Over the holidays I slogged through a river of prognostications flowing into 2009. Of course virtually everyone agrees that 2009 will be anything but normal. With what will probably be the most severe economic crisis since the Great Depression many fundraisers and nonprofit leaders face the double whammy of rising demand for services and declining revenues.

In December the Bridgespan Group published a survey in which over 100 nonprofit leaders set forth a variety of strategies they will follow in these uncertain times. Two items from the survey struck me: 1) Only 28% of the organizations surveyed had a "well defined" contingency plan; but 2) more than two-thirds of the respondents were making firm commitments to protecting their "core" of support. (For other ‘tough times’ insights see Bridgespan’s "Managing in Tough Times: 7 Steps".)

And the goal of "protecting the core" is what leads to my first Agitator post of 2009, and my one and only Fundraising Resolution for the New Year: "Explore, define and do something tangible about the great unturned stone in our sector — the issue of donor loyalty."

Long before this current crisis, the troubled handwriting of falling acquisition and retention rates was disturbingly clear on the fundraising wall. For nearly three years we’ve been warning and commenting on the problem.

Well, now’s the time for all of us to step up efforts in this critically important area, to start asking tough questions, to engage in far more research and testing to gather as much intelligence from our community as possible. And, most importantly, to turn all this into actionable recommendations that will help each other in troubled times and beyond.

Here at The Agitator we’re preparing a White Paper on Donor Loyalty based on our recent DonorTrends/Agitator Survey, along with recommendations appropriate to the survey’s findings. We will be publishing the first loyalty paper, exclusive to Premium members, on February 6.

And over at DonorTrends, our sister company, we have a small army of analysts, predictive modelers, survey experts and fundraisers working overtime on developing Donor Satisfaction and Loyalty Indexes, Scoring Systems, and Action Priorities. We’ll keep you posted on our progress.

Since the purpose of The Agitator is to, well, "agitate" and challenge convention, I hope — no, urge — that Agitator readers weigh in with your thoughts and ideas on this critical subject. Perhaps you’d like to be part of an advisory group we’re forming, or perhaps you’d just like to share some thoughts by e-mail or over the phone. Either way, just shoot me a private email to Roger@theagitator.net and I’ll be in touch.

The reason we consider this ‘Manhattan Project of Fundraising" so important is that retaining and building on an organization’s "core" is critical to survival, especially in tough times. Adrian Sargeant, the British donor loyalty guru, estimates, and I believe correctly so, that a ten percent increase in donor retention can increase net revenues by up to 200%!!!

In figuring all this out, we’re going to have to challenge convention and the ‘old’ ways of doing things, which clearly are working less and less well; practices that have become staples of the trade like RFM (Recency, Frequency, Monetary value) that are no longer good enough to get the job done. In doing so, some oxes will get gored, some business-as-usual complacency will be challenged, and some folks will even feel threatened. So be it.

John W. Gardner, a mentor of both Tom and me and one of the great leaders and philosphers in the independent sector, put the need to challenge business-as-usual quite succinctly: "The society which scorns excellence in plumbing as a humble activity, and tolerates shoddiness in philosophy because it is an exalted activity, will have neither good plumbing nor good philosophy: neither its pipes nor its theories will hold water."

Happy New Year!


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This article was posted in: Donor retention / loyalty / commitment, DonorTrends / DonorVoice, Fundraising analytics / data, Nonprofit management.
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