News, comments, resources, and more for nonprofits.
The Association of Fundraising Professionals (AFP) and the Center on Nonprofits and Philanthropy sponsor the Fundraising Effectiveness Project (FEP), which provides nonprofits with tools for tracking and evaluating their annual growth or decline in giving. The FEP focuses on “effectiveness” (maximizing growth in giving) rather than “efficiency” (minimizing costs). It conducts an annual survey and publishes gain (loss) statistics in a yearly report.
The 2010 Report(pdf) is enlightening. The Project looks at “donor lifetime value: the total net contribution that a donor generates during his/her lifetime on a [nonprofit’s].” It also looks at donor defection rates, or the rate of declining donations following a first gift. For cash gifts, it’s 50% in the first year and 30% each year after that! In addition, 30% of ‘regular or sustainer givers’ are lost from year to year.
With these ongoing trends, and the time and money needed to attract new donors--over and over again--learning how to attract and keep donors with the greatest potential lifetime value is critical for nonprofit sustainability.
During a recent AFP webinar, several ‘drivers of lifetime value’ were discussed, starting with reasons donors defect. Simply: lack of customer satisfaction with their donating experience, led by the lack of responsiveness by the nonprofit staff. Donors who were surveyed said they were ignored, lied to, meetings were delayed, staff were ‘uncivil,’ and the nonprofit/staff ‘failed to deliver on promises.’
On the other hand, a high level of donor satisfaction with the customer service they receive from a charity’s staff drives donation levels and repeat gifts. The higher the satisfaction, the more likely the donor is to give again and again.
- To know what makes the nonprofit qualified and competent to utilize their money to best advantage
- To know what is done with their money; who is served and to what outcomes
- To build a relationship with the organization beyond giving money
- To express their own identify through their gifts
Regular, sustained giving is based on trust, commitment, satisfaction, and identification. Basing your donor-relations activities on excellent customer service, getting to know what is important to your donors, and learning how they want to engage with your organization will reduce defections and build greater lifetime value for your organization.
A win-win for all!!
Effective Fundraising for Nonprofits
WealthEngine, the Association of Fundraising Professionals, and APRA (a fundraising research organization) presented a webinar recently called ‘Fundraising Intelligence.’ They discussed the legal and ethical practices we, as nonprofits, must comply with and honor as we work with donors’ personal information. Each organization has privacy standards, ethical standards, and a Donor Bill of Rights.
With all of the public information about donors and potential donors, what makes their profile at your organization confidential is that it IS a ‘profile’...a custom, formatted profile IS highly confidential.
The rise of the internet has made it more important than ever to verify information and have policies and procedures covering who, why, when, and what is shared internally (staff and board) and with volunteer fundraisers. Here are ‘best practices’ cited in the webinar:
- Recognize everyone in fund development is responsible for collecting and securing donor/prospect information;
- Set parameters for collecting and using data and information
- Make sure sources are reliable; confirm data/information from multiple sources
- Set policies that define what information is confidential or ‘privileged’ in donor/prospect profiles; review policies often, especially as any new person is permitted access
- Define who has access to donor/prospect profiles; have everyone with access sign a confidentiality statement; do not disclose confidential information to unauthorized parties
- Be sure donor/prospect profiles and confidential information are under lock and key; electronic files are password protected; and, old/unused documents are shredded
- Be sure privileged information isn’t shared in casual conversations or where unauthorized individuals can overhear it
- Don’t transmit any documents as Word files (use PDFs), or by fax or email
- Recognize all donor/prospect information is the property of the organization creating the profile and not to be shared with any other outside person or organization
- Include information in profiles that the donor/prospect will enhance your relationship; donors/prospects have the right to access to their file upon request so don’t include information they wouldn’t want to see there
It’s all about relationships with our donors and prospects. “Respect the privacy of prospects/donors: use information gathered through cultivation in a way that only enhances the relationship with the prospect/donor and your organization.”