Strategies for Renewing First Time Donor Support

Strategies for
Renewing First
Time Donor
Support

TODAY’S PRESENTER

Cynthia J. Armour
Certified FundRaising Executive
Elderstone.ca

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WHAT IS CANADAHELPS?
• A public charitable foundation and registered charity
• Through CanadaHelps.org, anyone can donate to any
registered Canadian charity online
• We have facilitated over $390 million in charitable
donations online since our launch in 2000
• 14,500 charities use us to collect donations and fundraise
online
• Over 850,000 Canadians have donated through
CanadaHelps
• For donors, CanadaHelps is a one-stop-shop for giving. For
charities, CanadaHelps is an online fundraising solution
that is affordable, easy and secure

WELCOME TO GIVING MADE SIMPLE!

Cynthia J. Armour, CFRE
Elderstone Resource Development
www.elderstone.ca 705-799-0636

Canada Helps Webinar – March 5, 2014



Making a case for donor relations in the quest to
renew first-time supporters

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Introducing key terms you need to know



Defining the value of relationship building



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Identifying steps to a strong donor relations
program
Providing names and sources for more information
© Cynthia J. Armour, CFRE www.elderstone.ca 705-799-0636

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Your charity has not acquired a donor until
they make their second or third gift
Disaster relief often equals one-time
donations
“December Donors”

First-time donor super credit benefits donors
who‟ve never supported charities before

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Every $100 gained for 2011 was matched by
$100 in losses through attrition
Every 100 donors gained in 2011, 107 we
lost through attrition
Organizations raising $100,000 or less lost
$110 for every $100 they raised


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Slight improvements from the previous year
Every $100 gained in 2012 was offset by $96
in losses through gift attrition
Every 100 donors gained in 2012 was offset
by 105 lost donors through attrition


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BUT – organizations raising under $100,000
had an average net loss of -13.5% (which
means $113.50 was lost for every $100
raised)

The greatest losses in gift dollars came from
lapsed new gifts, particularly in the
organizations with lowest and highest growth
in giving ratios (the net of gains in giving
minus losses in giving).
© Cynthia J. Armour, CFRE www.elderstone.ca 705-799-0636 9



“It usually costs less to retain and motivate
an existing donor than to attract a new one
For most organizations – and especially
those that are sustaining losses or
achieving only modest net gains in gifts and
donors – taking positive steps to reduce gift
and donor losses is the least expensive
strategy for increasing net fundraising
gains.”
Source: AFP 2012 Fundraising Effectiveness Project




Direct mail acquisition

$1.25 to $1.50 per $1.00 raised



Direct mail renewal

$0.20 to $0.25 per $1.00 raised

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Benefit/Special events

$0.50 per $1.00 raised (gross to net)

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Membership associations

$0.20 to $0.30 per $1.00 raised

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Donor clubs

$0.20 to $0.30 per $1.00 raised

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Planned Giving

$0.20 to $0.30 per $1.00 raised

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Corporations

$0.20 per $1.00 raised

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Foundations

$0.20 per $1.00 raised

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Volunteer-led solicitations

$0.10 to $0.20 per $1.00 raised

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Special projects

$0.10 to $0.20 per $1.00 raised



Capital campaigns

$0.10 to $0.20 per $1.00 raised

© Cynthia J. Armour, CFRE
www.elderstone.ca - 705-7990636

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Donor Acquisition
 Donor Attrition
 Donor Conversion


(and we‟re not talking
about organ-transplants)

Donor Lifetime Value
 Donor Loyalty
 Donor Relations



Donor Renewal
 Donor Retention
 Donor Response Rates
 Donor Segmentation
 Lapsed Donors
 Multi-channel Giving, Stewardship



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

At the heart of fundraising is the art of
relationship building – the mutual creation of
that intersection between the organization‟s
mission and the donor‟s philanthropic vision.
Strong relationships with donors don‟t just
happen; they require careful attention not only
to donors themselves but also to fundraising
fundamentals that are grounded in ethical
practice.


Canadians continue to place great importance on the
information charities provide to the public.


98% think it is important (very or somewhat) for
charities to provide information on how they use
donations



98% want information about the programs and
services the charities deliver



97% want information about charities‟ fundraising
costs and



96% want information about the impact of
charities‟ work on Canadians

Source: Talking About Charities 2008 - Canadians‟ Opinions On Charities And Issues Affecting Charities,
The Muttart Foundation


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Canadians continue to give charities low ratings for
the degree to which they report on how donations
are used, the impact of programs and charities‟
fundraising costs
Of significance, there have been significant drops
in the trust levels of some types of charities since
the study was last conducted in 2008. International
development agencies dropped 9% from the
previous study, while churches dropped 7% and
environmental charities 5%.


