29 Tips for Gaining and Retaining a Donor Base

In a Forum for Fundraising webinar last month, Pat Rich, principal at EMD Consulting Group, outlined 29 recommendations for how organizations can gain donors and retain their donor bases, touching on everything from planning your program and acquisition and renewal strategies, to upgrading current members and creating member surveys.

According to Rich, the structure of a development effort for a membership program has three main components: methods to acquire donors with benefits, a program to retain donors, and efforts to move members into donor clubs and major giving.

When deciding whether or not to have a membership program for your organization, Rich suggested asking and answering the following questions:

• How would a membership program support our mission?
• Why do we need and want members?
• Do we have tangible benefits that make sense and correspond to the dues we are asking?
• Are we able to distribute and provide the benefits in a timely manner?
• Are we able to solicit members during the year for other projects if necessary?
• Are we able to provide member service?
• Do we have a consistent communications program?
• Are there activities or programs that we can provide?
• Do we offer recognition for members (membership cards, for example)?
• Do we have the human and financial resources to keep the membership program going?

Her 29 tips for gaining and retaining a donor base are:

Plan your program
1. Know the purpose. Are you trying to build a constituency, gain active participation, attract volunteers, strengthen relationships, promote interest in a subject area, gain social ties or increase income?

2. Create a plan. What is the purpose of the program? What are its goals, i.e., the major ends to be accomplished? Define objectives: tasks that are measurable have a time frame and are assigned responsibility. Create action plans: What are the steps for accomplishing the objective leading to accomplishing the goal?

3. Integrate with fundraising. Is membership separate (flat dues) or integrated (graduated dues)? “Value” members are those who come in at the entry membership level. “Support” members are those who give above and beyond the membership fees, and organizations often create special donor clubs for these members.

Other fundraising requests that you can let members know about are matching gifts, gift memberships, tributes, capital campaigns, planned giving, special events, special projects, products and facility rental.

4. Keep flawless records of your donor base. This will help you defend against attrition, a big problem with organizations. Rich said that according to AFP research, essentially for every $5 an organization raises in new gifts, about $5 is lost to attrition.

She said some factors that influence member commitment to an organization are service quality, shared beliefs, personal links to the organization, trust, risk and learning.

The membership program:
5. Benefits. Offer a simple, clear benefits package related to the member, programs or on-site visitation if you have a facility. For a value member, the benefits are an exchange. For support members, the benefits are valuable as well, but usually not the reason they join at the higher amount.

Examples of types of benefits are:

• Member-related — a membership card, decal, bumper sticker or lapel pin; recognition on a wall or in a book; dinners and receptions; discounts in your shop, catalog or online; gift certificates; and logo merchandise.
• Program-related — members-only events; lectures, talks and film programs; meetings with director, curator or a scientist; travel opportunities; reciprocal admission; publications; and a members-only section on your Web site.
• Visitation-related — free or discounted admission; members' line to enter; access during nonpublic hours; guest passes (free or discounted); facility rental; members room; and audio tours (free or discounted).

Other benefits could be frequent-flier miles, discounted magazine subscriptions and discounted hotel/motel/car rental rates (alumni organizations often offer this type of benefit).

6. Service. Strive to provide exemplary service to members. When a person joins, process her contribution in a timely manner and send out a thank-you and welcome package as quickly as possible. Designate a person at your organization who members can talk to if they have questions. And at the institution, treat members like family.

"The whole point of membership," Rich said, "is to make the members feel like they're part of your organization."

7. Activities. Be creative and interesting. More people drop their memberships after the first year than if they've been long-term members. Therefore, do something special to make sure first-year members will want to renew their memberships.

8. Communications. You can't communicate with members too often, Rich said, recommending putting yourself on your member list so you can receive all of the communications your members are receiving. Save each one — whether direct mail or e-mail — date them and then lay them all out and see how it looks. This is what members are seeing. Over the course of a year, Rich recommended sending one to four renewal notices, four to 15 invitations, two to four fundraising appeals, four to 12 newsletters/bulletins, as well as the annual report and a couple of surveys.

9. Recognition. Send members a thank-you letter, call them on the phone or visit them; list their names in your newsletter (as the list becomes longer, just list upper-level members), annual report or recognition wall; and send them membership cards with their names on them.

Strategy (which of these will you focus on?)
10. Increase numbers. Why? Do you want to increase numbers for greater advocacy power, to increase your donor pool, to appear stronger as an organization or to serve the community better?

Three ways to increase membership: emphasize acquisition, increase the overall renewal rate and increase first-year renewal rate. Rich said if you can increase the first-year renewal rate, your overall renewal rate will go up.

11. Increase income. Some ways to do this are increasing dues; changing the dues structure (e.g., moving your lowest level up $5 or $10); adding/keeping more members; adding an upgrade program (ask people who have been members for a few years if they'd like to upgrade their membership levels); forming a committee (volunteers?) to solicit for support members; and cut costs.

12. Stability. You may want to do this if there are issues with your service or you have limited resources. To increase your stability, Rich recommends continuing acquisition and renewal efforts. For acquisition, define who you are targeting and use of a mix of methods, including on-site efforts, activities, gift memberships and direct mail.

