Fact-packed presentation from the 2013 DMA Washington Nonprofit Conference. Chuck is the Founder of Target Analytics and Chief Scientist at Blackbaud. Read the companion blog post at: http://www.event360.com/blog/identify-and-invest-in-your-most-passionate-supporters/

1. NEW DONOR TRENDS
Center of Philanthropy Symposium
November 2012
02/07/2013 Customer & Market Insights 1

2. DECLINE IN NEW DONOR ACQUISITION
2001- 2 0 1 0
% Change % Change
Sector Total # New Donors New Donors/Year New Donors/Year
(# of organizations) 2001-2010 2001-2007 2007-2010
Advocacy (16) 6.6 million -9.5% 14.4%
Hospitals (23) 1.2 million 17.2% -0.4%
Cultural (16) 2.2 million 5% -2%
Environmental (37) 16.4 million -23.1% -11.0%
Health Research (30) 117 million 12.5% -14.8%
Human Services (36) 6.7 million 4.7% 2.5%
Colleges (34) * 350,000 -18.9%
* The % Change for colleges is for the period 2006-2011
SOURCE: TARGET ANALYTICS
02/07/2013 Customer & Market Insights 2

3. DECLINE IN FIRST YEAR RETENTION
2001- 2 0 1 0
Sector Retention Rate Retention Rate % Change % Change
(# of organizations) 2001 2010 2001-2007 2007-2010
Advocacy (16) 34.0% 27.4% -19.5% 0.1%
Hospitals (23) 21.2% 18.1% -2.7% 0.6%
Cultural (16) 33.3% 26.8% -13.7% -6.5%
Environmental (37) 29.7% 24.0% -18.2% -1.4%
Health Research (30) 20.9% 19.3% -11.7% 0.4%
Human Services (36) 30.8% 26.3% -10.9% -4.2%
Colleges (34) * 30.8% 28.1% -8.8%
* The % Change for colleges is for the period 2006-2011
SOURCE: TARGET ANALYTICS
02/07/2013 Customer & Market Insights 3

4. SUMMARY OF CHALLENGES
• Acquisition is increasingly more expensive
• First year retention rates are declining
• Trends started prior to downturn and will likely continue
after recovery
• Younger donors are less loyal than older donors
• Low ROI on new donor acquisition (and getting lower).
- too costly to acquire new donors to replace lapsing donors
• WHAT CAN WE DO? !!!
02/07/2013 Customer & Market Insights 4

5. 02/07/2013 Customer & Market Insights 5

6. EMPHASIZE DONOR RETENTION OVER ACQUISITION
• View donors as valuable assets!
• When acquiring new donors, factor in whether you will
retain the donor, and at what dollar level
• Fill the holes in your leaky bucket!
• Why did the donor give? Stop giving?
• According to Adrian Sargeant, Ph.D. from Indiana
University’s Center on Philanthropy
“A 10% increase in donor retention can increase the
lifetime value of the donor database by up to 200% .”
02/07/2013 Customer & Market Insights 6

7. 02/07/2013 Customer & Market Insights 7

8. EMPHASIZE DONOR RETENTION OVER ACQUISITION
• View donors as valuable assets!
• When acquiring new donors, factor in whether you will
retain the donor, and at what dollar level
• Fill the holes in your leaky bucket!
• Why did the donor give? Stop giving?
• According to Adrian Sargeant, Ph.D. from Indiana
University’s Center on Philanthropy
“A 10% increase in donor retention can increase the
lifetime value of the donor database by up to 200% .”
02/07/2013 Customer & Market Insights 8

9. 02/07/2013 Customer & Market Insights 9

10. EMPHASIZE DONOR RETENTION OVER ACQUISITION
• View donors as valuable assets!
• When acquiring new donors, factor in whether you will
retain the donor, and at what dollar level
• Fill the holes in your leaky bucket!
• Why did the donor give? Stop giving?
• According to Adrian Sargeant, Ph.D. from Indiana
University’s Center on Philanthropy
“A 10% increase in donor retention can increase the
lifetime value of the donor database by up to 200% .”
02/07/2013 Customer & Market Insights 10

11. FOCUS ON LIFETIME VALUE, NOT RESPONSE RATES
• Be willing to invest in your donors, e.g. thank you calls.
See Donor-Centered Fundraising – Penelope Burk
• Determine a donor’s potential early in your relationship
and allocate resources accordingly
• Be Donor-Centric, not Campaign-Centric
02/07/2013 Customer & Market Insights 11

12. 02/07/2013 Customer & Market Insights 12

13. FOCUS ON RESULTS, NOT EFFORT
• Set goals and measure your results
• Find peer groups and benchmark your results
• Checklist Manifesto, by Atul Gawande
• Identify best practices
• Find ways to collaborate to maximize results
02/07/2013 Customer & Market Insights 13

14. INVEST IN YOUR MOST PASSIONATE SUPPORTERS
• Organize yourself to recognize a donor’s passion for your
mission
• See yourself through the eyes of your donors
• Be willing to invest in your donors
• Test investments and track results carefully
02/07/2013 Customer & Market Insights 14

15. 02/07/2013 Customer & Market Insights 15

16. KEY TAKE-AWAYS
1. Emphasize donor retention over donor acquisition
2. Focus on a donor’s lifetime value, not a campaign’s
response rate
3. Focus on results, not effort
4. Identify & invest in your most passionate supporters
02/07/2013 Customer & Market Insights 16

17. THE BLACKBAUD INDEX
Get up-to-date data on fundraising trends and valuable analysis by leaders in the sector.
Subscribe to free monthly updates by texting "index" to 69866 or via email by
signing up at www.blackbaud.com/blackbaudindex.
02/07/2013 Customer & Market Insights 17

18. WWW.SOFII.ORG
A unique online resource of everything you could want to
know about fundraising from c.1500 BC to the present day
• Over 300 of the best fundraising ideas ever,
at your fingertips 24/7…for free!
• Contribute your own exhibit.
• Sign up to receive hot news and
updates.
• What three things will you do
differently, starting next week?
02/07/2013 Customer & Market Insights 18

19. QUESTIONS?
Chuck Longfield, Chief Scientist
chuck.longfield@blackbaud.com
02/07/2013 Customer & Market Insights 19