Tom’s Black Monday post Help Isn’t on the Way is the second of a one-two punch alerting us to two deadly and widespread trends summarized by the research firm Analytical Ones on their blog:

  • The scary phenomenon of shrinking files caused by poor retention and lousy acquisition rates; and,
  • The fact that new donors (average age 63) replacing the ones lost aren’t much younger than the old donors (average age 68.5), which, in turn, results in a disturbing decline of lifetime value on donor files.

As Jeff Brooks over at FutureFundraisingNow pointedly puts it: “Eventually … the house of cards collapses.”

What’s most disturbing to me is that many fundraisers don’t see the decline and almost as many don’t know what to do about it. ‘It’ being ‘retention’ — the holding on to an organization’s most valuable asset, its donors.

When it comes to retention, I fear that too many fundraisers are either just plain ignorant, or, even worse, they’re whistling past the graveyard and taking little or no action.

This fear was confirmed last week with Bloomerang’s release of its The State of Retention Report. [Click infographic to enlarge.]

Bloomerang’s Retention Survey, sent to 8,000 nonprofit folks, revealed the following:

  • Although 98.2% of the respondents said they are familiar with the term“donor retention” …
  • Only 55.2% reported tracking their own donor retention rate!
  • Of those who are tracking 23.8% have seen an increase …
  • 7.38% have seen a decrease … BUT … 24% aren’t sure!

Even more disturbing is that 78.4% of the respondents reported that their fundraising goals have increased since last year. Despite this budgeted increase nearly half (44.8%) aren’t tracking their retention rate. Here’s why:

  • 15.6% “don’t know how”
  • 1.3% “don’t see the value”
  • 21% “don’t have the time”
  • 21% say they “don’t have the technology.”

Don’t have the technology?????  !!!!!!!!   I’ve never heard of a nonprofit that can’t at least afford a pencil and a piece of paper.

As Bloomerang notes on its website: “To calculate your retention rate, simply take the number of donors who gave to your organization in one calendar year, and divide it by the number of donors from the same pool who made a donation in year two.”

In other words, if 1,000  donors gave to your organization in 2012, and only 400 of those 1,000 made a donation in 2013, your donor retention rate would be 40%.  Your donor attrition rate would be 60%.

OR … if you’ve misplaced your ballpoint pen or pencil you can do it online with Bloomerang’s Retention Rate Calculator here.

What’s your retention rate? Are you proud of it?

Roger

 

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