How to Avoid Donor Churn Rate with Technology

Donor Loyalty Ideas for 501(c)3 organizations

Whether you are starting a 501(c) 3 or trying to maintain one, coming up with fundraising ideas to keep your donors is always top of mind. If you Google the term “donor loyalty,” you see hits reflecting the strong connection between donor loyalty and fundraising. You may ask, what’s new about that? In this article, I summarize a recent industry study outlining the impact of having good data and technology capabilities can help you avoid donor churn.

Donor Loyalty= Nonprofits Using Technology

The goal of loyalty is nothing new. But, perhaps the idea of using your donor data to help loyalty may be an elusive thought for some.  Abila, a software provider in the nonprofit and association software, has recently released a nonprofit study that highlights what is referred to as “the new wow factor in donor loyalty”. Their Donor Loyalty Study points the way to specific steps to ensure that your donor pool remains interested, generous, and loyal.

The “new normal”: know your donors; segment and personalize communications. In short, the study underscores this conclusion:

“The reasons donors engage and give are very personal, and there is a very high tolerance for personal communication from the organization to the donor—it’s the new normal in our current highly-connected culture.”

The “Big D” is Data 

Just to clarify, personalizing communications in this study means going beyond simply dropping in the donor’s name at the top of an email—it requires that you have a relationship with the donor and multiple data points in your donor database software on every donor for effectively segmenting your communication touches.

While the database is important, you data is the most valuable asset in any nonprofit organization. The amount of data available to nonprofits, including web, social, and interactions, means that nonprofits need to shift their focus from collecting to analyzing. This data can help you do so many things: Gain a better understanding of which communication channels are the most effective, Determine ask amounts, Develop strategies for effectively facilitating events and peer-to-peer fundraising, Increase recurring giving.
Data can help provide that finer level of segmentation which helps donors feel listened to and keeps them loyal. For example, it is not Dear Joe, It’s time for thinking about a new gift. Rather, Dear Joe and Kathy, We want to thank you for all your volunteer work last season and hope you enjoyed your recent time away.

Communication Impacts Donor Loyalty 

Now the question is, how best to communicate and how often? There’s data for that, too: except when it comes to donor recognition (where the different generations align closely), generational differences pop up in their touch preferences.

Frequency: The study shows that, “For the most part, donors like communication from the organizations they support on a monthly or quarterly basis (52 percent), although Millennials are more comfortable with (and more accustomed to) more frequent communication.” As you might expect, Boomers and Matures prefer an average of quarterly touches.

What is the best format? The study demonstrates that although content still is king, when it comes to format, “context is queen.” When your desired outcome is a new gift, renewed membership, filling new volunteer roles, or selling tickets to an event: a two- or three-minute YouTube video is most likely to work.
It sometimes is necessary to showcase the organization’s mission—for instance, when running a capital campaign or a new membership drive. For this purpose, YouTube videos ranked most effective followed by a more lengthy written story describing the organization.
When it comes to bottom-line engagement or donor retention, a short (two or three paragraphs) letter or online article won the day, followed, perhaps not surprisingly, by a Facebook posting.

The common elements? Brevity, brevity, brevity along with ease of access and consumption. Millennials—the younger cohort that both associations and nonprofits need to court for the future—especially prefer more frequent touch points as long as they are brief.

Active Engagement: Giving vs. Volunteering preferences

The main event may be fundraising but as every savvy CEO know, volunteering helps tether donors to your cause. The study finds that “Forty-seven percent of donors do something with an organization: volunteer, attend events, or play a leadership role.”

