new donors trends by chuck longfield
DESCRIPTION
Fact-packed presentation from the 2013 DMA Washington Nonprofit Conference. Chuck is the Founder of Target Analytics and Chief Scientist at Blackbaud. Read the companion blog post at: http://www.event360.com/blog/identify-and-invest-in-your-most-passionate-supporters/TRANSCRIPT
02/07/2013 Customer & Market Insights 1
NEW DONOR TRENDS
Center of Philanthropy Symposium
November 2012
02/07/2013 Customer & Market Insights 2
DECLINE IN NEW DONOR ACQUISITION 2001-2010
Sector (# of organizations)
Total # New Donors 2001-2010
% Change New Donors/Year
2001-2007
% Change New Donors/Year
2007-2010
Advocacy (16) 6.6 million -9.5% 14.4%
Hospitals (23) 1.2 million 17.2% -0.4%
Cultural (16) 2.2 million 5% -2%
Environmental (37) 16.4 million -23.1% -11.0%
Health Research (30) 117 million 12.5% -14.8%
Human Services (36) 6.7 million 4.7% 2.5%
Colleges (34) * 350,000 -18.9%
* The % Change for colleges is for the period 2006-2011
SOURCE: TARGET ANALYTICS
02/07/2013 Customer & Market Insights 3
DECLINE IN FIRST YEAR RETENTION 2001-2010 Sector (# of organizations)
Retention Rate 2001
Retention Rate 2010
% Change 2001-2007
% Change 2007-2010
Advocacy (16) 34.0% 27.4% -19.5% 0.1%
Hospitals (23) 21.2% 18.1% -2.7% 0.6%
Cultural (16) 33.3% 26.8% -13.7% -6.5%
Environmental (37) 29.7% 24.0% -18.2% -1.4%
Health Research (30) 20.9% 19.3% -11.7% 0.4%
Human Services (36) 30.8% 26.3% -10.9% -4.2%
Colleges (34) * 30.8% 28.1% -8.8%
* The % Change for colleges is for the period 2006-2011
SOURCE: TARGET ANALYTICS
02/07/2013 Customer & Market Insights 4
• Acquisition is increasingly more expensive
• First year retention rates are declining
• Trends started prior to downturn and will likely continue after recovery
• Younger donors are less loyal than older donors
• Low ROI on new donor acquisition (and getting lower). - too costly to acquire new donors to replace lapsing donors
• WHAT CAN WE DO? !!!
SUMMARY OF CHALLENGES
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• View donors as valuable assets!
• When acquiring new donors, factor in whether you will retain the donor, and at what dollar level
• Fill the holes in your leaky bucket!
• Why did the donor give? Stop giving?
• According to Adrian Sargeant, Ph.D. from Indiana University’s Center on Philanthropy “A 10% increase in donor retention can increase the lifetime value of the donor database by up to 200% .”
EMPHASIZE DONOR RETENTION OVER ACQUISITION
02/07/2013 Customer & Market Insights 7
02/07/2013 Customer & Market Insights 8
• View donors as valuable assets!
• When acquiring new donors, factor in whether you will retain the donor, and at what dollar level
• Fill the holes in your leaky bucket!
• Why did the donor give? Stop giving?
• According to Adrian Sargeant, Ph.D. from Indiana University’s Center on Philanthropy “A 10% increase in donor retention can increase the lifetime value of the donor database by up to 200% .”
EMPHASIZE DONOR RETENTION OVER ACQUISITION
02/07/2013 Customer & Market Insights 9
02/07/2013 Customer & Market Insights 10
• View donors as valuable assets!
• When acquiring new donors, factor in whether you will retain the donor, and at what dollar level
• Fill the holes in your leaky bucket!
• Why did the donor give? Stop giving?
• According to Adrian Sargeant, Ph.D. from Indiana University’s Center on Philanthropy “A 10% increase in donor retention can increase the lifetime value of the donor database by up to 200% .”
EMPHASIZE DONOR RETENTION OVER ACQUISITION
02/07/2013 Customer & Market Insights 11
• Be willing to invest in your donors, e.g. thank you calls. See Donor-Centered Fundraising – Penelope Burk
• Determine a donor’s potential early in your relationship and allocate resources accordingly
• Be Donor-Centric, not Campaign-Centric
FOCUS ON LIFETIME VALUE, NOT RESPONSE RATES
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02/07/2013 Customer & Market Insights 13
• Set goals and measure your results
• Find peer groups and benchmark your results
• Checklist Manifesto, by Atul Gawande
• Identify best practices
• Find ways to collaborate to maximize results
FOCUS ON RESULTS, NOT EFFORT
02/07/2013 Customer & Market Insights 14
• Organize yourself to recognize a donor’s passion for your mission
• See yourself through the eyes of your donors
• Be willing to invest in your donors
• Test investments and track results carefully
INVEST IN YOUR MOST PASSIONATE SUPPORTERS
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02/07/2013 Customer & Market Insights 16
1. Emphasize donor retention over donor acquisition
2. Focus on a donor’s lifetime value, not a campaign’s response rate
3. Focus on results, not effort
4. Identify & invest in your most passionate supporters
KEY TAKE-AWAYS
02/07/2013 Customer & Market Insights 17
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02/07/2013 Customer & Market Insights 19
QUESTIONS?
Chuck Longfield, Chief Scientist