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Donor Retention: Current Rates Are Plummeting!
What Can Every Fundraiser Do to Reverse the
Trend?
Presented by:
Jay Love
March 17, 2015
1:00 – 2:30 p.m. Eastern
Noon – 1:30 p.m. Central
11:00 a.m. – 12:30 p.m. Mountain
10:00 –11:30 a.m. Pacific
9:00 – 10:30 a.m. Alaska
Association of Fundraising Professionals 4300 Wilson Boulevard, Suite 300, Arlington, VA 22203-4168
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www.afpnet.org
Association of Fundraising Professionals
2015 WEB/AUDIOCONFERENCES
Educating Fundraisers in the 21st Century
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The Association of Fundraising Professionals
WEB/AUDIOCONFERENCE 2015
March 17, 2015
Jay Love
Donor Retention: Current Rates Are Plummeting! What Can Every Fundraiser Do to
Reverse the Trend?
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SITE ROSTER
Jay Love
Jay B. Love currently serves as the CEO and Co-Founder of Bloomerang. Bloomerang serves the non-profit sector only with cutting edge technology tools for fundraising and communications. Prior to Bloomerang, he was the CEO and Co-Founder of eTapestry for 10 years. eTapestry was the leading SaaS technology company serving the charity sector. Jay orchestrated the sale of eTapestry to Blackbaud in 2007 after growing the company to more than 10,000 non-profit clients and charting seven years of record growth. Before starting eTapestry, Jay served 14 years as President and CEO of Master Software Corporation. MSC provided a widely used family of database products for the non-profit sector called Fund-Master. Jay has also been a business consultant for numerous high tech firms throughout the U.S. He is a graduate of Butler University with a B.S. in Business Administration. He currently serves on the boards of numerous non-profits and one private tech company. He and his wife Christie served as Co-Chairs for the Indianapolis YMCA 2011 Capital Campaign and are the proud parents of three children as well as five grandchildren. He was a founding Chairman of NPower Indiana, Founding Member of TechPoint Foundation and Founding Member of the AFP Business Member Council. He is a past member of the AFP Business Member Council. He is a past member of the AFP National Board, but currently serves as Chairman of the AFP Ethics Committee. He is a current Board Member for The Lilly School of Philanthropy at IU, Gleaners Food Bank, and TechPoint Foundation for Youth. Over the years he has given more than 2,000 speeches around the world for the charity sector and is often the voice of new technology for fundraisers.
3/5/2015
1
What Fundraisers Can Do to Stop Falling Donor Retention Rates
Your PresenterJay B. Love
• 30 Years of Technology Leadership• Over 20,000 Database Installations• Former Founder & CEO of eTapestry• Former CEO of Master Software/Fund-Master• AFP Board Member• AFP Ethics Committee Chairman• Center on Philanthropy at IU Board Member• Innovation Fund at Butler University Board Member• Gleaners Food Bank Board Member• Co-Chair of Indianapolis YMCA Capital Campaign
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3/5/2015
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Do you know your retention rate?
In our surveys, less than 45% of fundraisers
knew their current donor retention rate.
Do you know your retention rate?
3/5/2015
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Fundraising Effectiveness Project (FEP)A project to help nonprofit organizations
measure and compare
Participating Donor Software Firms:
• Donor2/Campus Management Corporation• PhilanthrAppeal (FundTrack Software)• DonorPerfect Fundraising Software• The Raiser’s Edge ® (Blackbaud)• eTapestry • Avectra• Bloomerang• Sage Software• MatchMaker FundRaising Software• Telosa Software (Exceed!)• Metafile
Fundraising Effectiveness Survey »
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The 2014 results are in »
Nearly 6 out of every 10 donors do not give again!
Gift retention isn’t much better »
3/5/2015
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Who to focus on »
Donor Attrition Over Five Years
# of
Donors
Attrition
Rate
Donors
Remaining
After 1
Year
Donors
Remaining
After 2
Years
Donors
Remaining
After 3
Years
Donors
Remaining
After 4
Years
Donors
Remaining
After 5
Years
1,000 20% 800 640 512 410 328
1,000 40% 600 360 216 130 78
1,000 60% 400 160 64 26 10
So what?
