Fundamentals of Donor Retention

Donor-retention programs are designed to keep supporters engaged annually, and they can be one of the most effective strategies to improve donor lifetime value. The better you can retain donors, the more you can cultivate them and develop deep, meaningful relationships with them. The ultimate goal is to grow the donor file with the most loyal and long-term donors.

In the session “Fundamentals of Retention — The Types of Programs & Associated Creative Offerings to Effectively Retain Donors” at the DMA Nonprofit Federation’s 2011 Washington Nonprofit Conference last month, three fundraising professionals tackled donor retention. Amanda Clayton, integrated marketing manager at Doctors Without Borders; Jennifer Jones, director of direct-response marketing at CARE; and Jim Emlet, co-founder and principal at Integral, discussed basics of donor retention and shared donor-retention case studies.

Let donors decide
“Understand the messages that resonate the most with your donors,” Emlet said. “Look at an anniversary-based series versus a calendar-based series, and determine which approach is more productive for you.”

Anniversary-based approaches tend to provide cash-flow consistency, Emlet said, but calendar-based approaches may be easier to implement. It’s all about knowing your donors and understanding the messages that resonate most with them. Some organizations have multiple renewal and retention series, including low-dollar, high-dollar, anniversary and calendar series. The key is to let your donors decide, Emlet said.

How? Testing.

In mid-2008, renewal revenue from a client’s traditional series to renew a magazine membership began to decline. Some of the results were attributed to expanding into new markets, but Integral and the client realized that the most dedicated donors weren’t renewing at their previous levels. So in January 2009, they created a second series with a more mission-based message, moving away from language focused mostly on magazine renewal.

The new series was an immediate success and stabilized retention. In year two, it surpassed the performance of the traditional series. But instead of ditching the old series, both approaches continued to be refined (and still continue to be refined), as each resonated with different audiences, Emlet said.

“It wasn’t an all-or-nothing approach,” he said. “We tested each one every other month.”

Response form the most valuable supporters — the five-year plus group — responded much more favorably to the new, shorter series. This was counterintuitive to what Integral and its client thought — they expected the new series to resonate more with newer donors. As it turned out, new members continued to be more receptive to the traditional approach.

“Since both are viable, we still use both,” Emlet said. “New members get the traditional series, and five-year plus donors get the new one.”

Second-gift conversion series
“One of the most important things is how quickly you can get donors to give that second gift,” Jones said. “The quicker they give that second gift, the more valuable they’ll be.”

With that in mind, CARE implemented a second-gift conversion series in its donor-retention program. The objective was to solicit and receive an additional gift from a new donor as quickly as possible. The series went as follows:

• New donors receive a “special” series after they join.
• The series lasts approximately 6-8 weeks.
• The series includes an ask into the monthly donor program, Partners for Change.
• Non-monthly donors begin receiving the existing tried-and-true mailstream.
• Results yielded a lift in new donor conversion of 16 percent.

When new donors join, CARE sends an acknowledgment and welcome mailing that includes a thank-you on the outer envelope, acknowledgment letter, receipt and an immediate ask for another gift. The ask is done in a friendly way, saying if you’d like to make a second gift, that would be wonderful. “It’s a good first point to ask for the next gift,” Jones said.

A buckslip appeal is also included that informs recipients about the organization beyond feeding children. CARE created a special version of its World Report newsletter that tells new donors about other projects CARE is involved in and what they do.

CARE then sends a communication preference postcard a week later, allowing donors to inform the organization how they would like to communicate with it. There is a thank-you on the outer envelope of the postcard, a letter from the president about how CARE uses donated money wisely, and the opportunity for donors to say how they want to hear from CARE and how often.

“Very few send in the postcard, but it lets them know we let them have a say and we care about them,” Jones said.

There is no ask on the postcard. It’s more of an engagement piece to help build the relationship with the new donor.

The next mailing in the series is the child survival appeal, the top-performing appeal for CARE. It asks donors to give that second (or third) gift right up front, beginning on the outer envelope and continuing inside. It highlights how giving leads to feeding the hungry, taking a more functional tone — describing how gifts are used, providing a matching-gift element, personalization, etc.

The key copy, Jones said, is the paragraph that states, “As someone who’s so recently been generous and given, you understand why we have a need.”

CARE follows that up with a monthly-giving invitation mailing, asking new donors to become monthly donors. The focus is on getting donors to join the Partners for Change monthly-giving program. It does have a one-time gift ask, but it’s something recipients have to hunt for, Jones said.