Acquisition
13. Target. When trying to decide who to target, look for "clones" of your current members, Rich said — but not all members. She recommended focusing on the characteristics of long-time members (three to five years) and donor-club-level members.

Create a donor profile by doing a survey of long-time members. Offer donors something — a coupon, for example — for filling it out. You can do the survey online, but Rich said those that complete the survey then might not be an accurate representation of your donor pool.

After forming a profile of the donors you'd like to target, look for prospective members with a demonstrated interest in your cause, an understanding of who you are and disposable income ($50 is a traditional entry-level donation to a membership organization).

14. On-site acquisition (if you have a facility). This can be driven by volunteers (least effective, but costs the least), staff (effective when able to devote the time) or sales professionals (do the best, but cost the most). Determine what group works best for your organization. But no matter who you choose, Rich said, they should be trained.

On-site acquisition can occur at the front desk, reception area, during events, in your store or in the development/membership office.

15. Activities for acquisition efforts. This can be a membership month, where your organization pulls out all of the stops and does everything it can to get new members; employee contest to challenge employees to get the most new members; member-get-a-member contests where the member who brings in the most new members gets a prize; personal solicitation; brochure distribution; online promotions; charter membership; and through advertising, though Rich said this can be expensive.

16. Gift memberships for acquisition. Rich advised picking times for offering gift memberships that make sense for your organization. Some common times for these offers are holidays, Mother's Day/Father's Day, Valentine's Day and graduation.

Direct mail
The most important element to direct-mail success is your list (accounts for 60 percent of your success), i.e., sending it to the right person, Rich said. Also important is the offer (30 percent) and the creative execution (10 percent). Test it, track it and analyze it.

17. List. Will you exchange or purchase a list? Know where the names you're mailing came from, and remember to dedupe and test so you know which lists work and which don't.

18. Offer. What are the benefits you're giving to the person who joins? Rich said to test incentives and premiums to see which ones work better than others. Offer different benefits and incentives for different membership levels. Rich suggested making a grid that shows that at a membership at one level gets x and a membership at another level gets x and y. Don't forget to talk about the wonderful work the organization is doing.

19. Creative execution. The four components of direct mail are a carrier envelope, reply envelope, letter and reply device. For each element, test the format, themes and copy, and postage.

Renewals
This is the most important part of the membership/donor process, Rich said. Member acquisition costs money, but renewals are where the money's at. Rich said that if an organization can increase the level of retention by 10 percent it will increase the revenue it generates by 50 percent, as the effect compounds over time.

"Small increases lead to substantially more members in the future," she noted, suggesting renewing members via the same channels through which they joined.

20. Renewal schedule. Stick to your renewal schedule, Rich said. She recommended renewing based on each person's anniversary as a member, so if someone joins in March 2009 they are renewed in March of 2010, rather than renewing every member at the same time.

Send your first renewal letter 30 to 45 days prior to the membership expiration date, a second letter during the renewal month and a third letter 30 to 45 days after the membership expires.

21. Lapsed members. Rich recommended mailing or calling lapsed members at least twice a year. Mailing lapsed members can result in a higher rate of return than for acquisition. After three years lapsed, move the name to a prospect list.

22. Dues levels. "When renewing, list the dues level for the member and levels that are higher," Rich said. "Do not list dues levels that are lower than the current one."

23. Telemarketing. This can be used for customer service (to get back to members if they have questions); thank-yous (trained volunteers can do this); to do a survey (should be professionally written and tested); to invite members to participate in an event; and for lapsed-member campaigns and renewals (if you want feedback on why someone isn't renewing).

Rich said organizations might want to have someone call new members three months after they join and then nine months after they join to check in on them.

Upgrades
For members who have been with you for two to three years or longer, Rich said to suggest that they upgrade their membership levels.

24. Suggest an upgrade in the P.S. of renewal letters to these donors.

25. Allow upgrades with matching gifts. Include a line on the response device about a matching gift. If someone gives a gift that is matched, Rich recommended giving that donor a membership at the matched-gift level.

26. Send an upgrade mailing to these donors once a year. Test using an incentive or premium.

27. Membership surveys. Organizations should do membership surveys every three years so they know who their members are, what they do, what they like, etc., Rich said. Some methods for doing surveys include:

• Mail — reaches all people, but whether they open it is unclear. Rich recommended putting "Survey" on the outer envelope to increase the open rate.
• Phone — engaging.
• Exit — if you have a facility or after events.
• Focus groups — these are great if you want to test things.

Membership surveys should seek to find out if members like the benefits you offer; what kinds of activities they're interested in you doing; what radio stations they listen to, TV shows they watch and magazines they read; and their demographics (age, gender, ZIP, income).

Member segments to survey are all current members, lapsed members (to see why they didn't renew), visiting members and long-time members.

Two things she noted: Don't put the survey in your newsletter; make it a separate item. And have a deadline for response.

28. Use the Internet. The Internet should be an additional channel to an organization's marketing mix, not a substitution, Rich said. It can be used for acquisition and renewal via e-mail communications, an online newsletter and event registration. Rich also suggested creating members-only Web pages such as chats, "ask the experts" and a calendar of events.

Social-networking pages also can be used to enhance an organization's communications, but Rich said they shouldn't be the only communications you send out.

29. Make your members feel like family. Above all, said Rich, remember that "fundraising is about relationships."

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