Raise more money by keeping your donors: The why and how of donor retention through a storytelling lens

May 3, 2014

Presented by:Diane G. Remin, President

MajorDonors.com

1© 2014 RemRol Computer Services, Inc. dba MajorDonors.com. All rights reserved.

Second Gift Ratio is a trademark of RemRol Computer Services, Inc. dba MajorDonors.com

Areas we’ll cover today:1. Why people give2. What makes a story effective3. The case for donor retention

a. Why the big deal about first-time donors?b. What are your numbers?c. Thanking first-time donors w Exercise

4. Thank all donors five times 5. Enough with the “IRS” letter: Use stories to turn thank you

communications into genuine stewardship vehicles w Exercise6. Take advantage of the Internet when you say “thank you” online

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Why people give We give based on emotion. Feelings, not analytical

thinking, drive giving. The facts and figures are necessary—but to support the emotional connection.

It has been empirically shown that people’s beliefs can be swayed more effectively through storytelling than through logical arguments.

Persuasion is most effective when people are "transported" to another place using a story.

The role of transportation in the persuasiveness of public narratives.By Green, Melanie C.; Brock, Timothy C.Journal of Personality and Social Psychology, Vol 79(5), Nov 2000, 701-721.

The extent of emotion Save the Children experiment:

No surprise: Donors who were given statistics about a famine in Ethiopia gave 25% more when they were also provided a photo of Rokia, a 7-year-old who faces a threat of severe hunger.

Surprise: Donors gave 66% more when they received the photo and story line without the famine data.

ChildFund International experiment: No surprise: Donors gave more when they were told the

fund had an excellent rather than a poor efficiency ratio. Surprise: Highest response came from donors who were

given no efficiency information at all!

Statistics reduce empathy and interest in giving.People give less when they are thinking analytically.

Oppenheimer, Daniel M. and Olivola, Christopher Y, Eds., The Science of Giving: Experimental Approaches to the Study of Charity, Psychology Press, 2011. 4

Before and After Before

Please consider supporting the 124 children (aged 4-17) in our hospital. A third of them are receiving advanced chemotherapy. Many of the rest are taking part in Phase I or Phase II clinical trials of new and promising therapies that could save lives of future patients.

After Six year-old Chelsea hugged her teddy bear tight.

“Teddy’s hair didn’t fall out,” she said, patting her own bald head. “So he’s my good-luck bear. He’s going to help me get better from cancer.” Teddy may be Chelsea’s good-luck bear, but you can have a part in her fight against cancer by sending a gift today. 5

Jeff Brooks Fundraiser’s Guide to Irresistible Communications, p. 116-117

What makes the “After” story effective?

An effective fundraising story It’s an account of one person (or very few people) It has conflict—something isn’t right: A child goes to

school hungry. It has sensory details: The reader can picture the

situation, see the faces, hear the sounds. Sensory details make the story more memorable and help it reach deep into our emotions.

It’s well written, with strong verbs and concrete nouns—and it flows when read aloud.

It has a fundraising ending, meaning that it is not quite finished (a fully resolved problem makes the donor feel unneeded), e.g., bed nets would solve the mosquito problem, but the nets have not yet been distributed.

6Jeff Brooks Fundraiser’s Guide to Irresistible Communications, p. 40

The donor is the hero of the story!

Very short “stories” One line story aka sparkling first sentence

(adapted from onsentence.org). It was six months before six year-old Sam would

call his adoptive parent "Mom”. Thank you for giving Sam a home.

One surgery, four days of tube feeding and five nights on my bed later: my cat is safe—thanks to you.

A six second video using Twitter’s Vine.

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We knock ourselves out acquiring new donors

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“…it's becoming increasingly common for nonprofit organizations to pay a net initial cost of between $5 and $50 to acquire an average new donor.” Mal Warwick, Mal Warwick Associates, www.malwarwick.com.

We tolerate 50% 57% of our donors disappearing each year

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2005: Half of the donors who had made a gift in 2004 made one in 2005.

2012: Only 43% of the donors who made a gift in 2011 made a gift in 2012 (median)

Drill down one level (data 2005-2010):Repeat donor retention was 70%New donor retention was 27%

These findings are based on data provided by 2,840 participating nonprofits about the 2011-2012 behavior of 1.556 million donors to their organizations.

Association of Fundraising Professionals & The Center on Nonprofits & Philanthropy at the Urban Institute, 2013 Fundraising Effectiveness Survey Report (FEP), 2013.

