Mary Moss gives Fourth Quarter advice.

By Mary Moss.

You have been working all year long to keep your head above water, to strengthen the relationships you have, and to identify new ones along the way.  You have learned how to operate remotely, and even ask for money remotely. While filled with gratitude for what you have been able to accomplish due to the generosity of so many, you are still telling us that you are worried about your donors not giving as much or at all this year. Even with powerful relationships, you are worried about money.

So now, here you are, headed into the fourth quarter. What is your next best play when the times are so uncertain?

Your next best play is to concentrate on donor retention of your individual prospects.

As you enter the last quarter of the year, you need to plan your strategies.  According to Giving USA 2020, of the $449.64 billion given in 2019, 69% came from individuals, ~4% from corporations, 17% from foundations (many are connected to individuals), and 10% from bequests (these are individuals, too).  Year in and year out, individuals make up the largest charitable giving constituency, especially when you consider their multiple giving vehicles.

Nonprofits often do a terrible job retaining donors. You cannot afford to let your donors drop off your rolls, because it is too expensive to get them back. If half of your donors are leaving you each year, as some data supports, you are offsetting other gains from new and increased gifts.  You may actually be losing money.

Giving USA 2020: The [Fundraising Effectiveness Project’s] Quarterly Fundraising Report showed a few important trends from 2015 to 2019.

The average donor retention rate for nonprofits is now 43% — for every 10 donors giving in Year 1, only 4-5 donors gave in Year 2. The rate varies of course depending on organization size, age, budget, etc.

The average retention rate for new donors has been creeping downward from 25% toward 20%. Only 2 in 10 new donors in Year 1 gave the following year.

The average recapture rate for lapsed donors fell from 6% to 4%. This means even fewer of your Year 1 donors who skip Year 2 will return in Year 3.

Tips for renewing your donors:

  1.  Examine your data. Search for donors who have supported you in the past 3-5 years, and especially those who supported you last year but who have yet to renew. Sort them by giving amount, and if possible, overlay wealth-screening data on top of their giving records. Select your top 25-50-100 prospects (or what is reasonable at your organization), and create ask amounts for each person. See this article for how to maximize your data.
  2. Be clear in telling your story and outlining your needs. Let those closest to your organization know what you need, how much, and for what purpose. Your request must connect the donor to your projects, people, and programs. Donors want to have an impact, no matter the size of their gift.
  3. Ask. Of those who have tried raising money by asking and tried it by not asking, all prefer the results they get when asking. When donors are queried about the most important factor in why they give, overwhelmingly, their answer is “who asked.”  Remember that as you make donor assignments.  Be strategic and intentional – and personal.
  4. Pay attention to relationships. According to Giving USA 2020, while the total dollars given in 2019 went up, the number of households went down. Thousands of people have given to natural disasters, and they disappear the next year because they do not feel the continued impact of giving. Take special care in thanking and reaching out to those who have shown interest in you.