About the Episode

Today we’re going to talk about a topic we don’t talk about much on this show - nonprofits, and more specifically since it’s December, end of year giving. If you’re like me, you’re probably currently being inundated with calls to donate from nonprofits on TV, email, social media, and any other channel you interact with.

Just like other much larger brands, nonprofits struggle with acquisition and retention issues, and today we’re going to talk about how customer, or donor, retention is both a challenge and an opportunity, and even those in the for-profit space might get some insights from this discussion as well.

To help me discuss this topic, I’d like to welcome Ann Fellman, CMO at Bloomerang.

About Ann Fellman

As the CMO for Bloomerang, Ann is responsible for the company's marketing and thought leadership programs to strengthen relationships with the nonprofit community. Ann brings more than 25 years of technology marketing experience, including time at the Minnesota High Tech Association. Prior to Bloomerang, Ann was an independent marketing consultant for B2B SaaS businesses, served as Senior Vice President of Marketing at Code42, and was named one of the “Top Women Leaders in SaaS of 2018.”

Resources

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Synopsis

Nonprofits, like larger brands, face challenges with acquisition and retention. This episode delves into the issue of donor retention for nonprofits. Shockingly, the retention rate for first-time donors is a mere 19%, meaning that 80% of donors do not continue to contribute after their initial donation. This low retention rate poses a significant challenge for nonprofits, akin to losing 80% of customers annually in the for-profit world. However, once a donor becomes a repeat donor, the retention rate jumps to 58%, which is a meaningful improvement for nonprofits.

The episode sheds light on some reasons why nonprofits struggle with donor retention. One key factor is the neglect of basic practices, such as sending thank you notes, providing follow-up communication, and storytelling. Donors may not receive a simple thank you note, may remain unaware of how their contribution was utilized, and may not have a memorable experience associated with their donation. Poor communication plays a significant role in the low donor retention rate.

Furthermore, the episode acknowledges that the digital age has made donating easier, but it has also made it easier to forget about donations. With the rise of online platforms and social media fundraisers, donations can become transactional and lack a personal connection. Nonprofits must find ways to shift from transactional donations to creating compelling events and establishing emotional human-to-human connections in order to enhance retention.

To adapt to the changing landscape, the episode suggests that nonprofits should explore evolving payment options, such as requesting monthly or recurring donations after a first-time contribution. Additionally, nonprofits should focus on storytelling to establish a more emotional connection with donors. By sharing stories about the impact of donations, nonprofits can make the donor experience more meaningful and increase retention.

Nonprofits encounter challenges such as staffing issues, fundraiser pessimism, and donor fatigue. The transcript highlights that nonprofits are often understaffed, lacking the time or technology to effectively maximize their efforts. Fundraiser pessimism is another challenge, as nonprofits may hesitate to make donation requests, assuming that donors are unwilling to give or are fatigued. These challenges make it difficult for nonprofits to retain donors and maintain their support. However, the transcript also mentions the availability of new tools and techniques to help nonprofits address these challenges, such as software that provides first-time call lists and automated thank you emails. Nonprofits need to find ways to free up time and prioritize one-on-one connections with donors to overcome these challenges and improve donor retention.

The episode discusses how nonprofits struggle with donor retention and highlights some tools and techniques that can help improve it. One of the tools mentioned is automated thank you emails. By utilizing software, nonprofits can send automated thank you emails to donors, saving time and ensuring that every donor receives a message of appreciation. This helps donors feel valued and acknowledged for their contribution, increasing the likelihood of future donations.

Another technique mentioned is the use of prioritized call lists. Nonprofits can employ software that provides them with a first-time call list, helping them prioritize who they should contact. This saves time and ensures that donors receive a personal follow-up call, strengthening the donor-nonprofit relationship and increasing the chances of donor retention.

Overall, the episode suggests that utilizing tools and techniques such as automated thank you emails and prioritized call lists can be effective strategies for nonprofits to improve donor retention.