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.

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