Top on every nonprofit’s wish list is committed donors that make for repeat donors. However, to the dismay of most nonprofit organizations, statistically only 30% of first-time donors continue to support a nonprofit on an ongoing basis. Nothing is more costly to a nonprofit’s efforts to build a reliable pool of loyal donors than one-time donors. Nonprofit organizations with a good track record in fundraising recognize the importance of cultivating engaged donors.
Donor engagement strategies that ensures donor retention requires data and analytic systems to enable the nonprofit to routinely assess donor management in terms of effectiveness and retention. The successful nonprofits have developed the critical know-how to move beyond the donor management to create lasting donor relationships on a scale.
To bring about donor engagement, fundraising has to be viewed as a process, not a one-time event. One cycle should lead to the next. Ideally, one cycle should ignite the next, thus consistently expanding the nonprofit’s donor base while strategically building the organization’s internal capabilities. Immediately after a successful fundraising event [whether it is a gala dinner and/or an auction], is the time to kick your outreach efforts into higher gear to capitalize on your success and strive for improved ROI.
What exactly does that imply for a nonprofit organization’s senior management? It means focus on efficiency and improved processes. It means systematizing internal processes. It means waking up knowing your priorities because capitalizing on post-fundraising success is a great problem for a nonprofit organization to have. Even more important is devising ways to reach out to the new donors you successfully attracted to your last fundraising event. Regardless of the specifics of the fundraising activity, the organization’s primary goal should always be to generate revenue through the existing donor base and to attract new donors.
We now live in an era of new nonprofit organizations popping up all the time—some dedicated to unique/obscure causes. Operating in this competitive area makes donor retention even more vital to the long-term wellbeing of the nonprofit. Donor retention has become the single most challenging task for many nonprofits. As stated earlier, statistically 70% of donors are just one-time donors. The challenge is to convert that high percentage into engaged and repeat donors.
Successful nonprofit organizations recognize the importance of good engagement, with an emphasis on donors’ financial resources. Effective management of your donors is just as important to successful management of the funds those donors provide. Optimal donor engagement should include data and analytic systems to routinely assess donor management in terms of effectiveness and retention. A strong and comprehensive strategic plan should be flexible enough to rapidly respond to changes in donor data, whether those trends are driven by internal or external forces.
In summary, a nonprofit doesn’t just need a fundraising plan, it needs an “engagement plan.” An engagement plan not only helps the nonprofit to understand its donor needs, it will also help to distribute the work to effectively bring each closer to the organization’s mission. A manifestation of a donor-centric culture is when everyone including the board of directors is actively involved in donor engagement—which is the key to continued success.
Your Great Event provides consulting services to nonprofit organization on a wide range of issues including developing effective donor management strategies.