December Crunch: Gift Renewals and Year-End Gifts

crunchBy Avrum Lapin and Andrea Otto

As 2016 draws to a close, many in the for-profit sector look forward to kicking back and enjoying the celebration of the holiday season. For nonprofits, the end of the year is not a time for reflection, resolutions, and parties. Rather, it is a period of frenetic activity and stress about budgets, reviewing lists of donors, and capturing end of year contributions.

Consistently, 30% of all gifts to nonprofits occur in the month of December. In fact, 10% of donations happen between December 29-31, as reported by MoblieCause. That means that while others are planning holiday parties, development directors are “up all night” reviewing numbers, asking for last minute gifts and keeping an eagle eye on the incoming mail.

According to the 2015 Fundraising Effectiveness Project, in 2014 the median donor retention rate for all nonprofits was 43%. That means that more than half of all donors decided not to give to the same organization after their initial gift. This reflects the tidal shifts in the philanthropic marketplace, where donors are no longer “brand loyal,” instead funding program objectives over organizational budgets. Reality is, however, that it costs far less to have a donor renew than to encourage a new donor to give. At this late stage, focusing on gift renewals can make a real difference.

In mid-December, options are limited, but instead of hand wringing, there is still time to reach out to past donors and create an effective plan for gift renewals.

Target: While mass email appeals and direct mail do have their own expected ROIs, nothing is a substitute for a targeted list of donors. Donors who have not yet renewed for this year need an extra nudge at the end of the year to remind them about the good that your organization does for the community. Don’t assume that they will remember! A personal note, second email, or phone call might be all it takes to make a one- time donor into a serial supporter.

Look Back: Going back 3-4 years may feel like too much. However, if a donor liked you 3 years ago, and even lapsed in between, they might be ready for a second look. Let them know your successes and results and the impact that you have had, and what a gift now will do. Adding these donors to the targeted lists when appropriate can have an effect.

Ask for Help: This is the time to enlist board members, volunteers and staff. In a nonprofit organization, fundraising should be part of everyone’s job description. Provide specific training and tools for success, and venues to make it fun.

Widen the Circle: Now is the time to enlist supporters to ask their friends and family to join them in making a year-end gift. As you ask for gift renewals, ask for donors to post their support on social media. This advertising of good will is exactly what makes #GivingTuesday so successful. Charity Navigator reports that over 2/3 of donors give to causes recommended by friends and family. These gifts might be new to your donor pool, but are part of the gift renewal process.

Think Differently: Nearly 80% of people have reported that they would rather receive a donation in their honor instead of a physical gift. Suggest this to donors. Encourage supporters to renew their gifts by making them in honor of friends and family. Creating a tailored email that donors can send is quick and easy. Donors might not have given readily before, but now that it helps shorten their holiday to do list, it might be more attractive.

Set up Recurring Gifts: Though this won’t ease the stress of this year, encouraging monthly or automatically renewing gifts will lessen the burden for next year. This process is simple and can be executed by most online credit card processing services.

By focusing on gift renewals this year, perhaps the goals can be met on 12/29, instead of 12/31 which will make for a much happier New Year!

My colleagues and I welcome your comments and emails. Let us know what you think. Please feel free to contact us at The Lapin Group at 215-885-1550 or to discuss this further.

Avrum Lapin is President and Andrea Otto is a consultant at The Lapin Group, LLC, based in Jenkintown, Pennsylvania, a full-service fundraising and management consulting firm for nonprofits. The Lapin Group inspires and leads US-based and international nonprofits seeking fund, organizational, leadership, and business development solutions, offering contemporary and leading-edge approaches and strategies. A Board member of the Giving Institute and a member of the Editorial Review Board of Giving USA, Avrum is a frequent contributor to and speaker in the US and in Israel on opportunities and challenges in today’s nonprofit marketplace.

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