Why do donors lapse?
In the 2001 study, “Managing Donor Defection”, Dr. Adrian Sargeant surveyed lapsed donors of 10 national nonprofits to ask them one simple question: “Why did you stop giving?”
Aside from death and financial difficulties, the study found the following reasons for why donors stop supporting nonprofit organizations:
- 5% thought the charity did not need them
- 8% received no information about how their contributions were spent
- 9% had no memory of supporting the organization
- 13% were never thanked for donating
- 18% noted poor service or communication
- 36% felt that other organizations were more deserving
The data shows that a large part of donor lapse is preventable. A significant portion of the reasons mentioned are indicators of a weak or inconsistent relationship with donors. Ultimately, being proactive in the development of donor retention campaigns can prevent the challenges that come with donor lapse in the first place. With the right communication and donor retention strategies, your organization can make the most of your fundraising efforts.
Why do donors stay loyal?
Donor demographics are changing, and, with that, there is a need for ever-evolving donor stewardship. DonorVoice, in their 2011 study on donor loyalty, explored Relationship Theory with regards to donor stewardship. Relationship Theory refers to the frameworks that help create meaningful connections in business and society. It is commonly used for business-to-consumer (B2C) or direct-to-consumer (D2C) marketing in for-profit industries, but gives imperative insight into other relationships based on monetary transactions. The DonorVoice study aimed to understand if the same theory can be applied in the nonprofit context to conduct a deeper analysis of trends in donor stewardship.
In their study, they highlight how the best donor relationships require, first and foremost, a functional connection to the organization. The relationship is often expressed as being reliable. The donor knows what to expect from your organization and their experience is consistent. Fail to do this and you fail, period.
In another study, most donors cited the following reasons for staying loyal:
- They are passionate about the mission or cause
- They feel that the organization depends on them
- They know someone personally affected by the cause
- They became more aware about the cause through ads
The above reasons all relate to how your organization interacts and communicates with its donors. Nonprofits spend a lot of time and money on marketing, fundraising, and operations without knowing what truly has an impact on the way their donors feel about their organization. Do you know which strategies have truly impacted your donors’ level of commitment to the organization?
To learn more about your own donors, allowing you to make better informed decisions in your development strategies, consider a data-oriented tool for the most accurate and comprehensive donor analysis. Donor Compass is a solution to identify lapsed and lapsing donors. The tool allows you to sort by recency of gift, so you can quickly identify who has lapsed or is at the risk of lapsing. By using the metrics that truly matter, Donor Compass enables you and your organization to filter, sort, and segment your donor audiences with the click of a button.
How to Re-Engage Your Lapsed Donors
Donors can be classified in two ways: as “low commitment”, those who give only once or sporadically, and “high commitment”, those who contribute significantly and regularly. A high impact strategy to increase your donor retention rate is to convert low commitment donors into high commitment donors. Rather than focusing on creating new donor relationships, targeting those that are familiar with your organization and its work can yield more substantial long-term results. Low commitment donors are already showing interest in your organization through irregular contributions. Consider the following in your upcoming campaigns to convert irregular donors into regular, long-term, and highly engaged patrons.
1. Impact-Focused Storytelling
Donors tend to give more when they perceive that your organization is effective in achieving its mission. Organizations that show the ground-level impact of their work create a connection between their donors and the beneficiaries. Numbers and metrics of success provide evidence of your organization’s work. However, real life anecdotes from your volunteers, testimonies from your beneficiaries, and compelling visuals of who your nonprofit supports makes donors feel like part of the process. Storytelling provides a more rewarding and impactful experience. When done effectively, it frames your donors and your beneficiaries as partners working towards a greater mission.
2. High-Touch Communication
Timely acknowledgments for contributions are essential to stay in touch with your donors. At the same time, confirmation of receipt and thank you emails are just the basics of donor communication. Staying in touch consistently and creating meaningful connections with your donors fosters a feeling that their involvement is appreciated and important. By ensuring that top donors are assigned a relationship manager, your donors will have a single point of contact that they can reach out to with questions, while also receiving regular check-ins. Relationship managers can help create personalized, regular goals for donors, along with choices and packages to achieve those contribution goals. This works well for high-net-worth, or HNWI, donors, as it offers services for philanthropy in a way similar to that of a financial advisor. Donors who prefer one-on-one attention will appreciate recommendations based on what causes they want to support along with the tax incentives that apply best to them. For certain groups of donors, gamifying regular giving through badges and leaderboards offers exciting incentives to stay connected to your organization. An annual or bi-annual give-a-thon can inspire the dopamine rush that excites your donors into a higher commitment.
3. Mutual learnings
When donors are involved in the work of the organization, they are more personally tied to its mission. Give your donors regular and substantial ways to give feedback on your development campaigns. Short surveys included in your confirmation emails or thank you letters let your donors know that their opinion matters, while offering your organization better direction for the next campaign. You may also have donors with expertise in a relevant field who are looking for ways to share their knowledge. Consider a donor-hosted webinar or panel discussion to engage your lower commitment donors and keep your higher commitment donors feeling like part of the purpose.
Ultimately, the best way to re-engage lapsed donors is to get to know them a little deeper. With data-driven insights on their giving patterns, your organization can be more intentional in your donor retention campaigns, targeting more of the right donors to become life-long partners.