For every 100 donors gained in 2012, 105 were lost.
For every $100 gained in 2012, $96 were lost.
These are the averages across organizations of all sizes, and they paint a fairly bleak picture of low to no growth in revenue and shrinkage in the total number of donors. But that picture varies dramatically based on the size of the organization.
Organizations raising $500,000 or more annually had an average 16.6 percent net GAIN.
Organizations raising $100,000 to $500,000 had an average net LOSS of -5.1 percent.
Organizations in the under $100,000 groups had an average net LOSS of -13.5 percent.
In short, organizations raising $500,000 or more are winning, and organizations raising less than $500,000 are losing. One reason for this difference seems fairly obvious — organizations with smaller budgets have fewer dollars to spend on attracting new donors and retaining their current ones.
The good news is, a smaller budget doesn’t necessarily mean you can’t be smart about increasing your fundraising effectiveness. Here are a few things you can do to maximize your fundraising dollars to reduce donor attrition, regardless of your organization’s size.
Donors want to know their money is going to support the cause they care about. The largest nonprofits typically have expensive websites, celebrity endorsements, visibility in the sponsorship of major events and millions of media impressions that reinforce their purpose and mission and how it’s being accomplished. All of these things help build credibility, which brings in new donors and keeps current donors coming back.
Small organizations can’t compete on a paid-media playing field, but they can ensure that everything they create — whether it’s a website or a direct mail piece — is on a professional level. The affordability of quality web design and digital production means a nonprofit that raises less than $100,000 annually really can present an image that competes credibly with much larger organizations. Many startup nonprofits have proved this in recent years.
More and more donors of all ages are giving online. And with all of the very public security breaches of personal data, including payment information stolen from retailers such as Target and Neiman Marcus in the last year, donors are more aware of phishing scams and more wary of redirects and strange domains that pop up in their browser bar.
Even if they trust the site they’re on, they might be hesitant to complete their donation if red flags are raised during the donation process. An estimated 50 to 70 percent of potential donors actually abandon the donation form after clicking Donate. So it’s becoming more and more important to not only keep them on the Donation page on your site, but also get them seamlessly through the donation process.
As the iDonate application shows, this isn’t a cost-prohibitive step. Once again, technology effectively levels the playing field for organizations of all sizes.
The 2013 Fundraising Effectiveness Survey Report shows that while attracting new donors is difficult for smaller organizations to do, keeping them is even more challenging. Organizations that raise under $100,000 annually have a 72 percent donor attrition rate. Organizations that raise more than $500,000 have attrition rates closer to 50 percent.
The most effective nonprofits know how to keep donors engaged. Whether that’s through consistent communication focused on the impact of donations or the creation of energy and excitement around the opportunities that still exist, you need to do more than just ask for money. You need to continue to show how value is being created through donors’ financial support.
These are just a few of the ways that smaller organizations can address the problem of donor attrition. Look for ways you can apply them. But remember, best practices and strategic tactics are best understood as an initial ante toward fundraising effectiveness. They function as an experienced guide that gets you moving in the right direction. Knowing your list is just as important. Your list – like your message – is unique, so the application of best practices to your fundraising efforts should be thoughtful and deliberate.
And check out the Fundraising Effectiveness Project, if you haven’t already. Understanding and applying the information in the Fundraising Effectiveness Survey Report can be helpful to the health of organizations large and small.
Ray's experience in launching, building and helping businesses succeed spans nearly 3 decades (though he doesn't look a day over 28 years). Around the office, Ray is well known (and dreaded) as someone who wants the product to be “just perfect” – it might be what he calls a good time. Ray’s experience includes various leadership positions in technology companies and as President of the Venture Capital group of Koch Industries, the nation’s largest private company, where he oversaw numerous technology investments.