3/5/2015
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So what?
Improving donor retention rates by just 10% can increase the lifetime value of your database by 150-200%!- Dr. Adrian Sergeant,
Bloomerang Chief Scientist
Donor retention math »
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# of Donors in Current 12 Months(from the previous years pool)
Divided by
# of Donors in Previous 12 Months
Calculating Your Retention Rate
Total Dollars from Donors in Current 12 Months
(from the previous years pool)
Divided by
Total Dollars from Donors in Previous 12 Months
Calculating Your Dollar Retention Rate
3/5/2015
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19
• $0 - $25
• $26 - $100
• $101 - $1,000
• $1,001 -$10,000
• $10,000 & Up (50% of Total)
(Where do you desire
a 10% change?)
Importance of Dollar Retention »
Seattle’s Lakeside Upper School counts … Bill Gates among its alumni. Rumor has it a fundraiser for the high school called Gates, who asked: “How much is everyone else giving?” About $75 he was told. “So put me down for $75,” said Gates.
-- Forbes, Jan 22, 1996, p. 16
Beyond Dollar Retention Rate »
3/5/2015
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“The total net contribution that a customer/donor generates during his/her lifetime in your database”
Defining Lifetime Value »
LTV = ∑Ci
Where
c = net contribution from each year’s fundraising activity
i = expected duration of each relationship in years
Defining Lifetime Value (LTV) »
3/5/2015
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$1000 +
$500 - $1000
$100 - $500
$25 and under annually
$25 - $100
Value
Value Segments »
Time
Why for-profit customers leave »
• 1% - Death
• 3% - Relocation
• 5% - Won by competitor
• 14% - Bad complaint handling
• 77% - Lack of interest from us
3/5/2015
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• 5% - thought charity did not need them
• 8% - no info on how monies were used
• 9% - no memory of supporting
• 13% - never got thanked for donating
• 16% - death
• 18% - poor service or communication
• 36% - others more deserving
• 54% - could no longer afford
Why nonprofit donors leave »
https://www.linkedin.com/today/post/article/20140520191728-746287--infographic-
why-donors-stop-their-support
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• Recency and pattern of giving
• Cash donors vs. sustaining donors
• # of years giving +
• Upgrade / Downgrade + -
• Lapsed -
• Event attendance +
• Opens email +
• Click links in emails +
• Unsubscribes from email -
• Has stated communication preferences +
• Has inbound interactions +
• Has soft credits +
• Volunteers +
Automatic engagement factors »
• Drip feed mission performance data
• Connect often (1st 90 Days!)
• Be personal (SEGMENT via DB)
• Develop like a good personal friendship
• Find & use numerous human connectors
• Always communicate what monies are doing!
6 key retention drivers »
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Donor communications »
“Are your charity's fundraising, advocacy or other "persuasion" communications riddled with common, hidden flaws that limit their effectiveness?”- Tom Ahern,
Bloomerang Donor Communications Head Coach
You’re trying for “mental nods.”
Secret to Success #1 »
3/5/2015
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Your appeal is NOT about how wonderful your organization is.
Your appeal IS about how wonderful the donor is.
Secret to Success #2 »
1st paragraph: 10 words or less.
Secret to Success #3 »
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Know your SMIT.Single Most Important Thing.
Secret to Success #6 »
Get them into a fight.
Secret to Success #7 »
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Minimum donor segments »
• 48 Hour Rule
• Be Different Than the Rest
• Handwritten Rule Written Communications
• State Exactly What the Monies will Fund
• Call or See in Person as Often as Possible
5 acknowledgement principles »
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(Involve Your Entire Fundraising Team)
• Fully Map a Track for Each Key Segment
• Survey in 1st 90 Days, Then “Honor”
• Involve Human Connectors
• Nurture Means Personal
• Never Forget the “You” Test for EVERY “Touch”
5 communication principles »
Questions?Jay B. Love
[email protected]@JayBarclayLove
3/5/2015
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Coming Next….
April 14, 2015
1:00 – 2:30 p.m. ET
Fundraising on a Shoestring (Fundraising for
Those With No Time to Surprise)
Alice Ferris, ACFRE & James Anderson
For a listing of the 2014 AFP Webinar Series, please visit our
website at www.afpnet.org in the professional development section.