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

Studies indicate that finding new donors and
dollars is on the decline

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There are fewer new donors

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Retention of first-year and multi-year donors is
falling

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Recruiting new donors can cost up to 10 times
more than retaining existing ones!
Source: Mutual Appreciation – Advancing Philanthropy – Jan/Feb 2009

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“A 10% increase in donor retention can increase
the lifetime value of the donor database by up
to 200 percent. When people stay around, they
do things like upgrade their gifts, contribute to
galas and even volunteer. All those things, you
can put a dollar value on.”
Source: Adrian Sargeant, Ph.D., Hartsook Chair in Fundraising and Professor of
Philanthropic Studies at Indiana University‟s Center on Philanthropy


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

Satisfaction
Trust
Commitment

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Each little interaction builds loyalty





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“The best prospective donor is the
donor who has supported your
organization in the past.”
Edith Falk, Campbell & Campbell



Linkage, Ability and Interest = a
warm prospect vs. a cold suspect


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 Location

is to real estate
as relationship is to
philanthropy.
Source: Effective Donor Relations – Janet L Hedrick


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

Acknowledgement – the process of saying
thank you for the gift



Recognition – the process of publicly
recognizing the gift

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Stewardship – the process of using the gift as
the donor intended and communicating with
the donor about the use of the gift


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Effective donor relations is an organizational
philosophy, advocated by decision-makers
and practiced by everyone.

Measurable results can only be provided if
the CEO and the Board have a strategic plan
in place, with time-limited and specific
objectives against which results can be
measured.


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

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Communications – meaningful, 2-way
Frequency and face-to-face interaction
increases as the relationship grows
Involvement or engagement – in the life of the
organization, treated as a member of the
family, donor will talk about the organization
using the term we rather than you
Source: Janet L. Hedrick


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Gift acceptance and management

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Acknowledgement

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Donor recognition and appreciation

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Stewardship – accountability and reporting

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Ask again and repeat the process


25

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A positive emotion or attitude

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Meaningful, thoughtful and individualized

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Unified strategy for the donor


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

93% would definitely or probably give again

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64% would give more

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74% would continue to give indefinitely

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70% of donors would increase the overall value
of their philanthropy if charities were more
effective at acknowledging their gifts and
communicating results
Source: Donor-Centered Fundraising – Penelope Burk


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

For already acquired donors, the things that
influence their decision to give or not give
again happen in the space between
solicitations, not at the point of asking for a
gift. That is why so many donors say that,
once acquired, meaningful acknowledgement
and measurable information become the ask;
solicitation is merely the convenient point in
time to offer the already-determined „yes‟ or
„no‟.


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Customer-service focus means entire staff,
board and volunteers are part of the donor
relations team! (= Culture of Philanthropy)

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Prompt thank you and receipting

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Ensures gifts are used for intended purpose

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Funds are tracked - accountability in action


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Implies a burden of trust
Timely and appropriate reporting to donors on
use of funds
Involves and engages donor in the charity‟s work
Builds understanding of the need and provides
solutions for donor to help
Recognition reflects the gift-size

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Benefits are not costly or extravagant
Shared responsibility between charity and
donor
A functional database and trained staff who
can mine the information
The board complies with the Income Tax Act
and reports to CRA to maintain charitable
status

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Start with the board creating, approving and
adopting a stewardship policy

Form a stewardship planning task force
involving board members, other volunteers, a
development or administrative staff member,
and some donors
Analyze the donor base where gifts cluster and
establish four or five preliminary (test) giving
recognition levels
Source: Beyond Fundraising, Kay Sprinkel Grace



33

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People will give more to a cause as they
become more involved and committed
Staff will be more effective based on their
involvement and commitment


34



Fund development committee conducts donor
analysis (recommended twice a year):
◦ How many donors do you have?
◦ What levels do they give?

◦ How frequently do they donate?
◦ Who are they?






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The board is expected to be involved in donor
relations
The board needs to approve the donor
relations plan
The board adopts a donor relations policy
including who signs thank you letters and
makes thank you phone calls to donors,
budgets, etc.



