Donor retention tells half the story

Keeping donors is just as important as getting them. That's been the focus over at The Agitator recently, and it's a good thing to focus on.

One recent post featured the case of a Canadian organization, Animal Alliance Environment Voters (AAEV): How To Retain 70% Of New Donors. The case, coming direct from the organization, included these powerful facts:

• 70% retention rate for new donors; 90% for those who have given more than one gift.
• All new supporters come through word of mouth and earned media.
• The organization has grown.
• Net income has increased dramatically.

For all this success, they credit their excellent treatment of donors. And I'm with them all the way. That is the path to success. But then they drop this bomb about donor acquisition:

We don't believe it is ethical to tell a donor that "your donation will save [something]" when in fact the organization is using all of the donor's contribution and most future contributions to pay off postage, printer bills, ad buys, or TV time.... In most direct response programs, new, modest and small donors will never make a positive contribution to an organization's mission unless they die and leave a sizable bequest.

That is not an accurate description of an organization that's actively acquiring donors. It's a description of an incompetent and/or unethical organization.

It's a foolish claim to throw out there, and it seems to reflect ignorance of how fundraising works.

And if that weren't enough, they go on to suggest that organizations should suspend all new donor acquisition for five years, and spend that time figuring out how to care for donors.

That's like advising someone to stop eating until they have a PhD in nutrition. Five years with no new donors would put most organizations into an irreversible death-spiral. All the enlightened donor respect in the world would make no difference.

So my guard is up. These comments make me wonder if AAEV understands its own situation.

One of the hallmarks of a dying donorfile is amazing retention rates, superb campaign response, and other excellent loyalty measurements. These numbers all get better and better as the file atrophies. When you aren't getting new donors, those who stay with you longest are your elite, the real believers.

I've known many organizations that were smugly proud of their retention rates -- and completely unaware that they were in the middle stages of dying.

It's possible that AAEV really does get enough new donors to keep them viable, or even growing. That's not normal, but if it's happening, good for them. But for now, I'm skeptical.

I can't go along with The Agitator and say AAEV deserves a raise. I think they need an in-depth performance review. This should quickly be followed by either that raise or by termination, depending on the findings of the review.

Comments

[Craig]

Hi Jeff

Amen to that. I found the AAEV post interesting, but felt uneasy at what they were saying. I couldn't place the source of my unease, I think you've hit the cause of that unease on the head.

I have the same problem at work. We haven't done any DM acquisition for years and the result is that the donors who've given in the last few years respond at an incredible rate (30%+ for the last mailing) but in decreasing numbers as our donors (literally) die off.

You've inspired a post I think!

All the best

Craig

[Jeff Schreifels]

Jeff, I cannot believe the Agitator would promote this. These guys are smarter than that...aren't they?

[Bill]

For a creative guy, you know your numbers Jeff. AAEV's metric's point to an organization on the verge of irrelevancy.

[Tom Belford]

Perhaps people should read the entire article, which includes ... "Since 1999, all new AAEV supporters have joined due to word of mouth and earned media. Despite no direct response fundraising since 1999, the organization has grown..."

Moreover, the AAEV remarks in their totality suggest a level of sophistication that is rather unlikely to be presiding over slow death.

The Agitator

[Ted Grigg]

Great to find you blogging again Jeff since you left Merkle.

As to you point out, nonprofits who stop acquisition are at least minimizing their growth by depending primarily on referrals and earned media.

But as one looks deeply into their infrastructure for raising funds, you will probably find that they rely far more on growth from sources they do not mention.

Organizations who make the statements you quoted are sometimes in a position to earn sizable grants from government or foundations. Or they have religious ties where the real acquisition comes from associated religious entities, associations or even social fraternity groups.

So defying acquisition activities such as direct response is like trying to ignore the laws of gravity. Somebody, somewhere is helping them acquire new donors well beyond what they claim to maintain growth.