACFRE Chair, Growth in Giving Initiative Affiliated Scholar, Center on Nonprofits and Philanthropy The Urban Institute daubert.erik@gmail.com
  27. 27. Next Webinar: 1/17 - 3pm EST Claire Axelrad Social Media https://bloomerang.co/resources/webinars

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