Comprehensive database is essential to track:
◦ Number of repeat donors and WHO they are
◦ Number and value of increased gifts and WHO made
them
◦ Event attendance
◦ First-time donors
◦ Newly engaged donors


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Create a budget for donor relations that
includes, postage, printing and donorfocused events (which may include one-toone meeting/meal with a major gift prospect)
Ensure stewardship activities are in line with
the budget, amount of the gift and image of
the agency

Determine what (if any) kind of involvement
your top donors want



Use current donors to convey the agency‟s
message to potential donors

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Determine how to tie donor relations to the
organization‟s mission

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Focus on the intangible benefits that turn
donors into investors

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Continue to maintain stewardship with longterm and major donors even if they lapse

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Establish relationships between donors and
the stewardship staff
Keep all donors on the database unless they
ask to be removed
Create giving levels with (cost-effective)
benefits


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

Consider using the following mediums for
effective outreach:
◦ Marketing and print materials
◦ Mailings (annual fund)
◦ Phone calls (personal phone calls from board
members)
◦ Interim progress report (donor communications)


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Begin by recruiting the “right” donors



Thank promptly

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Welcome them

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Invite more information



Demonstrate how their gift makes a
difference

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BEFORE YOU




Request a personalized renewal within six
months of their first gift

The timeliness, relevance and quality
of the first gift acknowledgement is a
vital driver to donor conversion and
ultimate retention.

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
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My Charity Village Fundraising Q & A archives
http://www.charityvillage.com (search Cynthia
Armour under Articles)
Tony Poderis: Building Donor Loyalty http://www.raisefunds.com/012703forum.html
Association of Donor Relations Professionals
(www.adrp.net)
Public Broadcasting Major Giving Initiative http://majorgivingnow.org/index.html


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- Muttart Foundation Talking About Charities



http://www.muttart.org/surveys



http://www.imaginecanada.ca/files/www/en/supercredit/first-

- First Time
Donor Super Credit explained
time_donors_super_credit_explained.pdf



2013 AFP – Fundraising Effectiveness Survey
Report

http://www.afpnet.org/files/ContentDocuments/FEP2013FinalRepor
t.pdf


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Sample Stewardship Policies –
 http://www.externalaffairs.uga.edu/policies/nodes/compl
ete/335
 http://majorgivingnow.org/downloads/pdf/KCET_Steward
ship.pdf
 http://majorgivingnow.org/downloads/pdf/UU_Stewardshi
p.pdf
 http://www.arrowleadership.org/alpages/invest/investme
nt-reports/stewardship.shtml
Sample Thank You Script
 http://majorgivingnow.org/downloads/pdf/OPB_Thank_M
ember_Script.pdf


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Grace, Kay Sprinkel: Beyond Fundraising (John Wiley & Sons, Inc.
1997)
Burk, Penelope: Thanks! A Guide to Donor-Centred Fundraising
(Burk & Associates Ltd. 2000)
Rosso Henry A. and associates: Achieving Excellence in Fundraising,
3rd Edition (Jossey –Bass 2010)
Sargeant, Adrian and Jay, Elaine: Building Donor Loyalty: The
Fundraiser‟s Guide to Increasing Lifetime Value (Jossey-Bass 2004)
Lysakowski ACFRE, Linda: The Development Plan (John Wiley & Sons,
Inc. 2007)
Ciconte, Barbara L. and Jacob, Jeanne G.: Fundraising Basics: A
Complete Guide, 3rd Edition (Jones and Bartlett Publishers 2009)
Ahern, Tom and Joyaux ACFRE, Simone: Keep Your Donors (John
Wiley & Sons, Inc. 2008)
Burnett, Ken: Relationship Fundraising (Jossey-Bass 2002)


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

Cynthia J. Armour, CFRE
◦ Elderstone Resource Development

Strategic Leadership and Management
Cavan, Ontario

(705) 799-0636
answers@elderstone.ca


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MYCHARITYCONNECTS

Educational and training opportunities
through MyCharityConnects

www.mycharityconnects.org

UPCOMING WEBINARS
Key Steps for Building a Major Gifts Program
by guest speaker Sue Egles

Date: Wednesday, March 19, 2014
Time: 2:00-3:00PM Eastern Time
The Future of Volunteer Management
by guest speakers Jonathan Burns and
Kevan Osmond
Date: Wednesday, April 2, 2014
Time: 2:00-3:00PM Eastern Time
Jonathan Burns

www.mycharityconnects.org/webinars

Kevan Osmond

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Strategies for Renewing First Time Donor Support

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