If you’re interested in more sessions on Donor Retention and Stewardship
you may want to consider attending AFP’s International Fundraising Conference
• Know Thy Donors: The Comprehensive Donor Feedback Project
• Building Donor Loyalty: What’s New?
• Donor Relations the Walt Disney Way
• Stewarding Event Donors: From One Transaction to Major Engagement
• Stewardship in a Small Shop: Building Lasting Relationships with Donors
For more information on these and other sessions and to register
please visit the conference website: www.afpfc.com
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I was a participant in the AFP Webinar held
March 17, 2015
1:00 – 2:30 PM Eastern
Donor Retention: Current Rates Are Plummeting! What Can Every
Fundraiser Do to Reverse the Trend?
Presented by:
Jay Love
Full participation in this session is applicable for 1.5 points in Category 1.B – Education
of the CFRE International application for initial certification and/or recertification.
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Association of Fundraising Professionals
March 17, 2015
Donor Retention: Current Rates Are Plummeting! What Can Every Fundraiser Do to Reverse the Trend?
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Association of Fundraising Professionals
2015 WEBINARS Educating Fundraisers in the 21st Century
JANUARY 28, 2015, WEDNESDAY
INTEGRATING PLANNED GIVING INTO
YOUR CAMPAIGN/MAJOR GIFTS
PROGRAM BRIAN SAGRESTANO, JD, CFRE
FEBRUARY 18, 2015, WEDNESDAY
MAKING EACH RUNG COUNT: HOW
TO BUILD A DONOR LADDER THAT
GOES FROM ANNUAL GIFT TO
ULTIMATE GIFT MICHAEL DELZOTTI, CFRE &
CHRISTOPHER KASAVICH, MBA, CFRE
MARCH 4, 2015, WEDNESDAY
IS YOUR ORGANIZATION
SUSTAINABLE? SIMONE JOYAUX, ACFRE
MARCH 17, 2015, TUESDAY
DONOR RETENTION: CURRENT RATES
ARE PLUMMETING! WHAT CAN
EVERY FUNDRAISER DO TO REVERSE
THE TREND JAY LOVE
APRIL 14, 2015, TUESDAY
FUNDRAISING ON A SHOESTRING
(FUNDRAISING FOR THOSE WITH NO
TIME TO FUNDRAISE) ALICE FERRIS, ACFRE & JAMES
ANDERSON, CFRE
APRIL 29, 2015, WEDNESDAY
FIND HIGH CAPACITY PROSPECTS
HIDING IN PLAIN SIGHT RACHEL MUIR, CFRE
MAY 7, 2015, THURSDAY
SEVEN SECRETS OF SUCCESSFUL
SOLICITATIONS
ANNE MELVIN, J.D.
