By Deborah Kaplan Polivy, Ph.D.
We do so, I think, because we believe that new donors will help us reach our annual fundraising goals and thereby achieve what we define as success. Of course, we also need to replace all of the contributors that we lose.
But what if “we turned the tables around?” What if we developed different measures of success – not just realizing the annual goal but also an increase in the number of donors we retain from year to year? What if our focus changed from bringing in and cultivating new donors to keeping those we have? That does not mean that we forget about attracting new donors; it just becomes one goal among many that we aim to achieve.
These next three scenarios actually happened.
#1: “I have scoured countless brochures, programs, and annual reports,” began the Development Director’s report to the board, and have identified numerous individuals who could be donors to our organization. “Your challenge,” she continued, “is to call these people and cultivate them to become contributors to us.”
She described how much time she had spent identifying these potential donors and how this effort would produce numerous new supporters of the organization. She said that she would assign every board member a few of these names and how exciting this entire process would be. And that was the end of the presentation.
#2: I was conducting a board training and I, along with the organization’s development director, had presented charts showing where the institution had fallen short in renewing donor support. Using the Donor Lifecycle Map, we described how a particular problem was the gap between first and second gifts. In other words, a lot of people made one contribution, either in acknowledgement of someone who had been honored at a gala or some other kind of event or responded to a written or oral request, but never donated again.
The first chart that we shared is displayed below and illustrates the shortfall of donors between first and second gift. (First and second gift are self-explanatory; second-year active means that people are involved with the institution and engaged in some way such as joining a committee, hosting a parlor meeting, participating in a telethon, etc.; multi-year active is the individual who has given three or more gifts but not at the level of major giving or stretch giving which just means that someone has communicated that a donation is a result of a strong commitment and is a “stretch”; and finally ultimate giving reflects an endowment pledge or outright donation.)
Donor Lifecycle Map
This next chart that we shared showed just how large the group of lapsed donors was in relation to total gifts received.
Donor Lifecycle Map with Lapsed Donors
Our challenge was to help the board understand that the organization needed to develop a strategic fund development plan that would include a goal to reduce the amount of people who stopped giving. One of the tasks would be to learn why former donors did not continue and to develop an approach for reengagement.
In spite of the charts and the discussion, one board member, a former president of the organization, asked the following question: “How do we get those wealthy people in town to start giving to us?” He had no interest in mapping the data or looking at the number of people who made one contribution but never donated a second time. He had a singular goal—to bring in new, wealthy major donors.
I suggested that a mechanism may be to ask each board member to identify one such person with whom they have a relationship, arrange for that individual (or couple) to visit the facility and meet with the CEO and/or development director, or host the prospect at the next gala or other upcoming event. But, I asked, why are you so concerned about bringing in new wealthy donors when you are having difficulty keeping the ones you already have, as illustrated by your Donor Lifecycle Maps?
#3: My third example again comes from my consulting practice. I was hired by a theater to help improve its development efforts. The mandate from the board was the following: We want you to develop a strategy to obtain contributions to our institution from the major donors to the other arts organizations in town. Notwithstanding that the theater had a substantial subscriber base most of whom were not donors, the goal was to bring in people who had no or little connection to the organization.
All of these cases convey the same message. Bring in new donors and look to other organizations to find them. My response was instead of putting so much attention on new donors, why don’t we look at those people who for some reason had a connection to our not for profit but did not follow up in their giving or, as in the last case, are obviously committed but make no contribution. The development director in the first example who spent so much time culling the programs and lists of donors to other organizations could have used those same hours calling the agency’s lapsed donors to determine why they had stopped contributing and maybe developing a cultivation plan for reinstating them.
Every institution needs a donor pipeline. There are many tools for obtaining first time supporters and they include social media, honoring individuals who attract donations from associates, friends and family, and direct mail. But the problem is that often there is no plan for acquiring the second gift from these same people. Focus is usually on bringing in new donors without paying attention to how to keep them and even move them along the Donor Lifecycle Map to multi-year active and even major gift. For those who “drop out” further along the Donor Lifecycle Map, after a couple of gifts or even after making three or four major donations, the development strategy must focus on talking to them and learning why they ceased their support. The answer may be a life change for the donor, but it also may be that we did not pay enough attention to them or respond to an inquiry, critique or some other concern.
The issue of retention is huge and to begin to address it, I recommend that each organization first map its donor data over three to five years to determine development strengths and weaknesses. The strengths get maintained and improved. The question becomes how do we address weaknesses which very often are related to keeping our donors.
