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On the Importance of Retaining Donors, and of Using Thank You Cards To Do So

The following excerpts were taken from an ebook recently distributed by AFP.  The paper notes the following:

  • Outside of doing the work your nonprofit exists to do, retaining donors is the single most important thing your organization can do” to ensure it can fulfill its mission.
  • Starting before the recession of 2008, retention rates have declined to the point where, on average, nearly 75% of newly acquired donors leave by the end of the first year.
  • More generally, donor retention rates are down by 15%. 
  • Email response rates are abysmal

This is profound because acquiring a new donor costs much more than retaining one you already have (6-7 times more, on average).  "But more organizations are chasing less money while, in the midst of this chase, losing more and more donors."

They go on to say: “The root of the problem goes beyond the math. Your supporters want a personal, human, and meaningful connection with your cause.”  But,

“Sadly, as evidenced by the reams of data on donor retention, few organizations today understand or practice this essential survival skill….[or] are aware that the actions they take actually determine whether a donor becomes committed and loyal or abandons ship.”  The economics of fundraising are startlingly simple. Committed and loyal donors are the economic engines driving virtually all nonprofits.

However, committed and loyal donors are made, not born….Retention must become the holy grail of fundraising in this age of rapid change. Organizations that ‘get it’‘ and execute accordingly will prosper. Those that ignore retention or deny its importance will wither.”


What to do - Thank Your Donors

The only answer to the problem is to boost retention rates.  They give an example of how not to accomplish this:

Say “you send a letter that tugs on my heartstrings. I’m moved to tears and mail you a $50 donation. Ten long weeks later you send me a boilerplate thank you letter with freakishly dark mail merge fields capped off by your CEO’s laser-scan signature. After that, nothing until next year, when you send me a letter asking for more money. How conducive would you say this is to donor retention?”

According to StudyFundraising.info, proper retention techniques can “enhance the lifetime value of your donor base by 200%.”  Also:

  • Multiple studies indicate that donor satisfaction hinges on the quality of service provided by the fundraising team (see Blackbaud benchmarking report, Donor-Centered Fundraising, and Donor Retention and Loyalty). 
  • It’s the single biggest driver of loyalty toward your organization. 
  • The service donors care most about is a prompt, personal thank you. 

The top way the paper says you to improve donor acknowledgement is "via handwritten thank you letters, especially [these days] when so many people rely so heavily on impersonal digital communications.  So those who do will naturally stand out."  You can also include enclosures.   [Note from us…..Of course, writing them all by hand, if you have more than a few, is hard, which is why we created Thankster….].

The paper goes on to describe some good times to send thank you cards:

  • “Important events in your donor’s life: Make your calendar and your database your friends. If it’s your donor’s birthday or a special anniversary, send a greeting...Don’t just sign your name to a Hallmark card; consider creating cards that showcase your mission….
  • Important events in the donor’s relationship with your cause: If the donor has been giving consistently for 5, 10, 15, or 20 years, celebrate these milestones with a thank you card.
  • Important holidays: Of course you can send Christmas, Hanukkah, or Kwanza cards, but everyone does that….[also] a lesser-known holiday because it stands out and can be a special delight. Select a holiday that you can connect to your mission.

 For example, Shavuot is a Jewish harvest festival celebrating the giving of the first fruits. Since giving away a first fruit is a true gift, a Jewish organization might send a card thanking supporters for giving of themselves – the first fruits of their time, energy, and love – to its cause.”


More on the Power of Thanks

The last section of the paper is called “Write On! Why Handwritten Notes Matter”  The author uses an analogy to further make the case for thanking and for handwritten cards:

“There’s been a lot written comparing donor stewardship to dating. You build trust until they commit. While that may be true, I think it’s the wrong way to look at the relationship because it’s focused on what the experience is like for us, the nonprofit fundraisers. Wouldn’t it be far more useful to think about what the relationship is like from the donor’s point of view?

I would argue that being a donor is much more like parenting a kid. The kid is alive because the parents are taking care of him. The child grows and thrives only as a result of how much the parents give – of their time, resources, money, and help – and how much they care.

Unfortunately, most nonprofits seem to be about as grateful to their donors as my friend’s 20-year-old son, who’s in college. He only calls his mom when he needs money, rarely says thank you for the many, many things she does for him, acts like he got to college completely on his own (even though she’s paying for it), and if she is lucky enough to get a birthday wish from him, it’s in a text that reads “happy bday, ma!”

Lucky for him, he is her actual real-life kid, and so she loves him and continues to support him with the hope he will come to his senses one day. Nonprofits do not have this luxury. Our supporters may love us, but that love is decidedly conditional. And so we have to work at letting our donors know that we value and cherish them because if we don’t, we will lose them. In short, donor retention begins, and ends, with personalized gratitude.

This truth really hit home for me several years ago when I was invited into a donor’s home. It came as a surprise; I was doing my assigned meeting request phone calls for an annual campaign expecting to (at the very least) be told that I am an annoying solicitor who should lose this phone number or (at the very, very most) set up a lunch meeting at a local restaurant. Instead, this woman said, “Why don’t you visit me at my home next week?” After several moments of stunned silence (because when does that ever happen?), I somehow recovered enough to graciously accept. I then proceeded to stay up half the night wracking my brain, trying to figure out what I said or did that would have prompted her to invite a relative stranger into her home.

Once I visited her, though, it all became clear. She greeted me at the door with a hug and then invited me to the kitchen where she was busy preparing afternoon tea. And there, on her refrigerator – that hallowed centerpiece of the American family normally reserved for kids’ artwork and grandkids’ baby pictures – was a handwritten note – from me. I had fired it off among dozens more in a flurry of donor gratitude after a fundraising event the previous year. I did remember sending it, but I didn’t recall that it said anything spectacular, and I am sure it took no more than a few minutes of my time. But there it was, and there I sat, a guest in her home, a guest who she knew full well was there to ask her for a whole lot of money, which she was happy to give.

I am certain that, were it not for that note, I would not have been there, and that large gift would not have been given. I am just as certain that a thank you email with the same exact words as the card would not have gotten me in her door. There is something about the physical act of opening an envelope hand-addressed to you, pulling out a card with your name on it, and then reading the kind words within, that no email could ever hope to accomplish. It creates a visceral, tactile, and emotional experience that stays with us. With a card, you’re telling your donors that they are worth your time, effort, attention, and most importantly, your thought.

While this particular story ended happily, it sadly speaks to the fact that the nonprofit sector is setting the bar on gratitude abominably low. Is getting a handwritten thank you note from an organization really so rare, so special? Yes. Yes, it is, and that needs to change. And it’s so easy! All you have to do is stop and think about how nothing you do is possible without your donors, and go from there.

And as long as we are using the analogy of nonprofit-as-child, writing a thank you card is the perfect opportunity to tap into some positive childlike behaviors. Kids may not be the best at expressing gratitude, but they are experts at having fun. Be silly. Be funny. Say something unexpected! Donors are in the joy zone when they give. Don’t spoil their experience with an uninspired message of thanks. I behoove you – no, I beg you – to make your donors smile. And I have some tips to get you going.”

We could not have said it better ourselves.

 

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