MAY 20, 2015, WEDNESDAY
ENGAGING YOUR BOARD IN
FUNDRAISING FOR THE SMALL SHOP SANDY REES, CFRE
CFRE APPROVED CONTINUING
EDUCATION PROVIDER
EACH WEBINAR SESSION OFFERS
1.5 CFRE POINTS!
JUNE 3, 2015, WEDNESDAY
MAKING FRIENDS WITH FINANCIAL STATEMENTS:
ACCOUNTING AND BUDGETING CONCEPTS FOR
FUNDRAISERS STEPHANIE CORY, CFRE
JUNE 18, 2015, THURSDAY WHY AND HOW TO USE SOCIAL MEDIA TO SHOW
GRATITUDE TO DONORS STEVEN SHATTUCK
JULY 15, 2015, WEDNESDAY
WIN WIN WIN: BUILD DEEPER RELATIONSHIPS WITH
YOUR CORPORATE PARTNERS THROUGH CAUSE
MARKETING TANIA LITTLE, CFRE
AUGUST 12, 2015, WEDNESDAY
WHAT YOU NEED TO KNOW ABOUT PLANNED GIVING
WHEN PLANNED GIVING IS NOT ALL THAT YOU DO TIMOTHY D. LOGAN, FAHP, ACFRE
AUGUST 25, 2015, TUESDAY
THE CAMPAIGN PREQUEL: SUCCESS BEGINS
BEFORE THE CAMPAIGN PLAN MATTHEW COTTLE, CFRE
SEPTEMBER 16, 2015, WEDNESDAY
IN IT FOR THE LONG HAUL: HOW DONOR RETENTION
AND MAJOR GIFTS CAN TRANSFORM YOUR NONPROFIT JOHN GREENHOE, CFRE
SEPTEMBER 29, 2015, TUESDAY
CREATIVE AND COMPELLING FUNDRAISING MESSAGES
FOR DIGITAL SOLICITATIONS DERRICK FELDMANN
OCTOBER 14, 2015, WEDNESDAY
SOCIAL MEDIA AND ETHICS IN FUNDRAISING DAVID TINKER, CFRE & LISA CHMIOLA, CFRE
OCTOBER 28, 2015, WEDNESDAY
HOW TO RAISE MAJOR GIFTS THE RIGHT WAY AMY EISENSTEIN, ACFRE & DR. ADRIAN SARGEANT
NOVEMBER 18, 2015, WEDNESDAY
TEN IDEAS TO ELEVATE YOUR SMALL SHOP
FUNDRAISING PROGRAM LIGIA PEÑA, CFRE
DECEMBER 10, 2015, THURSDAY
THE WHATS, HOWS AND WHYS OF MAJOR GIFT
SOLICITATION JILL PRANGER, ACFRE
Webinars will be held at 1:00-2:30 p.m. Eastern / 12:00-1:30 p.m. Central 11:00 a.m.–
12:30 p.m. Mountain / 10:00-11:30 a.m. Pacific / 9:00-10:30 a.m. Alaska FEES: $159
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Special AFP Member Bundle - $99 per session when registering for 10 or more programs at one time!
AFP 2015 WEBINAR SERIES
January 28, 2015 Brian Sagrestano, JD, CFRE: Integrating Planned Giving into Your Campaign/Major Gifts Program
February 18, 2015 Michael Delzotti, CFRE & Christopher Kasavich, MBA, CFRE: Making Each Rung Count: Building a Donor
Ladder that Goes from Annual Gift to Ultimate Gift March 4, 2015 Simone Joyaux,ACFRE: Is Your Organization Sustainable?
March 17, 2015 Jay Love: Donor Retention
April 14, 2015 Alice Ferris, ACFRE & James Anderson, CFRE: Fundraising on a Shoe String (Fundraising for Those With No
Time to Fundraise)
April 29, 2015 Rachel Muir, CFRE: Find High Capacity Prospects Hiding in Plain Sight
May 7, 2015 Anne Melvin, J.D.: Seven Secrets of Successful Solicitations
May 20, 2015 Sandy Rees, CFRE: Engaging Your Board in Fundraising for the Small Shop
June 3, 2015 Stephanie Cory, CFRE: Making Friends with Financial Statements: Accounting&Budgeting Concepts for
Fundraisers June 18, 2015 Steven Shattuck: Why and How to Use Social Media to Show Gratitude to Donors
July 15, 2015 Tania Little, CFRE: Win Win Win: Build Deeper Relationships with Your Corporate Partners Through Cause
Marketing August 12, 2015 Timothy D. Logan, FAHP, ACFRE: What You Need to Know About Planned Giving When Planned Giving Is
Not All That You Do
August 25, 2015 Matthew Cottle, CFRE: The Campaign Prequel: Success Begins Before the Campaign Plan
September 16, 2015 John Greenhoe, CFRE: In it for the Long Haul: How Donor Retention and Major Gifts can Transform Your
Nonprofit September 29, 2015 Derrick Feldmann: Creative and Compelling Fundraising Messages for Digital Solicitations
October 14, 2015 David Tinker, CFRE & Lisa Chmiola, CFRE: Social Media and Ethics in Fundraising
October 28, 2015 Amy Eisenstein, ACFRE & Dr. Adrian Sargeant: How to Raise Major Gifts the Right Way
November 18, 2015 Ligia Peña, CFRE: Ten Ideas to Elevate Your Small Shop Fundraising Program
December 10, 2015 Jill Pranger, ACFRE: The Whats, Hows and Whys of Major Gift Solicitation
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