Donor Recognition: The Real Key to Retention

Ever since the economy began to bottom out five years ago, the focus of the nonprofit fundraising world has been on donor retention. That’s not to say retention was on the back burner in years and decades prior. It’s always been integral to fundraising success. But with acquisition budgets getting routinely slashed and competition for donors’ attention reaching all-time highs, retention seems to be the biggest focal point for fundraisers from organizations of all missions and sizes.

Yet, fundraisers continue to struggle with donor retention. In fact, one reference point that Bill Sayre, president of full-service direct-response marketing company Merkle Response Management Group, likes to point out is “according to Chuck Longfield, senior vice president and chief scientist at [nonprofit technology provider] Blackbaud, three out of every four donors stop donating at the end of their first year.”

So what’s a fundraising department to do? How can you reverse this trend and retain more donors to fill your housefile with loyal supporters?

“The simple truth is that donor acknowledgment and donor recognition is the key to retention,” Sayre says. “There have been a number of studies done and statistics on if you properly recognize/thank donors, your ability to retain them is greatly improved.”

If donor acknowledgment is the key to retention, what are the keys to donor acknowledgment and recognition?

Respect thy donor
The most important thing fundraisers can do to retain donors and acknowledge them appropriately is to respect them and their wishes. If you can’t do something as simple as communicate with them in the channels they prefer, how can you expect them to remain loyal donors — particularly when it’s so easy in this day and age to find another organization and cause to support?

“The first thing we emphasize is to make sure the nonprofit is respecting the channel choices of the donor,” Sayre says. “We all have the ability to do a traditional paper, printed thank-you, a thank-you call, an online thank-you. You have to make sure where the donor has stated a preference that you’re honoring that. The reality is that we still probably do most of our thank-yous via mail, but I think it’s going to continue to shift and there’ll be more of a presence moving forward online as the younger donor base ramps up.”

Another facet to respecting donors is providing a timely gift acknowledgment and thank-you message. Donors want to know that the organizations they donate to both receive their gifts and appreciate them — quickly.

“When a donor gives a donation and doesn’t receive a thank-you in a timely fashion, it can rub the donor the wrong way. And sometimes, if an organization doesn’t have timely acknowledgments, a donor may receive a solicitation before receiving a thank-you, which can really rub them the wrong way — being asked again before being thanked,” Sayre says.

Merkle promotes implementing a daily acknowledgment program to its clients and recommends waiting no more than three days to get those thank-you recognitions out.

Respect thy data
In this day and age, first name and last name personalization simply doesn’t cut it anymore. With so much data out there on donors and so much technology that allows fundraisers to track how donors came onto the file, how much they’ve given, what they’ve responded to, what prompted them to give, etc., it’s inexcusable for fundraisers to not use this data to recognize their donors.

“I encourage everybody to step back and take a fresh look at your donor acknowledgments because technology has changed in terms of data captured, information gleaned,” Sayre says. “No matter how good your program is going, take a fresh look on how you can use data to improve it.”

Thus, it makes sense to use donor data in the content of the acknowledgment and steer clear of the generic thank-you. As Sayre points out, fundraisers have the data on each campaign, on how much each donor gave and by which means.

That means fundraisers need to take a look at how they communicate in terms of messaging in acknowledgments. Does everyone get the same message? They shouldn’t. Each message should be customized for the donor, Sayre says.

“The more data embedded in the thank-you, the more personal and more direct link exists between the nonprofit and the donor,” he says. “If I donated to a campaign to help a specific country or illness, for example, reference that in the acknowledgment instead of just thanking me for my $20 gift.”

The more personal the acknowledgment, the more appreciated the donor feels — which greatly increases the likelihood of that donor remaining loyal.

Beyond just implementing data points into the body of the donor recognition communications, there’s the opportunity for fundraisers to get creative with other materials, specifically in direct mail. For instance, Sayre says, if the donor indicates via the data the nonprofit has previously captured that she prefers to donate to dog-related programs instead of cat-related programs, you could include an insert on the dog program into the acknowledgment. Or in e-communications, you could include a link to the new dog shelter being built, etc.

“Again, it comes back to honoring the donor’s wishes, not ignoring the note in your data,” Sayre says. “That’s something that is starting to become more of a trend as well — not just customizing the letter body, but what else can you include based on what you know about the donor.”

Surprise thy donor
Sayre has seen many Merkle clients run effective donor acknowledgment programs through several different channels. One, a very large, prominent nonprofit, has started doing outbound thank-you calls to a target list of its donors. These calls are strictly donor recognition calls, thanking donors for their gifts and loyalty, with no ask. Turns out, it has been a pleasant surprise to donors, many of whom have shared that they were stunned by getting a call from a nonprofit with no ask for money. It’s had a big impact with donors, having personal conversations simply to say thanks, which Sayre says is starting to slowly emerge as a best practice.

Another Merkle client has been extremely successful on the print and mail side of acknowledgments. Sayre says this client stands out because it pulls in lots of additional data points and includes that information in its donor acknowledgments to make the messages feel uber-personal. The messaging thanks donors for the specific campaign they donated to, emphasizes how that specific donation benefits that specific campaign and what that money is accomplishing. Basically, it’s about linking the message back to the end result and using the data on the donor to make it really evident how that donation made a difference.

Another organization Sayre points out is Operation Smile, which has really emphasized donor recognition the past four or five years. By putting donors at the forefront and recognizing them in timely, personal ways throughout all its messaging, the organization has become one of the largest and most successful nonprofits out there. Operation Smile utilizes all the best practices in its acknowledgment program, ranging from anniversary messages to timely gift acknowledgments to loyalty upgrade communications.

The future of recognition
While there is so much fundraisers can already do with the technology and data available to them to recognize donors, the future holds even more promise for more personal communications. Merkle, for instance, has started to test capturing what Sayre calls micro data at the donor level to provide to its nonprofit clients for use in acknowledgments. For example, many nonprofits include a business reply envelope with postage paid in their direct-mail appeals. It’s typical for some donors to apply a stamp anyway as a way to give extra money to the nonprofit, since it then gets a refund on the postage. So Merkle has started tracking anytime it detects a donor has applied a stamp, setting a specific code, which allows its clients to immediately incorporate that into the acknowledgment, thanking the donor for providing his or her own postage.

“Obviously these donors are passionate about the organization. By putting a stamp on the return envelope, it’s saving the nonprofit money,” Sayre says. “We’re tracking if the behavior is different for those donors who do that. We’re capturing even more data to help in retention and enhancing the acknowledgment.”

While Merkle is in the early stages of this micro data model, it has seen immediate impact already for its test clients and plans to roll it out further in the near future.

The key to a truly successful donor-recognition program is to use as much information as possible about the donor to let him or her know how much you appreciate and value the relationship. The more personal and targeted you get, the more likely that donor is to stick around.

As Sayre says, donor recognition is the biggest key to retention … so make sure you are doing everything you can to have the best, most timely donor acknowledgment program you possibly can.