Reflections on the FEP Donor Retention Workshop

Please note: AFP will be presenting a one-day, pre-conference workshop "Donor Retention: A Self-Assessment Workshop" on Saturday, March 30, 2019, during AFP ICON 2019 in San Antonio, featuring speakers Erik Daubert, MBA, ACFRE; Lori Hunter Overmyer, MBA, CFRE. Learn more and register now.

Over a year ago, my friend and colleague, Michael Buckley of The Killoe Group, asked if I wanted to teach the Association of Fundraising Professionals’ official course on donor retention, powered by data from the Fundraising Effectiveness Project. Since my company is a data partner of FEP, I jumped at the chance.

It takes a few months to officially approve and schedule the course itself, but in late January 2019, Michael and I set up in a conference room at the Marriott in Saratoga Spring, N.Y., and readied ourselves for seven hours of data-driven discussion. While he and I had spoken about the key performance indicators of FEP’s data before, we had never done an intensive, day-long workshop around it. We were both excited and nervous to see how long we could keep the attention of our participants.

I thought it would be useful to break down the ways that the course itself is structured and the practical realities of putting this vital data set and metrics in front of actual fundraisers. Here’s what I learned from doing this course.

Overview

AFP has put together a stellar set of resources for workshop organizers when it comes to getting the course together. A thick and well-organized faculty folder was provided, as well as access to a recording on how to properly teach the course. Slides were also provided to help guide both faculty and students through the material.

The Donor Retention Workshop has three primary learning objects, which we debuted upfront:

• Identify effective practices to retain and upgrade donors to improve fundraising effectiveness;
• Prepare a donor retention plan for the participant’s organization and
• Use data from growth-in-giving reports to develop growth-oriented fundraising strategies.

With these three primary objectives serving as our anchor, we started to unpack the realities of working with donations data and how to leverage the free tools that FEP has created and put them into practice.

Section One: Why Organizations Lose Donors and Money

As we kicked things off in earnest, I was nervous that putting tons of charts in front of participants would scare away the less data-savvy folks in the room. Yet, what was great about the course is that it starts off with a lot of solid foundational information on why it’s important to pay attention to retention.

Michael and I stressed that retention is an important metric to pay attention to when addressing donor attrition (when donors stop giving to your organization). It is also one of the best ways to stop revenue loss at a nonprofit, as well as the easiest path to growth of the organization.

Simply looking at overall revenue profit and loss on a yearly basis is a recipe for disaster down the line, since a few large gifts may mask an underlying issue of support of your organization from your donor base. We reminded the room that their donors are not THEIR donors (they have to work to keep them) and unpacked excellent research by Adrian Sargeant on lapsed donor behavior.

Section Two: How Keeping Donors Increases Fundraising Success

This is when the rubber really started to hit the road—where we dove into the harsh reality of donor retention impact on long term growth. Sargeant’s research demonstrated that increasing the level of retention by 10% would improve the net growth in giving for a typical charity database by 50%. We stressed that retention was both a short-term and long-term strategy that would never fail.

The top reason that donors stop giving to a nonprofit is that they feel that the organization no longer cares about them, which is why we stressed the importance of prompt and gratitude focused thank-you communication. The ability to thank a donor in an authentic way is well demonstrated as the most effective way to keep that donor, and we didn’t let our participants forget that.

Section Three: Measuring the Effectiveness of Your Fundraising Efforts

This is where the FEP data really started to come out and play. While I’m personally used to getting up-to-date findings from the FEP research team, it was really exciting to see how these have been folded right into the faculty curriculum to ensure that anyone teaching this course would be able to speak about the most up-to-date data possible.

Key findings from 2018 that we related were:

• Larger nonprofits perform much better than small ones;
• New gifts / donors generate the largest growth in gift dollars / donors; and
• Lapsed new gifts / donors represent the greatest losses in gift dollars / donors, particularly for the lowest-performing organizations.

One of the most effective tools that we provided were the Kirkwood Case Studies, which were targeted discussion items around a fictional children’s education nonprofit that allowed nonprofits to identify with the issues raised in a way that they could relate with, yet not feel defensive about comparing themselves to a “more successful” organization. Kirkwood was designed to be the perfect strawman, creating insightful discussion that generated some of the most exciting discoveries I’ve experienced.

Section Four: Developing a Successful Donor Retention Plan

After an excellent lunch, we got down to the business of unpacking the case studies and seeing what we could actually do with them. One area that was not included in the faculty guide, but helped us greatly, was the concept of developing Donor Personas.
A Donor Persona is a way of articulating messaging and strategy around a particular subset of donors. For simplicity, we had our groups work on three primary donor personas around which we then crafted a strategy matrix:

• New Donors: One of the worst retention rates belongs to new donors to an organization, with the average organization losing 25% or so of its first-time donors. The group came up with a great matrix to unpack strategy, tactics, and metrics around new donor engagement.
• Lapsed Donors: This is where retention really starts to come into play, since it costs $1.25 to acquire a new donor, yet it can be significantly less costly to bring a recently lapsed donor back into the fold. The group came up with several strategies around how to bring a lapsed donor back into the fold that focused on providing a personalized touch.
• Recaptured Donors: The unicorn of the retention world, and the one that can cause the most stress and aggravation, are donors who have lost interest for several years in a row. The group had some excellent strategies and tactics to address these types of donors, with a particular focus on individual and personalized outreach.

We encouraged all groups to think about how they would track this information in an effective way. What types of metrics mattered, and what were simply vanity metrics with no bearing on outcomes? And in one of the most important growth points in the FEP data, we also encouraged the participants to think about retention in an omni-channel way.

The reality is that the most effective donor engagement strategies are ones that empower donors to give through a wide variety of mediums, yet with only so many hours and resources at our disposal, we encouraged the group to be effective and efficient in how they would implement any of the strategies they devised.

Section Five: Review and Apply What You’ve Learned

As we geared up for the end of the workshop, we wanted to ensure that each and every single participant would be able to walk out of the workshop with something actionable specific to their nonprofit. We encouraged each of them to come up with a goal around retention that they could work on, asking them to be SMART about their planning.

The results were fantastic. A few highlights:

• One participant had run her actual data through the free tools provided by FEP and brought her printout of the results. We were able to sit down and develop a plan that focused on her top-level donors with a realistic stewardship plan that involved personalized outreach through phone and direct mail.
• A participant who came up from New York City (!) stated that his organization focuses heavily on email campaigns that were crisis-based in their messaging. As he worked through the data in the case study, he began to realize that adding another messaging layer around educationally-based outcomes would be an excellent way to create a long-term relationship.
• We discussed how creating a culture of philanthropy is a two-way street, where many times our organizations may be the first exposure an individual has with giving, and how our ability to steward new donors right away could mean the beginning of a long-term relationship.
• We also discussed the importance of using data to demonstrate our own value as fundraising professionals to our stakeholders, especially as it relates to the salaries we draw. Being able to use data strategically will have an immediate effect on morale and burnout in our industry.

The workshop was one of the best educational experiences that I’ve been a part of, and I hope that others invest the time and very reasonable resources into implementing this course in their own communities.

AFP will be presenting a one-day, pre-conference workshop "Donor Retention: A Self-Assessment Workshop" on Saturday, March 30, 2019, during AFP ICON 2019 in San Antonio, featuring speakers Erik Daubert, MBA, ACFRE; Lori Hunter Overmyer, MBA, CFRE. Learn more and register now.