Here, too, knowing your donors beyond name recognition is essential: segmentation reigns when it comes to donor engagement specifics. A few highlights:

  • For loyal donors whose income is $200,000 or more annually, most—80 percent—are “more likely to serve in a volunteer leadership role.” Their key donating preferences include goods and services (67%), giving by check (56%), and online gifts (51%).
  • Millennials and Gen Xers are more likely to give online while Boomers and Matures prefer writing checks. Mobile will continue to be an essential part of how nonprofits engage with supporters and expand the reach of their staff. Nearly half of all email messages are now read on mobile devices, which means having a mobile-friendly approach to engaging donors has never been more important. For all generations but even more so with Millennials, mobile devices are quickly becoming the platform of choice for computing and collaboration versus sitting behind a desk, which will change how organizations leverage data and drive mission delivery.
  • Events are, hands down, the most effective engagement tool for volunteering and for giving. Want to help current donors feel more loyal? Hold an event. Want to increase volunteering and giving? Hold an event. It should go without saying that your events have to appeal to your donors’ interests, reasons for donating or volunteering, and needs to socialize, but when they meet those criteria, events have the greatest impact on donor loyalty.

Can Your Donor Database Offer that Wow Factor?

The study illuminates the need to incorporate multiple generation-based and personalized communications, hold more events, and utilize more volunteers annually to strengthen and curtail donor attrition—ultimately, the basis for your organization’s success.

Step back, then, and ask yourself, can my current fundraising software accomplish all that I need it to do to succeed?

If you find it lacking in storing demographic attributes, events management, segmenting of data, or communication, take heart in the fact that the right donor database that is the perfect fit for your mission and budget already is available.

Tremendous Technology Transformation in Nonprofit Sector

Speaking to so many nonprofits of all sizes, I see first hand how technology is causing an ongoing transformation in the nonprofit sector— from the way supporters engage with nonprofits to the way nonprofits are able to fundraise, market, and manage data—and this trend will only continue to evolve.

Today, tremendous opportunities exist for even the smallest nonprofit organizations to use technology to deliver their missions in very effective and scalable ways. And, a simple choice to procure a donor database may make a measureable impact on your donor retention efforts now.

We at SmartThoughts are specialists in matchmaking the right software with the needs of every organization. Please contact us to learn more and start on the path of wowing your donors.

Donor Database and Fundraising Software Advice

Excel vs. Database: Why A CRM Database is Better

Excel is not a CRM Database


Why do we need to spend so much money on a new database? This is a typical question many nonprofit executives get asked from their board and even among themselves. It’s logical to gravitate to something like Microsoft Excel to manage those lists & prepare those key reports. In this article, I am going to pick on Microsoft Excel and discuss the impact of using a flat file database as a central repository for your constituent data and why you should consider other database choices.

Why Excel Shouldn’t Be Your Database

The idea of simply buying Microsoft Excel is very tempting. It’s inexpensive, many businesses have experience with it, and after all, it’s made by Microsoft. I get it. On the surface, Microsoft Excel appears for most (your board) to be a logical choice to manage your member, donor, or constituent data. But, the easiest choice and most inexpensive (at least from a hard dollar price) isn’t always the best course of action for your organization.

The Microsoft Excel flaws in managing constituent data

It’s obvious every organization (nonprofit or for profit) has to manage their clients data. In the nonprofit world, we call it something a little different but the principles apply across organizations. We keep track of constituent profile information, record donations, and track gifts. And, most small nonprofits I talk too use Microsoft Office.

So, I concede to you that Microsoft Excel is great with calculating and dealing with numbers. And, in a very archaic 20th century manner it can track your contacts, categorize them for you, and even allow you to make a note on various activities. However, that’s where it ends. There are some fundamental flaws to consider.

What is the Big Problem with Excel as your CRM Database?

Flat File:

What is a relational database? I am glad you asked. From my friends (well, I don’t know them) at Techopedia:

A relational database (RDB) is a collective set of multiple data sets organized by tables, records and columns. RDBs establish a well-defined relationship between database tables. Tables communicate and share information, which facilitates data searchability, organization and reporting. RDBs use Structured Query Language (SQL), which is a standard user application that provides an easy programming interface for database interaction.RDB is derived from the mathematical function concept of mapping data sets and was developed by Edgar F. Codd.

Translated into real language, this means it’s not designed to handle relationships between data, such as when one record (such as a member, donor, customer) needs to link to several other records (like a dues payment or gifts).

