This is a guest blog and is posted with permission from Cynthia Bergvall.
A local nonprofit was stuck. Their donations had plateaued. The donor software provided them with a lot of information, but it was overwhelming. Where to start? The Executive Director, Finance Manager, and Development Director sat down to brainstorm what this would mean for the organization, and what they could do to address the situation. They came up with three key questions which they felt were critical to answer prior to devising a solution: Why did donations plateau? Where were their current
donations coming from? What led donors to either increase or decrease their gifts?
They started by looking at the donor retention rate over the past five years. The donor retention rate was calculated by dividing the number of returning donors by the total number of donors. What they found surprised them. In the last two years, the retention rate had dropped. This helped explain why the total donation amounts had been the same despite bringing on new donors.
They then looked deeper at donors who either gave more or less year to year. While in some cases they did not know why donor behavior changed, they were able to come up with several possible reasons: a successful fundraiser one year around a compelling need, additional contact with some key donors, and the close relationships between certain donors and board members. The team felt these scenarios gave them strong clues as to what was happening.
Armed with this additional knowledge, the Development Director was able to draft a plan that included thank-you phone calls from board members to donors who gave more than $500; boosting Facebook posts which clearly identified a specific need (as opposed to a general ask); and increasing donor touch points overall. To measure her progress, she set quarterly goals for each action item.
After the first quarter, the team wasn’t sure if their efforts would prove successful, however there were several anecdotal stories which convinced them to stay the course. In the second quarter, they compared the donor retention rate to the same point a year ago. The retention rate had increased by 5%. Encouraged, the team ramped up their action plan and increased engagement for quarters 3 and 4. After one year, the nonprofit saw donor retention stabilize, as well as an overall increase of 3% in
donations. With the positive results came a renewed enthusiasm from the team.
This story is a fictionalized version of some real life experiences; however it illustrates an important point—using data helps you to understand and improve your processes. Data assists in clarifying which actions are producing the desired results, as well as which actions are not successful. This information serves to align the efforts of your team, empowering them toward success. It is not always an exact science and may involve adjustments along the way, but knowledge is power, and the more knowledgeable we are, the more efficient we become.