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4 Insights from The State of Modern Philanthropy 2019 and What It Means for Your Fundraising

Published by Brady Josephson

We’ve got a problem. A big problem actually. A donor retention problem.

Now you may be reading this and thinking to yourself ‘duh, I know that’ and you probably do. But then why do we see charts like this:

From fundraisingreportcard.com

That’s from The Fundraising Report Card benchmark data, and you can see that we’re actually getting worse at retaining first-time, repeat, and returning donors. So either donor retention isn’t that important to nonprofits and they’re not trying to make progress here or whatever it is we are trying is not working. Or at least not yet.

I think it’s more of the latter, personally, which is where some data may help unlock some insights. We will be publishing a study later this year on cultivation and what happens in the first 45 days after you sign up for email or make a donation to try and help shed more light in this area but the good folks at Classy are also taking a more in-depth look at this in their State of Modern Philanthropy 2019 report. Specifically, they are looking at the return donor behavior and, after reading it, here are 4 insights and takeaways to hopefully help you in your pursuit of greater retention.

1. You can engage people, and ask, sooner than you think.

One of the key things the report looks at is timing. As in how much time goes by between making a one-time donation and the returning next action — be it a donation or other something else. Here’s what they found as it relates to a returned gift, either one-time or recurring:

Two things should immediately jump out at you:

  1. There is a spike around the 365-ish day mark both for recurring and one-time return donors
  2. Other than the 365-ish day mark, by far the best chance for a 2nd donation — both one-time and recurring — is within the first 45 days

#1 is largely related to Giving Tuesday and year-end campaigns where the “did we condition donors or are they conditioned and we responded” debate rages on (I think it’s a little of each) but #2 is often surprising to many marketers and fundraisers.

I agree with the idea, in principle, that we shouldn’t be asking and asking until we have thanked the donor and done some sort of reporting back — even in a small way — but who says that has to take 12 months? Can’t you do that in 45 days? Heck, why can’t you do that in a week? Or immediately on a thank-you page?

As our attention spans shrink, inbox competition heats up, and content expands at a ridiculous rate, the opportunity here is to engage with people when they are most engaged. Which is right around when they take an action signalling to you, the savvy marketer, that they are interested in something. So why not send more content, more thanks, more updates, more reports, and, yes, possibly even more asks in this high-engagement period?

That may not seem “donor-centric” but do you know what is really not “donor-centric”? Waiting months to provide any updates to a donor and then asking them a bunch to give again when we want them to.

Key Takeaway: How can you engage one-time donors sooner after their gift to move towards a second or even recurring gift?

2. Main donation page givers are different than ‘social’ givers

One of the neat things in the State of Modern Philanthropy report is that Classy tracks giving behavior across their different campaign types and we can get some insights to how the giving experience, or perhaps even the donor types themselves, differ.

For example, in the report they looked at the referral source for the first and return donations and specifically looking at social here’s what they found:

Two things jump out here:

  1. Crowdfunding, Peer-to-Peer, and Events are all a lot more ‘social’ than a main donation page
  2. Other than the main donation page, there is a roughly the same chance or higher of return donors coming back through social

The first point is something that makes sense. Those campaigns are typically built to be more social and in the case of peer-to-peer, friends are making the asks and driving the traffic largely from social (even if they should be using email a bit more…). So to respond to social links in that context to make a donation makes sense.

Less so to your main donation page. Think about it. There you are cruising through baby photos, Game of Thrones links, and photos of your ex and some donation link comes up. IF you actually click and make a donation it’s probably an unreal job of marketing or more of a fluke which is hard to replicate. The numbers here seem to suggest it’s more of a fluke.

So instead of trying to get your donors to give from social, or even share a general page or campaign, use your social capital to focus on things that are valuable to your donors, namely content (like email acquisition offers) or things that are community centric like crowdfunding projects or peer-to-peer campaigns.

Not EVERYTHING is intended to be a natural fit on social so don’t try to make it.

Key Takeaway: Some styles of giving — crowdfunding and peer-to-peer — are inherently more ‘social’ than others and where more social strategies should be deployed.

3. The extra value of recurring donors.

If you aren’t sure why recurring donors are so valuable to your fundraising here are 3 reasons. But just in case you needed more there’s this:

Recurring donors don’t stop at being the most regular, loyal, and larger of your online donors, they also give above and beyond throughout the year. When disasters strike, new projects are started, or immediate needs arise, often recurring donors are the first ones to support. Which makes sense. They, more so than many other donors, understand why your organization and its work is so valuable so why wouldn’t they want to step in and help when the need arises.

This isn’t to say you should be constantly asking these folks — getting asked less is one of the perceived benefits of being a recurring donor after all — but you don’t need to shy away from providing opportunities for them to make additional donations throughout the year.

So when you factor in the additional one-time gifts the value of recurring donors goes up yet again.

Key Takeaway: How can you provide great additional and value-add giving opportunities to your recurring donors?

4. The real value of peer-to-peer fundraisers

In another life, I worked for a peer-to-peer and crowdfunding technology focused company and one thing that never made sense to me was how the ‘standard’ metrics used to evaluate the success of these strategies, beyond revenue, was donors acquired. Even though it was clear, quite early on, that these donors were very difficult to retain.

But the strategies and tactics focused on how to ‘convert’ these social donors who gave to support their friends and family to be organizational donors and do you know who kind of got lost in the mix? The fundraiser. Classy’s report found that only 14% of fundraisers returned to create another campaign in the 2-year period.

So just like the donor retention problem, all that work to get a fundraiser AND their work to recruit their friends somewhat walks out the door with them. And here’s why that is so important:

The median amount raised by peer-to-peer fundraising pages started by return fundraisers was more than double the amount raised by peer-to-peer fundraising pages for one-time fundraisers—$501 vs. $222, respectively.

It may not be easy — just as recruiting recurring donors isn’t as easy — but it certainly looks a heck of a lot more valuable than getting more first time fundraisers.

As someone who is now in the 9th year of doing a birthday fundraiser, I can tell you that, while not easy, it certainly gets easier with each year. The list of people who have supported me goes up as well as their trust in me and the causes I support with their funds.

Key Takeaway: How can you focus on your fundraisers to improve retention and return fundraiser rates?

So…

Those are just a few of the insights and ideas that jumped out to me while reading it but we all can, and need to, improve when it comes to retaining donors and any insights into how we can get better return donor rates is more than welcome so be sure to check it out and read for yourself here.

About the author:

Brady Josephson

Brady Josephson is a charity nerd, entrepreneur, digital marketer, professor, and writer. At NextAfter, he focuses on business development and partnerships, content creation, and marketing. He's also a huge Liverpool FC fan. #YNWA