Donor Retention by the Numbers:
Demystifying the Leaky Bucket
Present
&
Our Agenda
1. The leaky bucket – what is it?
2. Donor retention by the numbers
3. Is poor data quality hiding fundraising ...
Our Experts
Gary Carr
President, Co-founder
Third Sector Labs is a data services
company helping nonprofits to re-think
th...
4
Insight
Reporting
• Masterfile Audit (MAAP)
• Fund Forecast™ Budget tool
Exclusively Serving Nonprofits
Built by fundrai...
LEVEL 1:
ASSESSMENTS AND
CLEANING
LEVEL 2:
DATA MANAGEMENT,
ENRICHMENT, MIGRATION
LEVEL 3:
WAREHOUSING, MINING,
VISUALIZAT...
Let’s get started
6
Question: how will you raise more money?
7
Fundraising planning Potential tasks
A Retain existing donors Build relationshi...
Next question: which is the easiest?
8
Fundraising planning Potential tasks
A Retain existing donors Build relationships
C...
Final question: which is the most expensive?
9
Fundraising planning Potential tasks
A Retain existing donors Build relatio...
Donor retention is everything
10
“What if there were no new donors?”
- Roger Craver, Fundraising Expert
What do we know about donor retention?
11
Source: AFP / Urban Institute 2013 Fundraising Effectiveness Survey Report
Infog...
And?
12
Source: AFP / Urban Institute 2013 Fundraising Effectiveness Survey Report
Infographic: Bloomerang Nonprofit Donor...
And, and?
13
Source: AFP / Urban Institute 2013 Fundraising Effectiveness Survey Report
Infographic: Bloomerang Nonprofit ...
Which brings us to the Leaky Bucket
14
For every
100 donors gained
There are
105 donors lost
Retention Math 101
15
Donors who gave in 2012 and 2013
whose first gift was in 2012.
New Donor Retention
Donors who gave i...
But before we “do the math”, remember …
garbage in, garbage out
What do we know about data quality?
“If your data isn’t getter better, it’s getting worse”
-- TSL data scientist
“What! Wh...
Data degrades
What does that mean?
Data degradation – [DAY-tuh deg-ruh-DAY-shun], noun
Refers to the worsening of data qua...
Data degradation
Cause #1: your organization
– Lack of data entry standards
– Unskilled data entry workers
– Common mistak...
Your view
You try to keep
track of contact
updates.
Our view (once we export and analyze)
Salu
tatio
n
Last Name First
Name
M.I. Address 1 City State Zip Phone Email DOB Gend...
Think about your data quality
1. Is your data clean and rich enough to:
– Target lapsed donors with the right message?
– B...
Back to the numbers
23
Data needed to calculate retention
1. Donor ID
2. Date of gift
3. Amount of gift
24
Retention Math 101
25
52,000 / 99,000
53%
Existing Donor Retention
3,000 / 10,000
30%
New Donor Retention
2012 existing do...
Donor Dashboard™
26
30%.97 53%
36%
File Growth
File Decline
GROWTH SCORE
Retention and the Leaky Bucket
27
Existing
Donors
Retained
55,000
Donors Gained
New ...
Move the metric
28
$196,448
Additional Annual
Gross Revenue
50% 52%
Real World Fundraising Example
Developing a Retention Action Plan
29
X X
X
X
Increase response → Increase retention.
Define the objectives for your existing,
single-gift, and lapsed donors.
Increase ...
Use Scores to Raise More.
Committed
 Using science,
predict who’s most
likely to respond.
 Develop campaign
/ contact st...
Committed
Donors
Lifetime Value
$707
24,781
Episodic
Donors
Lifetime Value
$64
25,447
Casual
Donors
Lifetime Value
$369
Re...
$$$
$$$
$$$
Committed donors
Casual donors
Episodic donors
% of budget
to allocate:
Contact as
frequently as
budget allows...
ACTION PLAN | 34
<< Best Performing Worst Performing >> New
C
am
paign
1
C
am
paign
2
C
am
paign
3
C
am
paign
4
C
am
paign...
