7 Methods to Improve Donor Retention With Fundraising Tech

Donor retention has finally become a top-of-mind subject for most fundraisers and a decent portion of nonprofit boards.

Case in point, for the first time ever, during a speaking engagement in the Midwest, when the question was posed regarding who knew their organization’s donor retention rate, more than half of those in the room raised their hand to the affirmative!

Awareness is the first step toward solving any problem. Let’s discuss how technology, even at the basic level, can truly reverse the trend of low donor retention rates that so many nonprofits face.

Here are the top seven technology-related methods to improve donor retention that every single organization engaged in fundraising can implement.

1. Data Contextualized Gift Acknowledgments 

Yes, the retention process begins with a proper thank-you, made meaningful to the donor and/or their family by the data collected and stored in your donor database. Collecting this data should be fairly easy no matter what database tools your nonprofit uses. Most charities stumble because they rely on generic receipts, automated and uncustomized from their database.

Key attributes that comprise proper thank-yous include any or all of the following:

• Personalized address and salutation
• The project or fund being supported/its impact
• The type of donor who contributed (first-time donor, monthly donor, long-term loyal donor, etc.)
• An additional P.S. inviting them to attend the kick-off of the project or some other event
• A variable that states their total lifetime giving impact
• If electronic, pictures from the event/project
• The names of family members in some manner, if known
• Other areas of engagement with your charity

Keep in mind, these can be part of the typed letter or email itself, or a handwritten note on the letter (the latter being a nice touch, showing that you didn’t just spit the letter out of a printer and stuff it in an envelope unceremoniously).

2. Segmentation

In order to make the best use of the merge variables mentioned above, donor segmentation is essential.

Segmentation simply means not sending the same gift acknowledgment (or any communication really) to every donor on your list, but instead creating multiple versions of the letter or email that go to specific groups. 

With effective donor segments, you can send messages that include details that will best resonate with your target audience.

Segments take the form of reports in your donor database or fundraising CRM. Creating your segments should be a pretty easy process to implement and can begin with just two segments. As your organization grows and supporters diversify, your segments will expand to 10 or more.

My favorite way to kick off segmentation is based on four starting segments:

• New donors, above average gift amount
• New donors, at or below average gift amount
• Repeat donors, above average gift amount
• Repeat donors, at or below average gift amount

I love its utter simplicity, but yet the above segmentation provides the foundation for mapping out a full communication plan for each segment. Each of the four segments deserves a completely different letter, P.S. and most likely a different person signing!

In addition, the specific segment communication plan might include a phone call or a handwritten note, in addition to the system-created (and customized) letter. The more attention the donor receives, the better.

Additional segments you may expand to include may be:

• Monthly donors
• 5+ year donors
• Lapsed donors (2+ years without giving)
• Volunteers who also donate
• Volunteers who have not yet donated
• Multi-year pledge donors

The sky’s the limit when it comes to segments!

3. A Second Ask Within 90 Days of a First-Time Donation

Believe it or not, your donor has usually made up their mind on whether to donate again by the 91st day after their first gift was made.

However, what you send to that donor in the first three months of the relationship will make the difference between whether or not that appeal is acted upon.

This is why two additional touches, or perhaps even a fourth or fifth, are so important.

There are so many of these touches that technology can help with. Even the mere fact that you can set upcoming tasks as reminders is a great first step. Marking each touchpoint as sent, complete or fulfilled will help you keep your efforts in check.

Here are a few of the touches that are often suggested by the best professional fundraisers I know:

• Thank-you phone call/voicemail/text message
• Welcome packet
• Invitation for a tour/visit (especially if you run a school, animal shelter, etc.)
• Event invitation
• Invitation for a tour/visit
• Invitation for breakfast or lunch
• Recent newsletter with a personal Post-It note
• Handwritten note
• Survey (more below on this)
• Pictures (paperclipped) of project or event sent later
• Personal video message sent by email

Keep in mind that not every first-time donor is an appropriate recipient of these touchpoints. Some donors might want a one-and-done donation. Be on the lookout for memorial or peer-to-peer fundraising donors (other great examples of potential segments). You might not want to smother these folks with appreciation or show your appreciation in a different way.

4. Surveys

The commercial world has become absolutely proficient with the use of surveys. If you have rented a car, stayed at a hotel, purchased an appliance or any of a thousand other items you know a survey often follows.

Why?

It further engages the buyer and strengthens the relationship!

Does further engaging and strengthening the relationship with donors sound important? It should because it is vital in regards to improving donor retention.

Some database systems provide specific survey functionality where the results are tabulated, and in the best cases used to assist in creating an engagement score (more below). Even if it is not automatic in your database, the results from third-party survey tools can be recorded and used in your current database.

Most importantly, the act of the survey being sent to and completed by the donor builds a stronger bond with your organization because you care enough to ask them for their opinion!

5. Reading Level/Donor-Centricity Audit

The term “Ahern Audit” is used by Bloomerang, because the audit process used two underlying concepts that were suggested by Tom Ahern, an industry expert who is well-known and well-loved by many.

This test is used to ensure an effective reading level and adequate donor-centricity of your communicative documents, such as donation requests, sponsorship letters and other messages.

No matter how effective your first draft or starting template (like the examples from Fundraising Letters), an audit will help finalize your communications to make them as effective as possible.

The Ahern Audit (example below) consists of two tests that anyone with a computer and a word processing program can implement. The first test is basically a grade level assessment of your letter or document. You can also use Microsoft Word to run such a test. The very best donor letters are written at the sixth, seventh or eighth-grade reading level.

The second test is often referred to as the You Test because it is merely tabulating the pronouns being used. You count how many of them are about the donor and then compare the number of pronouns that are about you and your organization.

The key is to have twice as many pronouns about the donor!

You should aim to have this donor-centric mindset to help your donors better relate to the message and respond positively.

6. Engagement Level Tracking

This next function or concept is one that can be administered manually, but it is so much easier when you use an effective donor database system.

Engagement level tracking is exactly what the name infers, a measurement of the engagement level of the donor. It can be based upon a multitude of factors ranging from gift size and frequency to meeting attendance to event participation to opening emails to visiting your web site and any other action that denotes higher levels of engagement.

The very best systems also allow the values to diminish over time knowing the importance of repeating them often.

The secret to improving donor retention with some form of engagement scoring is to make sure anytime a donor’s level of engagement drops relationship enhancing actions kick in!

If you’re currently in the market for new database software with expanded functionality such as engagement level tracking, check out the comprehensive nonprofit CRM guide here.

7. Generosity Level Tracking (Prospect Research)

The seventh and final function will impact both your donor retention and your organization’s overall fundraising results.

Generosity level tracking is similar to the donor engagement score in that it is a measurement based upon data and information readily available, but must be harvested and cleaned. In this case, it is a measurement of the philanthropic level exhibited by a donor and their capacity in wealth to give.

Such information should be a factor in all donor communication plans. Knowing capacity and previous philanthropic activity can provide justification for efforts beyond the norm for those key individuals who comprise 10% of the database, but contribute 90% of the dollars raised each year!

Summary

Now you are fully aware of seven technology functions, all of which can positively impact your organization’s donor retention rate. These functions do not have to all be implemented at the same time, but the sooner the better for the best possible results.

Best of luck navigating the nonprofit tech space to help your donor retention improve! When you bring these seven tech functions to fruition, you’ll be well on your way to success.