A flat file solution like Microsoft is an absolute disaster. First, you have to add a new column for every new piece of contact information; even if only one person on your list has three email addresses, you will need three email columns. You cannot easily link donor pledges to payments, or track “soft credits” such as crediting individuals for corporate matches or gifts made through a family foundation for example.

Relationship Management:

Tracking relationships is an important aspect of major gifts work, membership management, and customer service. Excel is not designed to track relationships between constituents, such as spouses with separate records, members of households, or employment relationships.

Activity Management:

Excel will not notify you of upcoming tasks, like a tickler to remind you to follow up with a prospect, submit a grant application, or send a birthday card. Nor will it alert you to move someone to a lifetime giving club when their cumulative donations reach over $X (e.g., $100,000). It can also be cumbersome to analyze Excel data for complex patterns, such as looking for donors have given for over five years, have a cumulative giving level of over $10,000, and attended more than two of your events.


Security, reporting, and query options are limited. Anyone who can update your spreadsheet can update everything. It is easy to hit the wrong key and accidentally delete or change data. If you don’t catch an error right away, you better have a good, recent backup on hand.

Data Management:

Finally, if your fundraising program is successful, your spreadsheet can grow very large. Spreadsheets with thousands and thousands of records become hard to view, print, or manipulate. Excel does not provide a rich array of tools to maintain data integrity.

Necessity is the Mother of Invention

I am amazed by some of the ways I have seen nonprofit staffers deal with their lack of technology. So, it’s not uncommon for some to have created some fabulous ways to deal with the challenges of their data by using something like Microsoft Excel to manage their organization. But, with entry level low cost Tier IV cloud based solutions on the market today, it’s a shame that many nonprofits still use Microsoft Excel to manage their most important asset, their people. And, further rely on it to maintain their critical relationships.

Can you get a Donor Database or Member Database for less than $1 Dollar a day? 

Amazingly, yes you can! That is why it is absolutely ridiculous in this day and time to start out with something like Microsoft Excel to run your nonprofit. There are so many relational databases on the market today for even the smallest of nonprofits to utilize which can do so much more than just store data:

  • Member of Donor Management
  • Events Management
  • Website Building
  • Email and Mail Merge Communications Management
  • Community Management
  • Online Payments for donations or dues
  • Development of Forms
  • Reporting

The value of using the best fitted database at your nonprofit

In my opinion, your database should be the intellectual capital of the organization. There shouldn’t be one person or multiple staffers who have different versions of data for each facet of their respective area (Events, Member Management, Donations, Communications etc.). Your database should make it easy for you to look up records, donors, view giving histories, understand the nature of your relationships, and analyze data.

It should be a blessing and not a curse to those who use it.

Selection of a database solution is a critical decision with major strategic and financial implications. When starting your 501 (c) 3 or association, don’t make the error of choosing the easy path to hell using Microsoft Excel.

If you need more convincing, give us a call. We would enjoy having the opportunity to share with you why we believe many of the Customer Relationship Management systems for nonprofits are a better choice for your nonprofit than your Microsoft Excel alternative.

Until next time, keep SmartThoughts in mind.

Database Software for 501(c)3 and Associations

Unleash the Power of Your Online Membership Directory

Using Online Member Directory Database for Member Search

Sure, you are likely using an online member directory with your member database. For most trade and professional societies having at least a formal list of their members’ names and contact information in an online directory is paramount. Allowing for member searches is a must have. But, from my experience it usually sits in a lonely corner of a website (or worse, in a hard copy folder hidden away on a shelf or in a file cabinet) and not used very well. In this article, I explore how and why a member directory can and should be used to enhance member services at your nonprofit association.

Before I get to far into this piece, if you have only a printed directory, it is high time that you put that printed directory to work for your members and your association. Get it online and fast! Why does it matter?

I am glad you asked. Let’s take a look at the power that is lying dormant in your printed directory as opposed to having an online membership directory.

Unleash The Power With Your Online Member Directory

Member Engagement, Anyone? Anyone?