RETENTION ACTION PLAN: TARGET SINGLE GIFT DONORS*
MorelikelytoRespond
12.554
Unlikely but
Valuable
More Valuable
12,641
Po...
Expense
Budget
Frequency
of Contact
Channels
Likely
Loyalists
Potential
Partners
% of budget to allocate:
Unlikely but
Val...
ACTION PLAN | 37
REACTIVATION ACTION PLAN: TARGET LAPSED DONORS
25-60 Months
Lapsed
41,241
Risky
45,886
Renewable
62,995
R...
REACTIVATION ACTION PLAN: LAPSED DONOR CLUSTERS
$$$
$$$
$$$
Reliable donors
Renewable donors
Risky donors
% of budget
to a...
Increase Retention
Increase Response
Increase Second
Gift Conversion
Target single gift
donors to increase
retention from ...
Overall Retention Best Practices
1. Thank yous!
2. Welcome series for new donors.
3. Superior donor services.
4. Show the ...
In conclusion
41
3 Takeaways
1. Retention is the best way to improve your
fundraising results year over year.
– And least costly!
2. Data q...
How we can help
• DonorTrends offers … a Masterfile
Audit and Action Plan. Ready for
your review in less than a week,
the ...
• Digital fundraising experts
• Retention-focused technology
• Donor Commitment / Satisfaction experts
• Full Service Agen...
We’d like to hear from you!
Please submit your questions…
45
Q & A
Thank you!
Gary Carr
President, Co-founder
ThirdSectorLabs.com
gcarr@thirdsectorlabs.com
linkedin.com/in/gpfcarr
DonorTren...
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Donor retention by the numbers: Demystifying the leaky bucket

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Donor retention by the numbers: Demystifying the leaky bucket. A webinar presented by Third Sector Labs and Donor Trends. Presented live on June 12, 2014

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  • Moderator: Welcome everyone … and thank you for attending.

    Run the poll … giving people additional time to log in.
  • Presenter: Caity
  • Presenter: Gary

    Introduce TSL’s areas of expertise:
  • To Chris …
  • To Chris …
  • We could spend an entire webinar on the relationship between data and fundraising strategy success. The previous questions get at the heart of the issues. Here, let’s review one example in detail … data cleaning.
  • Summary details rolled up and transaction summary data view. Address information changes at 14% per year. Emails and phone numbers change even more frequently.
  • Gary …
  • To Chris …
  • Most cost effective: reduce the size of the holes in the bucket.
  • To Chris …
  • Donor retention by the numbers: Demystifying the leaky bucket

    1. 1. Donor Retention by the Numbers: Demystifying the Leaky Bucket Present &
    2. 2. Our Agenda 1. The leaky bucket – what is it? 2. Donor retention by the numbers 3. Is poor data quality hiding fundraising risk? 4. Case study and action plan 5. Next steps and takeaways Please participate in our online poll while we get organized for today’s event. 2
    3. 3. Our Experts Gary Carr President, Co-founder Third Sector Labs is a data services company helping nonprofits to re-think their data management practices and solve data problems. ThirdSectorLabs.com gcarr@thirdsectorlabs.com linkedin.com/in/gpfcarr DonorTrends is a data analytics firm providing affordable and easy to use donor segmentation tools to nonprofits of all sizes. DonorTrends.com caity.craver@donortrends.com linkedin.com/in/caitycraver Caity Craver CEO 3
    4. 4. 4 Insight Reporting • Masterfile Audit (MAAP) • Fund Forecast™ Budget tool Exclusively Serving Nonprofits Built by fundraisers for fundraisers, DonorTrends is on a mission to provide affordable and actionable tools that increase revenue, retention, and improve efficiencies. www.DonorTrends.com Action Strategy • Action Plan (MAAP) • Audience Audit™ • Mailplan Check™ • Actionable Analysis: • Ex: Upgrade Analysis Execute Scoring DonorScores™ Predictive Models • Net Revenue Optimization • 2nd Gift Conversion • Monthly Donor (sustainer) Conversion • Lapsed Donor Reactivation • Mid-Level Upgrade • Major Donor Upgrade • Planned Giving Identification