2nd gift during Year 1 doubles the odds of a gift in Year 2

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Tick tock…

“Most importantly, we recommend that you do everything in your power to shorten the time between when a donor makes their first gift and when they hear from you again. The longer you wait to continue the conversation, the less likely the renewal. Even waiting 6 months can drastically affect not only the amount of gifts, but also the size of the gift.”Christ, Rick, VP Amergent, Donor Stewardship: Making virtual friends for life, a white paper, 2010

Lifetime Value

“Typically a 10% improvement in the level of loyalty now increases the lifetime value

of the fundraising database by around 50%. This happens because the effect

compounds over time.”

Study Fundraising website www.studyfundraising.infoCompiled by by Professor Adrian Sargeant and Professor Jen Shang

What is your Second Gift Ratio™?

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Do your donors stick with you? What percentage of first-time donors make a second gift? A third gift?

Having benchmarks puts you in a position to quantify your improvements!

Second Gift Ratio (SGR) =# of donors who made a first-time gift in year 1 who also made a gift in year 2/#of donors who made a first-time gift in year 1

If 100 donors made a first-time gift last year and then 45 of them made a gift this year, SGR= 45/100 = .45 or 45%

What donors want:To be thanked promptly, to be

thanked in a personal way and to know their gift had impact

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“93% of individual donors would definitely or probably give again the next time they were asked by a not for profit that thanked them promptly and in a personal way for their gift, and followed up later with a meaningful report on the program they had funded. Under these circumstances, 64% would give a larger gift and 74% would continue to give indefinitely.”

Penelope Burk

Call first-time donors within 48 hours

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Forget about gift size

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The focus on gift size kills retention rates. This is true of all donors, but especially first-time donors, whose long-term behavior toward your organization is deeply influenced by your first steps.

Exercise: How are you going to thank first-time donors?1. I will spend ___ minutes/week calling donors. If I don’t have telephone

numbers I will send hand-written thank you notes. If I only have email, I will email. By the end of the year, I will have reached over 1,000 donors. Yes, I will pick up the phone!

2. I will invite board members to make thank you calls to first time donors, with the goal of recruiting two or three willing volunteers (the board will thank you – it’s a no-risk, high reward activity) To make this happen, I need to talk to: ___________________

3. I will engage the following people in making thank you calls: ____________________________________________________

How will you promptly get the gift information to the callers (remember, you just need name, gift date, and telephone number, not the amount)? _________________________________________________

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New donor “welcome” package Opportunity to communicate with a new donor

ten to fourteen days after you send your thank you letter

Test “Welcome to <nonprofit name>” tease on the envelope (or say nothing)

Goals: Familiarize donors with you work and accelerate bond

Technique: Feature donor stories and talk about difference donors are making A cover letter signed by ED or VP A recent newsletter or annual report—use a

sticky to highlight an article of interest Recent accomplishment highlights Information about how to become involved, e.g.

volunteer, and/or upcoming programs/events Donor interest survey with return envelope

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No solicitation in welcome package.

Thank your donors 5 times Within a week (48 hours is the gold standard)

A call or hand-written note for first-time donors A donor-centered thank you letter IRS receipt

What impact is my gift having? Photos of the gift in action A front-line story from a staff member A testimonial from a client Program update in a newsletter Call from a board member or staff member Volunteer thank-you-a-thon

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New donor annual fund* timeline

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48

hours

7

days

14-21

days

60-90

days

120-150

days

Thank you Welcome

“IRS” if separate

Impact

Go for 2nd gift; acknowledge that your are asking for a 2nd gift

* The first 60 days are identical for a new major gift, except the “welcome” is into whatever special group the donor has joined along with an explanation of benefits, if applicable. The 2nd gift ask is preceded by a conversation that clarifies donor’s interest. Prospect research informs how much. Solicitation is in person—when the time is right based on interest and involvement. Impact is conveyed quarterly—sometimes by phone or visit, and other times via snail mail or email.

Recurring gift option.

Anatomy of a Thank You Letter Be personal: Dear Susan, not Dear Friend

and no ID # An opening sentence that “sparkles,” e.g., They

flit from flower to flower. Glisten in the grass. Each butterfly and

beetle protected because of you. [Lisa Sargent]

Explains how the money is being put to use (impact) in a concise but compelling way (be positive)

Lets the donor know when he/she will receive a program update

Includes the name and phone number of someone the donor can contact

Is personally signed by a high-ranking individual

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Tip: Count the “you’s” in your thank you letter. They should out-number the “we’s.”

Sample thank you

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Be as personal as appropriate with the salutation. Even if you use Mr./Ms., use a comma.

“you, you, you”

“Sparkling” first sentence; tell a story; “impact” information

Prepare for next contact.

Contact info

Separate IRS receipt if possible. If not, then enclosed, preferably, or at the bottom.

Signed by executive leadership

P.S. is the 2nd most-read line. Use it!

