Blog

The Grim News About Your Fundraising Strategy

I am usually the voice of cheer and optimism. But today I have to share some pretty bad news with you.

And I hope (expect!) that  it will be a serious wake up call to you, your staff and your board.

AFP (the Association of Fundraising Professionals) has just published its biannual “Fundraising Effectiveness Survey.

It’s pretty scary. This report measures how well we are doing our job.

This study tells us how well we are keeping our current donors.

It measures the new donors and new money that nonprofits are bringing in against the donors we are losing.

Donor acquisition vs. donor attrition.

The question is: how much new money is coming in the doors and how much easy renewable money is going out the doors?

What’s the “churn” in our donor files?

Here’s the sad news: our net gain/loss was simply a breakeven.

  • “The annual survey indicates that nonprofits are losing nearly as many donors and gifts as they gain each year.  

We are losing as much money as we are gaining.

  • “Every $100 gained in 2011 was offset by $100 in losses through gift attrition — a net gain of $0.

So we are not going anywhere.

For every 100 donors gained last year – we lost 107 donors.

  • “Every 100 donors gained in 2011 was offset by 107 in lost donors through attrition — a net gain of -7.

Overall, 59% of donors in 2009 DID NOT renew.

  • “Overall donor attrition in 2010 was 59% — that is, 59% of 2009 donors did not give again to participating nonprofits in 2010.
 This breaks my heart.

 

We are all working so, so hard to find the pot of gold: the new donors.
Our board members hyperventilate about needing NEW money. While they sit by and let the old money flow right out the door.
Here’s the rub:

 

Renewing old money – current donors – is so very much easier than finding the new donors.

I read a survey recently that said it cost 10 times more for a business to find and secure a new customer than it does to get more business out of a current customer.

 

And you know this has got to be true for nonprofits as well.

 

Why, why are we beating ourselves to death – making the hard sell on new cold prospects? It’s exhausting, expensive and demoralizing.

Let’s have some more “donor love!”

When on the other hand, we could lavish attention on our current donors with spectacular “customer/donor service.”

 

We can make them feel so very special. Like insiders. Like friends. Like family. And then they will keep giving – more and more.

 

The fundraising blogosphere talks about this all the time. That renewing current donors is more important than new money. I write about it often.

 

Here’s my 10 point plan for you to cure this grim situation:

  • Be systematic: Track your new donor and renewing donor stats carefully.
  • Create a donor communications calendar – month by month.
  • Get marketing and design help so you can be really creative in the way you say thank you.
  • Use lots of channels: including personal visits, phone calls, emails, donor thank you events etc.
  • Get your tone right: friendly not lofty.
  • Let your donors know how you spent their money AND what you achieved with their money.

What do YOU think of these grim numbers about the state of our fundrraising today?

And what are YOU doing about it? Are you implementing any “donor love” strategies like I’ve listed above?

Share them with a comment below!

And also be on the lookout for our November INSIDERS lineup of cutting-edge webinars with the best pundits in our business – when we are going to tackle “How to Raise More From our Current Donors.”

Categories
  • http://twitter.com/rachelmuir Rachel Muir

    Great article, Gail! Love your tips. For readers hungry for more free ideas and tools I just did a blog post on ideas for hands on cultivation events to engage your donors and prospects: http://www.npengage.com/board-development/vip-volunteer-opportunities/

  • gailperry

    Rachel, love your blog post – and I urge my readers to check it out! Thanks Gail

  • http://twitter.com/nedgington Nell Edgington

    Gail, I agree the news about fundraising is grim. I would take it even further and say that traditional nonprofit fundraising is broken. Instead, nonprofits need an overall financing plan for their organizations that aligns mission, money and operations, engages board, staff and donors, diversifies revenue, includes capital, and helps a nonprofit raise the money required to meet their goals. I talk about this a lot in my ongoing Financing Not Fundraising blog series: http://www.socialvelocity.net/tools/financing-not-fundraising-a-social-velocity-blog-series/

  • http://twitter.com/HeatherActivate Heather Stewart

    Gail, thanks for the tips. A donor communication strategy is vital to keep donors engaged and I make sure I leave every client with one! However, I am still shocked by the number who don’t even thank donors – never mind communicate with them throughout the year – and can’t help but think that many of the 59% not renewing possibly didn’t get a thanks for their donation in the first place (not a good thought). Really enjoy your blog – thanks for the posts!

  • gailperry

    Thanks Heather, I agree, thanking donors is just so basic. No wonder people don’t renew their gifts!

  • gailperry

    Nell, agree totally. Earned income needs to be an important part of the revenue mix. Adds stability!