    5. 5. LEVEL 1: ASSESSMENTS AND CLEANING LEVEL 2: DATA MANAGEMENT, ENRICHMENT, MIGRATION LEVEL 3: WAREHOUSING, MINING, VISUALIZATION Also Exclusively Serving Nonprofits ---- Data Services ---- Founded in 2013 by professionals with 20+ years of technology and data experience with Fortune 500 companies, the federal government, and nonprofits Offices in Washington, DC and Seattle, WA metro areas www.thirdsectorlabs.com 5
    6. 6. Let’s get started 6
    7. 7. Question: how will you raise more money? 7 Fundraising planning Potential tasks A Retain existing donors Build relationships Capture more data B “Lift” existing donors Launch matching gift plan C Reactivate lapsed donors Targeted communications D Find new donors Ask donors for referrals Buy list
    8. 8. Next question: which is the easiest? 8 Fundraising planning Potential tasks A Retain existing donors Build relationships Capture more data B “Lift” existing donors Launch matching gift plan C Reactivate lapsed donors Targeted communications D Find new donors Ask donors for referrals Buy list
    9. 9. Final question: which is the most expensive? 9 Fundraising planning Potential tasks A Retain existing donors Build relationships Capture more data B “Lift” existing donors Launch matching gift plan C Reactivate lapsed donors Targeted communications D Find new donors Ask donors for referrals Buy list
    10. 10. Donor retention is everything 10 “What if there were no new donors?” - Roger Craver, Fundraising Expert
    11. 11. What do we know about donor retention? 11 Source: AFP / Urban Institute 2013 Fundraising Effectiveness Survey Report Infographic: Bloomerang Nonprofit Donor Retention Primer
    12. 12. And? 12 Source: AFP / Urban Institute 2013 Fundraising Effectiveness Survey Report Infographic: Bloomerang Nonprofit Donor Retention Primer
    13. 13. And, and? 13 Source: AFP / Urban Institute 2013 Fundraising Effectiveness Survey Report Infographic: Bloomerang Nonprofit Donor Retention Primer
    14. 14. Which brings us to the Leaky Bucket 14 For every 100 donors gained There are 105 donors lost
    15. 15. Retention Math 101 15 Donors who gave in 2012 and 2013 whose first gift was in 2012. New Donor Retention Donors who gave in 2012 and 2013 Overall Donor Retention Donors who gave in 2012 and 2013 whose first gift was pre-2012. Existing Donor Retention
    16. 16. But before we “do the math”, remember … garbage in, garbage out
    17. 17. What do we know about data quality? “If your data isn’t getter better, it’s getting worse” -- TSL data scientist “What! Why?” -- audience
    18. 18. Data degrades What does that mean? Data degradation – [DAY-tuh deg-ruh-DAY-shun], noun Refers to the worsening of data quality over time. With assets like a donor database, degradation is inevitable. Why? Because of the many, sometimes unavoidable, negative influences acting on your data quality. These include: consumer data naturally changes as people change jobs, relocate, have families, and go through the normal cycles of life; data inputs are often flawed and/or manual, and the manual labor can be poorly trained; related data is changed, purged or updated; data migration to new systems such as CRM software.
    19. 19. Data degradation Cause #1: your organization – Lack of data entry standards – Unskilled data entry workers – Common mistakes – Record fragmentation Cause #2: the technology – Multiple, disparate systems – System upgrades – Integration, processing errors – Sheer volume of data Cause #3: those darned donors … life! – Change in address … every 5 to 7 years – Change in jobs … 9 to 11 jobs in a lifetime – Family / life event … divorce rate, birth of children, death … what else?
    20. 20. Your view You try to keep track of contact updates.