Consider this: your members are tugged in multiple directions by organizations competing for their membership, regardless of the type of association you have. Yet the long-term success of your association depends on member retention and growth. Now consider why most of your members joined up in the first place. Most likely they sought more engagement with like-minded people.

From that perspective, I suggest my clients take a new look at their membership directory and ask these three questions—or better yet, poll their membership:

  • What information about our members would make this directory more useful and interesting to our membership? Awards? Education? Years of first-hand experience? Members’ other professional or extracurricular affiliations?
  • How do we make this directory more interactive among our membership? For example, do you include links to each member’s social media sites? Professional websites?
  • Which links to other sites would our members find helpful, amusing, exciting, or just interesting?
  • Consider segmenting member categories for ease of use, and don’t forget to ask members to update their information quarterly.

In this blog on membership management software trends I wrote that, “A recent white paper published by Abila, the nonprofit software firm, cites a study which concludes that ‘38 percent of those who don’t renew their association memberships site a lack of engagement with the organization.” Engagement is key to retention.

You can power up your directory and make it come alive as a retention tool by adding data and links that will boost engagement both between prospective members and your association and—most important—among your members. Remember, that likely is why they joined.

Links Can Provide Power to a Member Directory 

Research shows that the once-lonely and dormant membership directory can become a powerful vehicle for attracting new members. Here’s how:

  • Get your directory to boost your SEO (search engine optimization) ratings through placement in Google’s Real PageRank. According to Business Directory Plugin, “The way Google assigns your PageRank is by examining how many other sites link to you and the overall quality of those sites.”
  • In other words, in PageRank, linking is king, especially linking to your directory. As Business Directory Plugin sagely points out, “Ultimately, the best way to promote your site is by having other people promote it for you on their sites. Your membership is a rich resource for ways to link to your site—so mine that resource on a regular basis.
  • Try engaging with other associations, small businesses, professional organizations, or public agencies to cross-recruit members or at least, mutually raise awareness of each other’s sites through links. Look for win-win ways to attract links, even from seemingly competitive sites. One possibility is reaching out to local area businesses willing to place links or banners on your directory site. Consider adding a mission statement landing page to your directory to which these other sites can link.
  • Include your directory as part of a larger one to boost your site’s SEO. Here are just a few: Google’s My Business Directory, Bing’s Places for Business, or Yahoo’s Small Business Directory. Your region likely has local professional or geographic directories which serve a similar purpose such as a chamber of commerce site.

Banners are the ultimate visual magnets. Depending on how strong a marketing drive you prefer, you may want to step up from links to banners and small graphic ads.

You can submit [your ad or banner] to sites like Google AdWords or The Banner Exchange, which will feature your image on hundreds or more sites, giving you access to potentially thousands of new visitors that would never have seen it otherwise.

Grow Your Member Site Traffic with Added Content in Your Online Database 

Associations are terrific sources of your most relevant information. And, content curation is one of the fastest ways to achieve growth in web traffic for publishing, directory, business and media sites. Content curation websites attract vast amounts of traffic. As you start curating content of a particular type, in this case with a member directory, you will eventually start attracting an audience that favors content of that type such as consumers which desire the help of a professional member. If you’re the source your readers and the public comes to your website when they need new information on a given topic, then your association is doing your job effectively to help members make more money!

Citing the Results of a Member Directory 

I visited last week with an association which migrated to a new membership database which included a directory. Within weeks, the organization was able to reach out to their members and other members within their industry in an effort to engage them more because of the member directory. They used many beneficial features to offer corporate members higher level listings in the system, thus giving the more exposure in the directory.

Before implementation, the association emailed members to send emails to listing holders encouraging them to update their information. With an export feature, the association was able to better format the directory listings to be more compatible with graphical applications like InDesign or Illustrator.

Once you decide how best to unlock the latent power of your membership directory, can your current software handle the new automated tasks? If it falls short, know that the software you need to power up your directory already exists to fit the size and budget of your association.

We excel in marrying the right software to the specific needs of each association. Contact us to see how we can help you unleash the power of your directory.

Membership Software Reviews