Fundraising Effectiveness or Three Steps Forward, Two Steps Back!

AFP and The Urban Institute recently published their “2013 Fundraising Effectiveness Survey Report”. The report summarized data from 2,840 nonprofits covering their fundraising efforts for 2011-2012. It contained some very interesting and compelling facts:

• For every $100 gained through fundraising in 2011-2012, $96 was lost through gift attrition.

• Gains of 866,000 new donors were offset by losses of 909,000 lapsed donors for a negative growth in donors of 44,000.

• Larger organizations fared much better than smaller ones; organizations raising over $500k had an average net gain of 16.6%, organizations in the under $100k group had an average net loss of -13.5%.

• The average donor retention rate for all categories is 41%.

• The retention rate for first time donors is even more dire: 22.9%, but if you can get the second donation it jumps to 60.8%.

• The total of philanthropic giving in the USA has remained at 2.0% of GDP for the past 40 years.

• It costs less to retain and motivate an existing donor than to attract a new one. Taking positive steps to reduce gift and donor losses is the least expensive strategy for increasing net fundraising gains.

It’s not rocket science and for most of us none of this information will be that surprising. The report contains lots of statistics and methodologies. It also has some trenchant advice for those of us looking at it seriously. We work so hard to get donors in the front door; we need to work just as hard to keep them from slipping out the back.So, remembering that what gets measured gets improved upon:

• Do you know your donor retention rate?

• Have you established a donor retention goal?

• Does the retention rate measure by donors and dollars?

• Do you know downgrades as well as no gift at all by donor?

• How often do you communicate with donors directly? (An email doesn’t count.)

• Have you gotten advice from the experts, Clair Axelrad, Dr. Adrian Sargeant and Tom Ahern specifically? Tom was the keynote speaker at last November’s Philanthropy Day in Delaware. Adrian Sargeant will be the 2014 Philanthropy Day (Delaware) keynote.

Think of ways to make net gains instead of always trying to make up lost ground.