    21. 21. Our view (once we export and analyze) Salu tatio n Last Name First Name M.I. Address 1 City State Zip Phone Email DOB Gender MR Setters m MS SIMMS Laurie 1313 Danger Ln Appleton CA 73111 310.555.555 5 Laurie@mail 04/29/81 F Mr. singletary Mike T 310.555.123 4 mts@mail.com Singletary Michael 310.555.123 4 mike@mail.com M Solvington Allen 5201 Marshall Lane Cupertino CA 91001 323.555.599 0 also@mail.com 05/30/75 Mr. soprano Cindy P. 222 Main St. Cupertino CA 91002 cindy@mail.com f Dr. Standish Bradford 1141 Duke Ave Los Angeles CA 91010 Stevens Allison 8726 Elm Ave Appleton CA 90009 310.555.555 1 01/01/01 f STEVENS ROBERT 2 2101 Data Ave Los Angeles CA 91010 rs2@mail.com 12/14/60 m Sr Tahoma Juan 20B Eldora Mexico City +52-55- 5222-2222 jtahoma@mail.co m 01/14/59 M Incomplete record Salut./gender mismatch Incomplete email CA ≠ 73111 Multiple normalization issues M.I. = 2 ? Moved last year (NCOA) Foreign address ? DOB is bad Potential dupe (ph #)
    22. 22. Think about your data quality 1. Is your data clean and rich enough to: – Target lapsed donors with the right message? – Build profiles of donor groups … segment? – Lifting average donations depends on targeted messaging … which depends on segmentation 2. Do you have the right data capture tools in place to grow prospects? 3. Do you know how your donors want to communicate? 4. Do you capture the right data and evaluate before returning to re-cultivate, re-engage? – Reducing attrition rates depends on this 5. Are you using service data and data visualization to tell a better story? 22
    23. 23. Back to the numbers 23
    24. 24. Data needed to calculate retention 1. Donor ID 2. Date of gift 3. Amount of gift 24
    25. 25. Retention Math 101 25 52,000 / 99,000 53% Existing Donor Retention 3,000 / 10,000 30% New Donor Retention 2012 existing donors 99,000 2013 repeat donors 52,000 2012 first-time donors 10,000 2012 first-time donors who gave again in 2013 3,000 (52,000 + 3,000) / (99,000 + 10,000) 55,000 / 109,000 50% Overall Donor Retention
    26. 26. Donor Dashboard™ 26 30%.97 53% 36%
    27. 27. File Growth File Decline GROWTH SCORE Retention and the Leaky Bucket 27 Existing Donors Retained 55,000 Donors Gained New Donors Reactivated 10,000 4,300 Lapsing Donors 14,750 Lapsed Donors 75,000 2 .5 1 .97
    28. 28. Move the metric 28 $196,448 Additional Annual Gross Revenue 50% 52%
    29. 29. Real World Fundraising Example Developing a Retention Action Plan 29 X X X X
    30. 30. Increase response → Increase retention. Define the objectives for your existing, single-gift, and lapsed donors. Increase Retention Increase Response Increase Second Gift Conversion Target single gift donors to increase retention from 18% to 20%. Increase Existing Donor Response Target existing donors to increase retention from 61% to 63%. Increase Lapsed Donor Reactivation Target lapsed donors to increase reactivation from 2% to 4%. Retention Action Plan
    31. 31. Use Scores to Raise More. Committed  Using science, predict who’s most likely to respond.  Develop campaign / contact strategy to target most likely donors.
    32. 32. Committed Donors Lifetime Value $707 24,781 Episodic Donors Lifetime Value $64 25,447 Casual Donors Lifetime Value $369 Retention Action Plan: Target Existing Donors* 34,273 *Donors who have given 2+ gifts in the last 0-24 months.