The monthly giving invite is a higher-end brochure. The same time it hits, CARE calls those donors it has phone numbers for, and it’s also sent to e-mail donors in an e-mail appeal.

“We have a planned-out series,” Jones said. “Donors get thanked two times, asking them throughout for that next gift, sending appeals with the same message that brought them to CARE, and asking them to become monthly donors.”

Since it was implemented, donor retention has risen 16 percent.

Doctors Without Borders
Doctors Without Borders’ renewal program uses direct mail, e-mail and telemarketing throughout the year — 12 issue-focused direct-mail messages go out annually, up to 15 e-mail solicitations per year and approximately two phone calls per year, Clayton said.

Every month, 12- to 13-month and 24- to 25-month lapsed donors receive an invoice-like package. Doctors Without Borders tested an anniversary message against the issue-focused renewal that the 0- to 12-month donors receive in the same month. In both cases, the donor-confirmation anniversary package won, suggesting that there is room for more anniversary messages in the renewal program — something Doctors Without Borders plans to test more than once to make sure it’s seeing a real trend.

Through testing, Doctors Without Borders concluded that package refinements may improve overall net while the message keeps donors engaged, testing things like package size, postage treatment and bulk orders/gang printing. Clayton noted that Doctors Without Borders will save more than $75,000 on the renewal package alone in 2011 thanks to testing a new format and taking advantage of gang-printing savings.

President’s Circle
CARE was starting to see its high-value donor file shrink in 2009. From 2008 to 2009, the $500-plus donor file decreased by 17 percent and $500-plus donor revenue decreased by 20 percent. And it continued to decline in 2010.

“That [set off] a few alarm bells,” Jones said. “How do we keep them engaged?”

So CARE took a look at its midlevel donors to find ways to retain them and cultivate them for the highest lifetime value. What it found was that of all midlevel donors, mail-responsive donors contributed 67 percent of total revenue, and while the average gift of non-mail donors was three times more, direct-mail donors gave six times more throughout the year.

“This is a group we want to keep engaged and involved, and they seem responsive to mail,” Jones said. So the CARE team developed a mail program targeted at midlevel direct-mail donors called the President’s Circle.

The program objectives were to:

• Increase retention of donors giving at the $1,000-plus level.
• Increase the number of $1,000-plus donors.
• More aggressively reactivate lapsed midlevel donors.
• Provide a bridge between traditional direct response and high-level, one-to-one cultivation.

So CARE developed a two-pronged approach: a welcome package and an invitation package. The welcome package was mailed to 0- to 24-month donors who had given $1,000 or more. It acknowledged the donor as a member of the President’s Circle, introduced the benefits of membership and provided an opportunity to make a gift. The invitation package was mailed to 0- to 24-month donors who had given $500-$999 and 25- to 36-month donors who had given a single gift of $1,000-$4,999. It invited the donor to become a member of the President’s Circle — must make a single gift of $1,000-plus to join — and introduced the benefits of membership.

The launch package was versioned for each audience. One was a welcome theme, the other an invitation theme. In both instances, it was an oversized 9-inch-by-12-inch, high-end, personalized appeal that included: a letter from the president of CARE, a certificate of appreciation — which donors love, Jones said — the CARE logo and the President’s Circle logo. A follow-up was sent later, another high-end, cost-effective, automated direct mailer.

The language highlighted the benefits:

• Access to Dr. Helene Gayle, CARE’s president and CEO, and other key leaders.
• Exclusive “insider”/mission-centered information.
• Convey status as true investors in CARE’s mission.
• Deeper look at different CARE programs.
• Create a closer, more personalized connection with CARE.

“We were going for a more personal feel, not necessarily gifts,” Jones said. “We wanted to make them fee like and let them know they’re making a difference as an important part of CARE.”

CARE is monitoring the President’s Circle closely in 2011. The communication plan this year includes a multichannel approach, with all donor touches referencing the donor’s membership in the President’s Circle. It plans to analyze the program quarterly and annually at a minimum, focusing on ongoing identification of messages that resonate with donors and gauging donor-engagement levels.

To date, donors who were welcomed continue to give at their same giving levels, while average gifts for donors who were invited is 7 percent higher than the same period the year before. Also, the number of midlevel donors has increased 15 percent, and revenue has increased 12 percent.

“It’s been tremendously successful,” Jones said. “It’s going back to the basics of retention. Treat them the way that you want them to give, and that’s what they’ll do.”