Between first and second gift, I have lots of suggestions. Most importantly, if it is feasible to determine why the donor has made a first gift, then I recommend returning to that source. For example, if someone has made a contribution in acknowledgement of an individual who has been honored, then it is important to go to that honoree and ask the person to help in developing a strategy for retaining the contributor and obtaining a second gift.
If the source of the gift was something else, let’s say social media, then a personal thank you would be in order – not a template acknowledgement – but a real note of appreciation that is individualized and sent by email or if a home address is available, by “snail mail.”
I hear all the time that “we don’t have time or resources to put into such efforts.” But if we don’t, we are always going to be scurrying to obtain that first gift.
I have also learned that development officers are willing to make an effort to pursue first time donors if the latter make what is considered a major gift, no matter how that level is defined. They may even try to engage those who make what is considered a large gift, but not at the major gift level.
Based on these experiences, I have created a new model for retaining donors that incorporates the Donor Lifecycle Map and takes into consideration the Donor Pyramid, with which we are all familiar. I still start with mapping the data. I then suggest that when we cannot analyze each gift by source but rather by size, then we use the Donor Pyramid to develop a strategy.
What does that mean? It suggests that for every category on the Donor Lifecycle Map, we create a plan for those on the upper levels of giving and those on the lower. So, if a donor makes a large, first gift, we employ personal cultivation tools where we do our best to talk to the individual one on one hopefully, at a face to face meeting including one of our supporters, if possible, who has influence with the donor. For those at the lower end of the Pyramid, we might send a template letter but one that distinguishes the individual – noting that we recognize that this is a first, second or ongoing contribution and how important it is to our mission. We can add that we hope the individual will continue to contribute and we might even invite the donor to some kind of event. If we find someone to accompany this supporter to a function – all the better.
The same process would occur all along the Donor Lifecycle Map. We would differentiate our strategies for each segment based on where the gift appears on the Donor Pyramid.
This proposition is not without work. The point is that it combines attention to retention and gift size and thus would be more acceptable to boards and staff than an approach based solely on retaining donors.
Within the multi-year active segment (those donors giving three or more years) on the Donor Lifecycle Map, the strategy becomes even more differentiated. For example, high level but not major donors would demand one set of cultivation tools to move them to the next sector, major or stretch gift. But, these people are also prospects for ultimate or endowment giving and thus “integrated asks” or some other approach might be designed. Low level supporters in this same multi-year active segment who have given for many years (as determined by each organization) and are prospects for “ultimate” or endowment contributions would require a somewhat different plan for moving them to that last segment on the Map although they, too, would probably need some kind of personal approach.
I have created a new model of a Donor Lifecycle Map that incorporates the Donor Pyramid as shown below. It is a useful framework for creating strategic development plans because it illustrates how to approach each segment of the Map. It suggests a thoughtful process for moving donors along the Donor Lifecycle Map and thus highlights retention as a priority but recognizes the reality of the development field where gift size plays a huge role in determining cultivation strategy. My contention is that using this framework will result in a lot more money over the long run. While I have only shown one segment of the Donor Lifecycle Map for illustrative purposes, the Pyramid is a tool that is applied to all of them.
The Donor Lifecycle Map and the Donor Pyramid:
A New Model for Strategic Development Planning
I am not alone in suggesting that attention to donor retention become a greater focus of our fund development efforts and it must be addressed cogently. I found this piece about the Jewish Federation of Metropolitan Detroit in the November 12, 2015, issue of The Chronicle of Philanthropy. “After a long slide in support,” the Federation accomplished a “turnaround.” The focus changed from emphasizing the “number of dollars raised in favor of the number of donors engaged” and the primary methodology, as described in the article, was to increase the amount of attention paid to supporters “by shifting employees who were skilled at working with donors into those roles.” The CEO recognized that if the “million-dollar donor” was the only one getting recognition, “the hundred-dollar donor is going to think, ‘Well, what do they need me for?’”
So instead of a thermometer measuring the amount of money raised, the mindset changed toward donors and retaining them using a “donometer” on each floor of the building to count the number of contributors. This was a real transformation for an organization which always emphasized major donors. The results, according to the article: “Donations rose nearly 60 percent in 2014 over 2013.”
Deborah Kaplan Polivy, Ph.D., is a fund development consultant. Her new book, The Donor Lifecycle Map: A Model for Fundraising Success was recently published by CharityChannel Press. She is the author of Donor Cultivation and the Donor Lifecycle Map: A New Framework for Fundraising, (Wiley, 2014). Her website is www.deborahpolivy.com. Graphics by Kim O’Reilly. Copyright (c) 2016 CharityChannel Press, an Imprint of CharityChannel LLC.