    33. 33. $$$ $$$ $$$ Committed donors Casual donors Episodic donors % of budget to allocate: Contact as frequently as budget allows. High perceived channels and packaging. % of budget to allocate: Reduce contact frequency by 15 – 20% Lower cost packaging and channels. % of budget to allocate: Reduce contact frequency by 50% or more. Minimize risk. Low package costs and channels. 72% 20% 8% Retention Action Plan: Existing Donor Clusters 34,273 25,447 24,781
    34. 34. ACTION PLAN | 34 << Best Performing Worst Performing >> New C am paign 1 C am paign 2 C am paign 3 C am paign 4 C am paign 5 C am paign 6 C am paign 7 C am paign 8 C am paign 9 C am paign 10 C am paign 11 C am paign 12 N ew C am paign 1 N ew C am paign 2 N ew C am paign 3 Committed 465 donors Casual 350 donors Episodic 348 donors RETENTION ACTION PLAN: EXISTING DONOR CONTACT STRATEGY Increase contact frequency to improve retention and generate additional revenue. Decrease contact frequency to reduce costs . Reallocate savings to increase retention and donor value. Increase revenue and decrease cost by developing an annual contact strategy by donor cluster. Step 1: Rank your campaigns from best performing to worst performing. Step 2: Map out the contacts for each donor cluster. 34,273 donors 25,447 donors 24,781 donors
    35. 35. RETENTION ACTION PLAN: TARGET SINGLE GIFT DONORS* MorelikelytoRespond 12.554 Unlikely but Valuable More Valuable 12,641 Potential Partners 17,898 Likely Loyalists Lifetime Value $214 Lifetime Value $72 Lifetime Value $36 *Donors who have given 1 gift in the last 0-24 months.
    36. 36. Expense Budget Frequency of Contact Channels Likely Loyalists Potential Partners % of budget to allocate: Unlikely but Valuable % of budget to allocate: % of budget to allocate: 53% 34% 13% Retention Action Plan: Target Single Gift Donors 17,898 12,641 12,554
    37. 37. ACTION PLAN | 37 REACTIVATION ACTION PLAN: TARGET LAPSED DONORS 25-60 Months Lapsed 41,241 Risky 45,886 Renewable 62,995 Reliable Lifetime Value $847 Lifetime Value $802 Lifetime Value $378
    38. 38. REACTIVATION ACTION PLAN: LAPSED DONOR CLUSTERS $$$ $$$ $$$ Reliable donors Renewable donors Risky donors % of budget to allocate: Contact as frequently as budget allows. High perceived channels and packaging. % of budget to allocate: Reduce contact frequency. Only best campaigns. Lower value channels and packaging. % of budget to allocate: Be cautious. Possible ‘Super Dupe’ with acquisition. Minimize risk. Low package costs and channels. 61% 27% 12% 62,995 45,886 41,241
    39. 39. Increase Retention Increase Response Increase Second Gift Conversion Target single gift donors to increase retention from 18% to 20%. Increase Existing Donor Response Target existing donors to increase retention from 61% to 63%. Increase Lapsed Donor Reactivation Target lapsed donors to increase reactivation from 2% to 4%.  Retention Action Plan Results   Goal Actual 23% 63% 5%
    40. 40. Overall Retention Best Practices 1. Thank yous! 2. Welcome series for new donors. 3. Superior donor services. 4. Show the donor how her dollar is put to work. 5. Know your donor – data hygiene is key! 40
    41. 41. In conclusion 41
    42. 42. 3 Takeaways 1. Retention is the best way to improve your fundraising results year over year. – And least costly! 2. Data quality matters. – And know your numbers! 3. Develop an action plan to meet your fundraising goals. – Hope is NOT a plan! 42
    43. 43. How we can help • DonorTrends offers … a Masterfile Audit and Action Plan. Ready for your review in less than a week, the MAAP is a GPS to exceeding fundraising goals. 43 • Third Sector Labs offers nonprofit data services, such as hygiene. We can start with a data quality assessment.
    44. 44. • Digital fundraising experts • Retention-focused technology • Donor Commitment / Satisfaction experts • Full Service Agencies / Consultants • Acknowledgment / Data Specialists Need fundraising help? 44
    45. 45. We’d like to hear from you! Please submit your questions… 45 Q & A
    46. 46. Thank you! Gary Carr President, Co-founder ThirdSectorLabs.com gcarr@thirdsectorlabs.com linkedin.com/in/gpfcarr DonorTrends.com caity.craver@donortrends.com linkedin.com/in/caitycraver Caity Craver CEO 46

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