Donor Loyalty! The Holy Grail of Fundraising
21 May 2007 at 3:43 pm
A new US White Paper on donor retention considers the issues around what is perceived as the Holy Grail of fundraising – donor loyalty.
The White Paper Donor Trends Project is a collaboration of US researchers Craver, Mathews, Smith (CMS) and The Prime Group.
The discussion paper says that most organisations manage to cultivate multi-year donors, some with giving histories stretching back ten years or more.
However, the problem seems to centre on retaining those fickle first time donors – the ones you just spent, say, $50 to acquire (with a net loss of $25 or so).
It says today’s typical profile for charities and advocacy groups looks more like a 30% renewal rate for first time givers and an overall retention rate of 70-75%.
The discussion says that obviously this puts more stress on prospecting programs, which fall into a nasty cycle of chasing less and less valuable new donors who renew less.
The Paper says that the good news is that many donors claim to be – and maybe want to be – loyal. In its survey of American adults, 59% of respondents claimed "High Loyalty" to a cause or charity they support.
This loyalty to charities it says is competitive with loyalty to "my doctor" across all generations, and surpasses loyalty to sports teams, make of automobile, beer/soft drink brands, and telephone service providers, by way of comparison.
And not surprisingly, loyalty translates into dollars: 81% of $1000 a year donors (total giving to all organisations) say they are "highly loyal" to their favourite charities.
Professed loyalty increases with income and education, which in turn correlate with most valuable donors.
The research indicates that for many donors, some sort of ‘comfortability’ with, if not loyalty to, a charity does develop.
The data suggest that loyalty increases with age – it is most evident with Pre-Boomers, (born before 1946) who are the traditional donors for many organisations, while Post-Boomers (born after 1964) are significantly less likely to report such a "brand preference."
Some 73% of Pre-Boomers claimed to have donated to their favourite charities for more than two years in a row.
But the research brings up a more surprising donor loyalty figure!
Online donors are significantly more likely to show loyalty than offline donors.
Some 72% of online donors say they have contributed tho their favourite charity for more than two years in a row compared to 52% of off-line donors.
As well, as many as 53% of online donors say they have urged someone to make a contribution to a specific charity, cause or campaign compared to an average of 35% of all other types of donors.
Perhaps the question for Australian Not for Profits is ‘how well your online donation service being promoted?’