The homepage of Lynne Wester’s website cites an alarming statistic: “…the current first-time donor retention rate is 22%.” That statement should strike fear in the hearts of fundraisers everywhere. She goes on to point out that the cost of recruiting a new donor is seven times more than the cost to retain one.
Lynne Wester: “Fundraisers are faced with a major problem regarding the sustainability of their programs and it has nothing to do with charitable tax deductions, the transfer of wealth, or with the new generation of donors, aka Millennials. It has everything to do with donor retention. Average donor retention rates for first time donors hover at a dismal twenty-two percent rate. Yet fundraisers don’t spend a great deal of time and energy on the problem and its solution. Instead, acquisition budgets rise with great abandon to hunt for new donors and offset awful attrition rates.
She continues, “Acquisition costs seven times as much as retention. It’s far more cost effective to keep your donors than chase new ones. Donor relations provides the answer to the donor retention problem. A well-executed, strategic forward thinking program will curtail this hemorrhaging donors and accomplish even more.”
The WG: What then is necessary to reverse this?
Wester: “The amount of time donor relations professionals spend in reactive task-based work rather than strategic proactive work can be frustrating. As we emerge from a servant mindset to a service mindset we need to source professionals that are strategic calculated risk takers and not just folks who can execute on a process. This is being addressed through thought leadership and educating those in our field that they are more than just an end product, they have an important seat at the strategic leadership table.
“Another challenge facing us is the fact that many practitioners by demand spend a great deal of their time focused on the top donors to the organization. This is a logical progression of the fact that 95% of our funding comes from 5% of our donor base. However, if we ever want to see a paradigm shift in this, we have to spend 50% of our time at the top and 50% of our time with the next generation of generous souls. We are working to fix this by having donor relations professionals partner with annual giving and others to ensure that each and every donor, regardless of the amount of their gift, receives a wonderful donor experience.
“As the demand for philanthropic dollars continues to increase and we see a growing trend in the designation of those gifts, we need to actively identify our donors’ affinities and interests and show ways in which they can support those initiatives and how that support will positively impact the school. The key here is doing your research–getting to know your prospects and what areas of the school they may be inclined to support.
“The goal of any great fundraising operation is to use strategic communications and interaction to foster the relationship between the organization and its constituents and friends. If we are effective with that strategy, donors will be engaged in a way that drives them ever closer to embracing the organization’s mission and values. And they will give their money, time, and talent, and volunteer to spread that same message with others.
In Wester’s opinion it is important to, “Look at the donor experience as holistic in nature and not a segmented group of tasks to accomplish. This strategic view of our work drives us forward and can dramatically affect the fundraising process.”
According to Wester, some of the ways in which the issue of retaining donors is being addressed include:
- The increasing role of bespoke and custom engagement plans for the organization’s top donors;
- The increasing presence of donor relations in the gift agreement, acceptance and compliance part of the fundraising cycle;
- Ensuring that funds are spent according to donor intent and stewarded in a timely manner;
- Focusing on the donor experience, not just the tasks-at-hand of donor relations;
- Do better at demonstrating impact to all donors.
Wester offers these concluding recommendations:
- Don’t be afraid to take calculated risks and not accept the status quo. “We’ve always done it that way” is NOT an appropriate answer. Find out the WHY and proceed from there. Shake the snow globe and have gumption. Do one thing really well and then build upon that. You can’t do everything all at once. One step at a time.
- Benchmark against for profit companies that have great customer service, not just the charity or university down the street. Get out of your comfort zone and stretch your worldview beyond your peers.
- Ask your donors what they expect and desire. We don’t ask our donors what they want enough. Donors will tell you! Listen to them and build your program based off of their behaviors and your data, then go from there.
Lynne Wester believes that donor relations is the key to unlocking fundraising success and that organizations must be as dedicated to the donor experience as they are to the ask itself. Sometimes referred to as the Olivia Pope of fundraising, Lynne helps organizations when they need it the most. Lynne and her teammates at the Donor Relations Guru Group partner with nonprofits on a variety of initiatives – from developing sound strategy and vision to utilizing technology and creating meaningful donor engagement – all designed to positively affect the fundraising bottom line. Lynne is regularly featured in publications such as the Washington Post, Chronicle of Philanthropy, and CASE Currents and has authored three books of her own on various industry topics. Lynne received her B.A. from the University of South Carolina, holds a Masters in Strategic Fundraising and Philanthropy from BayPath University, and proudly sports a DUCKtorate from the Disney Institute.