Disaster Donor Retention – Reprise

Disaster Donor Retention – Reprise

Like you, over the past several weeks our attention has been focused on Hurricane Harvey and Hurricane Irma and the destructive paths that they’ve carved through the U.S. And as our managing partner Bill returns home from his 2nd evacuation in less than 12 months, our thoughts and prayers are with the many people who were affected by the storms. But, as we did last year at this time after Hurricane Matthew, we think it’s a good time to look at the trends of new donors who respond to natural disasters and their retention in the following year – or lack thereof. Below is a graph for a social services nonprofit in an area hit by a natural disaster in FY13. This graph shows the number of new donors acquired each year. There was an 88% spike in the number of new donors in FY13, then a 58% decrease in new donors the next year. And below is the overall retention for the same organization. Their overall Retention dropped 12% – from 53% to 46% in the year after the disaster (although retention recovered nicely in FY15). And in FY14, Second Year Donor Retention dropped 30%, from 6 to 18%! Sometimes, there’s little that can be done to increase these new donors’ retention. They are motivated to give by the disaster and may not be converted to give to the organization’s overall mission. In surveys, many donors don’t even consider themselves donors TO the organization, but instead to the event. “I gave to Hurricane Matthew”, NOT “I gave to XYZ Organization.” Still, these donors should receive all of the stewardship...
Sustainer Donor Value

Sustainer Donor Value

We recently did some analysis on a client’s sustainer or monthly pledge donors. The client wanted to see how much donors were worth AFTER joining the monthly pledge program compared to their value BEFORE joining the program. While this wasn’t a test and we can’t directly prove cause and effect, we do find that the donors were worth $52 more – a 24% increase – after joining the monthly pledge program. If those donors stay on the program and maintain that difference in value, that’s an additional $260 over five years for every donor that joins the monthly giving program. So, maybe that means that they can afford to invest a little more in converting annual donors to monthly pledge donors. If they get an additional 200 donors to become sustainers each year, that’s an additional $10,000 each year. So, that’s $50,000 over 5 years. With an additional 200 new sustainers EACH year that’s $150,000 cumulative over 5 years! So maybe that means the organization can also spend a little more to cultivate and thank those donors once they become monthly sustainers. Even with a welcome package that costs $10 and another $10 invested in cultivation each year, that still leaves the organization with an additional $200 net per donor over 5 years. Pledge donors are more valuable. Are you treating them that...
The Medium and the Message

The Medium and the Message

I recently read an interesting article that reported on research from the USPS. It’s called “Why Direct Mail is More Memorable”. Now, the Post Office certainly has a vested interest in promoting direct mail, but aside from that, it’s a worthwhile read. If you have an extra 3 minutes, you should check it out. To summarize the study, the USPS partnered with the Center for Neural Decision Making at Temple University’s Fox School of Business to do the research. They studied people’s response to mail and print ads using Eye Tracking, Core Biometrics and Functional Magnetic Resonance Imaging – high tech stuff. Their findings? The article reports that the study participants spent more time with direct mail and print ads than they did with digital ads and they also remembered the messages more quickly and confidently with direct mail and print ads. “Physical ads elicited a stronger emotional response than their digital counterparts and, overall, had a longer-lasting impact.” Their conclusions are no different than what most savvy marketers already know – an integrated campaign is always the strongest campaign. We are creatures that like to touch things, interact with things. Including direct mail in a campaign gives a distinct advantage in being able to deliver a deeper...
More is Not Always More

More is Not Always More

As we Atlanta Falcons fans know, just because you’re ahead at halftime doesn’t mean that you’re going to win. More is not always more. We all know that Acquisition Strategy is important for donor long-term value and for a non-profit’s long-term income, but HOW important? I recently did some analysis for a non-profit, and the numbers were striking – especially when looking at the donor’s initial gift size and the subsequent LTV. Due to a change in Acquisition Strategy, the new donor average gift jumped 48% from $46 to $68 between FY14 and FY15. And the projected 5-year LTV for the FY15 new donors jumped 49% over the LTV for the FY14 new donors, from $159 to $237. Not surprisingly, with the new acquisition strategy, the client had a decrease in number of new donors. But, with a 10% decrease in number of new donors, there is still a significant increase in revenue over 5 years: 5,000 new donors X $159 LTV = $795,000 4,500 new donors X $237 LTV = $1,066,500 If you factor in cultivation costs at an average of $7/year per donor (and the savings from not mailing the 500 donors NOT acquired) that’s a net increase of $289,000 over 5 years. If you continue this same acquisition strategy for 5 years, that’s a net increase of $1,445,000 for those new donors. So, all told, acquiring more valuable donors to start with makes a big difference down the...
Major Donors – In the Beginning

Major Donors – In the Beginning

Recently, an organization wanted to take a look at where their $1,000+ donors originated. After a quick channel analysis, we came up with this chart. For this nonprofit, 55% of their $1,000+ donors came in through their Acquisition Mailings. Another 23% gave their first gifts online. Four percent gave their first gifts to codes categorized as “Cultivation Mail” – mostly newsletters – and 9% of the $1,000+ donors gave their gifts to “Miscellaneous” codes like White Mail. So, Acquisition Mailings are extremely important – not just for the new donors they bring on for direct mail – but also as the entry point for future major donors. Over half of new major donor come in to the organization this way. Do you treat your newly acquired direct mail donors like they are your future major...