Philanthropic Impact & Insight: Has fundraising failed?

Why can’t nonprofits retain donors? That question was raised recently at the AFP’s Fundraising Day in Wisconsin by a panel of national experts. A panel comprised of Laura Fredricks, Adrian Sargent, Karen Osborne and Stacy Wedding were chiefly concerned how nonprofits can’t keep donors.

Laura Fredricks says both nationally and internationally, “We are churning donors…we need to find out where we’re loosing them.”  The real issue is not just stewarding donors; but also taking care of new donors to who fall off at alarming rates after a first gift.

Adrian Sargent put it this way, “As a sector, we have honed our skills at very successfully recruiting people who will never support our organization again.” Sargent says nonprofits loose about 70% of donors between the first and second year, according to the fundraising effectiveness project. We’re driving donors away!

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Having worked in the nonprofit sector for over 30 years, this seems like a lingering problem. In public radio in the 1980’s we certainly paid more attention to acquiring new donors than keeping the old ones.  

In direct mail school (which I attended in the 90’s) we were taught to set aside a portion of our budget every year for new acquisitions to compensate for the donor fall out. Once a donor gives they usually won’t hear from us again until we send another ask. In fact, we often bombard them with messages about our need—not their interest or connection to the organization.

Sargent suggested that, “We need to think in a smarter way about the kinds of people we bring into our organizations. We need to bring in the right kind of people who care passionately about the work we do.”

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Karen Osborne echoed, “I’m worried about donor retention.”  Osborne points out seven-figure donors start with small gifts and you have to pay attention. “As that $10, $25, $100 donor walks out the door, there is that possibility they’re the next $10-million donor that we just let go.”  Osborne adds, that donor hasn’t stopped giving they’re just giving down the road.

Both Osborne and Stacy Wedding underscored that building donor retention and loyalty lead to planned gifts.  Wedding reminded us we’re on the verge of an intergenerational transfer of wealth of “…about $41 trillion, and that $6-25 trillion of that will be given to charity, according to a Boston College Report released in June. “

In this environment, the panel stressed it’s more important than ever to treat donors well. Fundraisers need to increase retention by paying better attention to donors interests, passions and needs and treating everyone as a major donor.

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If fundraisers have failed at retention over the years, the incentive now is greater than ever. With the transfer of wealth from baby boomers, cultivating donors who give even small gifts has the potential to land that seven-figure transformational gift.

With so much at stake, retention is something fundraisers can no longer afford to fail at.

Peter Zehren is vice president of communications for the AFP SEWI and chief development officer at the Alma Center, Inc.

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