Thank you “do not’s” Do not begin the letter with “On behalf of” or

“Thank you for.” These phrases are predictable and uninspiring (71% use one or the other) Page 37 Donor-Centered Fundraising

Do not ask for more money or continue to sell (53% of donors say this is rude; 8% stop giving) Page 41 Donor-Centered Fundraising

Do not ask the donor to do anything, e.g., a survey…

Do not use pre-printed cards (51% of study respondents said a superior thank you letter is personalized in some way) Page 38 Donor-Centered Fundraising

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IRS-required language turns even a “sparkling” communication into

the “IRS letter”

IRS-required language: Send it as a separate enclosure or separate letter, if possible. If not, consider placing it below the P.S.

The “you” test Take your newsletter, appeal letter, website home

page, annual report—any donor communication—and circle the “you’s.”

To pass the test: Newsletter: Red circles in headlines, subheads, the lead

paragraphs, every offer, many caption and throughout the articles

Appeal letter: Red circles in 1st or 2nd sentence, last sentence, P.S. and sprinkled throughout the text

Home page: Red circles in the headlines, in the banners, in the clickable teasers (“You can learn more…. Click here.”)

Page 200, Keep Your Donors

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Exercise: What’s your opening sentence?

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Take advantage of the internet The donor has just about finished reading your personal,

donor-centered, impact-oriented thank-you email. You have his/her attention. Send the donor to a video or resource on your website...

to your blog... to Twitter or Facebook...”How to write thank-you emails that inspire, Network for Good Webinar 3/21/12: Lisa Sargent Communications

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How to write thank-you emails that inspire, Network for Good Webinar 3/21/12: Lisa Sargent Communications

Real-life sample from Lisa Sargent: charity:water.

Tax receipt arrived as promised, as did a beautiful follow-up thank-you email.”

“OK, so this isn’t the email. It’s the redirect. But if you want to see how to tell a story in a thank-you message, you can’t get much better than this.

ResourcesResearch Association of Fundraising Professionals & The Center on Nonprofits & Philanthropy at the Urban

Institute, 2013 Fundraising Effectiveness Survey Report (FEP), 2013.http://www.afpnet.org/files/ContentDocuments/FEP2013FinalReport.pdf

Burk, Penelope, Donor-Centered Fundraising, © 2003. Donor-Centered Fundraising is Registered Trademark of Cygnus Applied Research, Inc.

Christ, Rick, VP Amergent, Donor Stewardship: Making virtual friends for life, a white paper, 2010. http://amergent.com/Donor_Stewardship_Making_Virtual_Friends_for_Life.pdf

Flannery, Helen and Harris, Rob, 2011 donorCentrics™ Internet and Multichannel Giving Benchmarking Report, TargetAnalytics, a Blackbaud company, 2011.

Levis, Wilson & Williams, Cathlene, Ph.D., CAE, “A Better Measure of Success: How to Use AFP’s Growth-in-Giving Reports to Improve Fundraising Performance” , Advancing Philanthropy, March-April, 2011.

Network for Good and True Sense Marketing,The Online Giving Study: A call to reinvent donor relationships, 2010. www.onlinegivingstudy.org

Oppenheimer, Daniel M. and Olivola, Christopher Y, Eds., The Science of Giving: Experimental Approaches to the Study of Charity, Psychology Press, © 2011.

Sargeant, Adrian and Shang, Jen, Fundraising Principles and Practice, Jossey-Bass. © 2010.

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ResourcesCommunications Ahern Communications Ink www.aherncomm.com Ahern, Tom & Joyaux, Simone, Keep Your Donors: The Guide to Better Communications and

Stronger Relationships, © 2008. Wiley & Sons. Bennett, Ty, The Power of Storytelling, Sound Concepts, Inc., © 2014. Berry, Andrea and Bernard, Chris, 11 Ways To Use Technology To Thank Your Donors,The

NonProfit Times, August 8, 2011. Brooks, Jeff, Fundraisers Guide to Irresistible Communications, Emerson & Church, © 2014. Lisa Sargent Communications, www.lisasargent.com Free resources:

How to Write Thank-you Emails that Inspire Eight Laws for Donation Thank you Letters

Sofii (showcase of fundraising innovation and inspiration) www.sofii.org and specifically: Sample thank-you letters for you to swipe by Lisa Sargent www.sofii.org/node/274 How to write a better thank-you letter (and why it matters) by Lisa Sargent www.soffi.org/node/258

Miscellaneous Bloomerang fundraising software: next generation fundraising software that focuses the

organization on donor retention

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Thank you for attending!

If you have additional questions or if we can be of assistance, please do get in touch:Diane Remin617 596-6086 directdiane@majordonors.com@DianeReminGiving is good for your health—and I can prove it!

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