Critical Devices: Stewardship, Stewardship, Stewardship

Between 55-65 percent of first-time donors never make a second gift, and only about 10 percent remain active after five years, according to reports from Penelope Burk, president of Cygnus Applied Research and a leading fundraising researcher. That’s some staggering information.

If you consider the monetary impact that decline has on an organization, it’s even more disheartening, as it costs 7-10 times more to acquire a new supporter than to retain existing donors. Moreover, the expense of the “acquisition” is typically 20 percent higher than the revenue actually received from those efforts.

Still think you don’t have the proper resources to fully steward existing donors? The reality is that you can’t afford not to.

While organizations must actively and regularly communicate with their current donors, they also must keep in mind that oft-mentioned 
saying about how 90 percent of communicating is listening. You should be “listening” to your existing donors to determine what it is that makes them support your work. If you haven’t conducted a donor survey or a focus group in the past few years, perhaps now is the time to schedule these helpful listening experiences.

Also, guard against the tendency to cluster donors by gift amount. Instead, be careful to know what they care about, what they think, and what motivates their generosity. It’s important to understand why donors chose to give to you, and then thank them for the impact their gifts make possible.

Perfecting the Thank You

Don’t let the only time donors hear from you be with your next solicitation. Burk says, “Driving home the same message of ‘give, give, give,’ without satisfying donors’ needs for information on the effectiveness of their giving, keeps donor attrition high and prevents charities from raising so much more money.”

And, a word of caution about how you thank your donors. An example offered during a workshop I attended at the Alliance and UNCA 2011 National Conference in October captures the error of so many acknowledgement letters:

Dear Uncle Jeff,

Thank you for the wonderful birthday pony. It’s just what I wanted! I’ll have fun riding it. But don’t forget, I need a saddle to ride it correctly. And my pony has to eat, so if you can send some food, that’d be great. For your convenience, I’ve arranged for you to pay for this online.

Thanks again for the pony! You’re the best!

Jessica

Donors need to hear about the specific impact of their involvement and gift; our being “needy” does not motivate them, just as Jessica’s note probably annoyed Uncle Jeff.

Assessing Current Donors

A concrete suggestion to enhance donor retention is to perform a thorough review of your current donor base, and then develop an explicit and actionable plan. Examine data with an eye toward patterns. Analyze those patterns and think carefully about what they suggest.

A gold mine will be found in the analysis of your LYBUNTs (Last Year But Unfortunately Not This) and SYBUNTs (Some Year But Unfortunately Not This). You may discover many donors meant to give, but simply forgot. That probably says more about the organization’s lack of stewardship strategies than the donor.

Another strategy involves assessing existing relationships between donors and potential donors. Research demonstrates that when we engage a new donor it is most likely due to relationships with current supporters. Most donors rely on peers and social contacts much more than rating entities, such as GuideStar, when deciding what new charities they will support.

Thus, engaging your current donors—regardless of their current giving capacity—in spreading the word about your agency is a rich opportunity. Engage them in ambassadorial efforts, such as holding friend-raiser events, which gives them an equity stake in the agency and its success.

Friend-raisers hosted by current board members and donors are a road to new relationships and effective stewardship. These events emphasize the power of networks of relationships, as well as promote the agency’s message and positive outcomes for the community. They are not focused on immediate gift acquisition and rarely result in short-term economic gain. However in the long term, they provide significant returns 
on investment.

Rethinking Investments and Cost-Cuts

One of the most devastating mistakes an agency can make in tough times is to pull back from investments in communications and development. Stewardship of current relationships is the core ingredient to survival, and ultimately to economic recovery. 
Cutting the organization’s capacity to support donor relationships, support community relationships, and drive 
home a clear message to the community is a reactive, yet frequent impulse—and 
a tragic mistake.

The board and management always must balance mission commitments with current revenues. But, the board also needs to understand its responsibility to ensure that the agency maintains its capacity to deliver on its mission now and in years ahead.

Furthermore, a wise investment of energy and resources is to enhance the engagement of your board members as donors and ambassadors. Remind them that philanthropy primarily is about relationships, and encourage them to have conversations with others about the agency and its important outcomes. Finally, provide them with the communication tools, including a simple message, that empower them to 
be effective ambassadors for the agency and its mission.

When the economy does finally improve, you want your donor and volunteer connections to be strong and meaningful. That only is possible if you invest careful attention to stewardship.

Good stewardship of relationships, as well as the wisdom needed to maintain investments in communications and development, will be the cornerstone for ensuring the long-term philanthropic health of our agencies. As the serenity prayer advises: accept the things we cannot change, change the things we can, and know the difference. We actually do know a good deal about what will make the difference in these difficult economic times; in a word, it’s stewardship. 

Critical Devices: Stewardship, Stewardship, Stewardship