Strengthening Your Relationship with First-time Donors and Loyalty Donors

Debbie Meyers
Assistant Vice President for Advancement Operations
Chautauqua Institution

Here’s a pretty startling statistic: 77 percent of first-time donors don’t give to their organization the following year. (Source: DonorPerfect)

For donors who do make a gift after their first time, the average retention rate among non-profits is about 45 percent. That doesn’t sound too bad until you do the math and realize that keeping 45 percent of your donors means you’re losing 55 percent.

What happened? Where did they go? Why did they leave?

Maybe they didn’t feel thanked, valued, recognized or welcomed. Perhaps they didn’t think their gift made a difference. Or it’s possible they may not have felt a strong connection to your mission.

Historically in our profession, our tried-and-true go-to programs for large donor groups have been

• to thank: form letters on official letterhead
• to report: annual reports and financial communications
• to recognize: circles and societies.

I’m going to challenge you to look beyond those constructs toward your ultimate goal: engagement.

The word itself – engagement – can easily be thrown into the same bucket of words used so frequently and broadly that we really don’t even know what they mean any more: words like pivot, initiative, cutting-edge, sustainability, unprecedented. The official definition:

1. first is “to occupy, attract, or involve someone’s interest or attention” – meaning, we want to engage donors by involving them
2. with a secondary definition of “to participate or become involved in” – meaning we want donors to engage with us. This is our goal.

The crucial word in both is involve. We want them to be active. One article referred to engagement as mobilizing your donors to accomplish your mission.

Consider the foundations of stewardship and donor relations,* noting that engagement is the ultimate step in that cycle:

*This model is my theory, my view of how stewardship and donor relations work together to form the foundation of our profession.

Except for engagement, all these actions tend to be terminal, meaning you do something to or for the donor, and that’s where it stops. You send them an acknowledgment, they read it and the interaction is done. You recognize them, they read the publication/wall/website, done. We put them in a circle or society, and there they stay.

Engagement, on the other hand, is an open-ended opportunity for back-and-forth interaction between you and donors. They take a survey and identify themselves as interested in volunteering. You call them and recruit them for a volunteer activity. They have a great time and volunteer again. Maybe they even recruit more volunteers who ultimately become donors.

Involved donors are personally invested in your organization’s success. Their involvement and investment lead to larger gifts. 

To best engage donors, try to identify what motivates them to give in the first place. While those motivations can be as varied as the donors themselves, some common attributes are

• affinity – they are proud to be associated with you
• loyalty – they feel a sense of pride and obligation
• gratitude – they are grateful for what you’ve done, for them and for others
• honor and privilege – they count themselves fortunate to be in a position to give
• nostalgia – they lovingly recall an experience or time in their lives that warms their hearts

Model your first-time donor and loyal donor programs on these values and any others that are unique to your institution and its mission. Forge your relationship with your donors by appealing to these giving motivations and engagement will be a logical next step.

Now let’s think about how all these variables and theories come into play in the real world as you create these programs.

FIRST-TIME DONOR PROGRAM

No pressure, but remember that you have only one time to make a good first impression!

In setting up your FTD program, focus on acknowledgment, reporting and recognition as ways to lead toward engagement.  For FTD acknowledgments, your first-time donor’s first contact from your institution, you’ll need to answer some key questions:

1. What form will it take?

A commonly used term is a welcome packet, but a welcome doesn’t have to be a printed, mailed packet. It can be a call, an email or a video. If you do choose a printed piece, including a sticker or small token can serve as a reminder of your organization and be a source of pride for your donors. Handwritten notes are a particularly nice touch.

2. Who’s it from?

Acknowledgments are most effective when they come from whoever benefits from the gift most directly. Thus, a welcome could conceivably come from a student, an artist, a doctor or anyone in your organization who represents how that first-time gift is going to make a difference. The least meaningful person to send a welcome is an advancement professional – a VP or annual giving person, for example. You’re better off sending it from your organization as an entity.

3. What will it say?

Take your cue from the name: WELCOME. Offer a warm, sincere welcome to your fold. Don’t ask them to take a survey in your first correspondence to them. And for the love of all that’s holy, do not ask for another gift! Remember the advice from Ghostbusters: don’t cross the streams (of communication).

Briefly share your mission to validate their decision to support you and to make them feel good about it. Praise and thank your first-time donors: avoid using “I” and “we” and focus on “you.” Talk about how awesome they are and how their gift will make a difference.

And most importantly, let them know that you noticed this is their first gift, and that it’s a big deal. They are now part of your family of supporters and that makes them special.

4. Which gifts count?

You may choose to exclude memorials gifts, and possibly honorary gifts. What about corporations, foundations and DAFs? It may not be appropriate to include certain gifts to athletics, or other membership or sponsorship gifts. If your organization enables small add-on contributions to ticket sales or other purchases, you’ll need to decide if those gifts count.

To establish metrics for your department’s effectiveness in an overall fundraising enterprise, you may want to experiment to track the welcome message’s effectiveness. For instance, create a welcome program for a randomly selected group of donors. Track their retention rate vs. those who did not receive a welcome message. Or welcome all first-time donors and track your overall retention rate year over year.

Before you solicit these donors again, you are obligated to report to them on the impact of their gift. Even small unrestricted gifts to your annual fund can make a significant difference. Be sure to include stories and concrete examples that underscore your mission, and use a mix of media over time.

Recognition for these donors in a digital age opens many new opportunities beyond printed honor rolls with an asterisk by their names. Social media can be an effective way to highlight and celebrate these donors. You can host a virtual recognition event or party, including them with other types of donors to show how all kinds of giving are important. And of course, who can resist a window cling?!

This article by Sarah Sims has some great examples of first-time donor pieces.

Engagement can also take many forms. Give your first-time donors lots of ways to become involved. Include a call to action in all your communications: ask them to like, share, retweet your social media posts. Invite them to interactive events. Provide them with a list of volunteer and networking opportunities. Ask them to fill out surveys and then follow up with the results. Or even better, ask them to solicit on your behalf. Being an ambassador is the ultimate form of engagement.

LOYALTY DONORS

A strong engagement program will start by welcoming new donors to your community of philanthropy, then recognizing their loyalty when they give the next year. Ideally, their loyalty should lead them to give larger gifts over time, as exhibited by these four L’s of donor giving behavior:

Just as it’s important to note that a first-time gift is a big deal, it’s also important to notice and celebrate how many years someone has given. Categorizing donors in this way helps you identify the behavior you want donors to continue. Specifically, if you want to encourage consecutive giving, increasing your retention and participation rates, you need to engage loyal donors who give year after year.

DO YOU REALLY NEED A CIRCLE?

Remember that not everything needs to be a circle, or a society. (I use the terms interchangeably.)

You can recognize loyalty by adding elements programmatically. For instance, you can follow the model of credit card companies that write “member since 20XX” on their card by adding on a line on your receipt that says, “Thank you for your 15 years of loyal giving.” Or you could mail window clings or other inexpensive premiums, particularly for landmark years.

Simply by pulling a list of donors and how many years they’ve given consecutively, you can provide fundraising staff with structure and focus – i.e., these are the donors you need to be paying attention to.

Specifically, long-time givers are excellent planned giving prospects. And someone who has been giving $1,000 for five years is probably ready to be asked to increase their giving to the leadership annual giving level. Communicate regularly with your fundraising staff about who has reached a milestone year, or who is about to miss a year, so gift officers can leverage that opportunity to contact their donors.

Things to consider are how many donors you would include, how much staff you have to manage the program/circle and how much budget you’ll need. Also, what is your retention rate? Build your efforts to scale: the lower your retention rate, the bigger and better your programming needs to be.

Some institutions use circles effectively. If you do choose to have one, remember that the end goal is engagement. A circle is more than just a name. It’s not enough to tell someone “you’re in the ABC Circle” and then have that be the end of it. By its very nature, a circle needs to have a brand, programming and ongoing communications. It does no good to have a circle in name only. You’re better off just recognizing programmatically.

If you do go the circle route, focus on experiential rather than material. Donors don’t want you to send them things they can buy for themselves. Offer them insider info, private tours, meetings with your organization’s celebrities and leadership.

THE SCIENCE OF CONSECUTIVE GIVING

We’re about to get waist-high in the weeds here, explaining how to determine a donor’s number of years of giving.

Your first step is to establish donors’ baseline years of giving. At some point, you need to let them know that “according to our records, you have given X number of years.” Be sure to include a disclaimer that you made every effort to be accurate, and if anyone has a question or concern, call or email [email protected].

In determining the number of years a donor has given, decide if you are going to measure consecutively or cumulatively.

Consecutively is easy – someone has made a gift every year, each year for ten years. Where it gets tricky is that lots of organizations count giving in fiscal years, which are often July 1 to June 30. Donors consider their giving by calendar year only, as a rule, because of tax implications.

Thus, you may wish to analyze your data by fiscal year AND by calendar year to err on the side of inclusion in recognition. Count soft credit and associated credit. Recognition costs nothing—be generous!

Cumulative giving is somewhat easier to calculate and more forgiving for donors who miss a year here and there. Say someone has given 15 times in the past 20 years. You could honestly and accurately say they’ve given for 20 years, using the date of their first gift as the baseline.

I’ve done it both ways.

At one institution, we were hard nosed about gifts needing to be consecutive. So even if you have been giving since 1989 and you missed 1999, your tally would start over at 2000. It was not donor centric, caused some hard feelings and ultimately steered us to make exceptions, which meant hard coding individual records by hand.

At another institution, we went for cumulative years giving. But that was not without its headaches too. For one, the central university database went back to 1983. But the Athletics database, which tracked years of giving to assign tickets and other benefits, went back many years before that and counted years of giving in a whole separate universe. Children could inherit their parents’ giving tenure, and you’d end up having donors who had given for more years than they’d been alive. (It was messy.)

This screenshot of an Excel file showed the data analysis I performed to determine reasonable tallies for our donors. We took into account how many years they gave, over what range of years, what percentage of years of giving that represented. The last column is a visual depiction of years of giving (x) and years not giving (=). Call me if you’d like me to explain the process but I’ll just say that ultimately I reviewed over 18,000 donor records to assign years of giving. I still have an eye twitch.

Another consideration is buy-back years where you offer SYBUNTS (donors who have given "some year but unfortunately not this" year) the opportunity to make a gift to buy back a year in which they didn’t make a gift. Say someone had consistent giving but missed 2020. You’d solicit them for a buy-back gift for 2020 as well as a gift for 2021, to keep their record consistent. Some institutions offer this option and the practice works well for them, but it can send a message that giving is transactional. Plus it’s a lot of manual record updating.

CONCLUSION

FTD and consecutive giving programs are a great opportunity for donor relations staff to help with fundraising goals and retention rates. They offer you a valuable metric to use in annual evaluations and in lobbying for increased budgets and staffing. But above all, they are an excellent way to help build stronger, better relationships with your donors.

In creating these programs, remember to start with the “why” before jumping into the “how.” Videos, emails, circles, postcards, social media posts – those are all means to an end, steps in a process, parts of a whole. The goal is engagement.

Debbie Meyers has been through several generations of recognition circle theories and practice. She owes her current inspiration to Paige Eubanks-Barrow who encouraged her to move beyond the traditional and embrace engagement as the path to successful donor relations programming.