More On Second Gifts — Part 2
Thank heavens I didn’t promise you a light and easy read on this subject of Second Gifts.
It’s complicated, because a more comprehensive discussion of the subject can involve a range of inter-related concepts from acquisition arithmetic to donor preference, donor identity, and donor commitment and even predictive analytics.
So, in the interest of saving you time and providing the level of information and actions you may find helpful (and willing to work your way through) I’m attempting in this post to work my way from the basic to the more complex.
Chip Grizzard in a comment on Part 1 asked what kind of lift, or improvement in second gift conversion and retention is possible using various techniques. He cited the use of thank you calls as example of one technique.
In this post, where I can, I will try to use both examples and results and provide links that I think are helpful. Here goes.
Those seeking a simple, one-size-fits-all approach to a second gift strategy will find it outlined in elegant simplicity in the advice given by John Haydon and Jeff Brooks in Future Fundraising Now. (Click on the link to John’s article to see the whole deal.)
“What the pro fundraisers do: Wow first-time donors
“The real job in fundraising is getting the second gift from a new donor. That’s when the relationship starts.
“That’s why this post from John Haydon, 3 Ways to Make a Lasting Impression with First-Time Donors, is especially important:
- Express heartfelt and sincere thanks.This alone will set you apart. Forget what you may have heard from surveys: Donors want to be thanked, and they will reward you for it with loyalty.
- Reinforce the impact THEY made.Don’t brag about what you’re going to do with their gift. Tell them what they are making possible.
- Differentiate your org by going old school.Phone call! Hand-written card. The older school, the better! “
Frankly, I couldn’t distill this advice any better than Jeff and John have. And if you follow it and the advice it gives for thanking, recognizing donors and differentiating your organization from others you’ll be miles ahead.
Even though this advice is good please bear in mind that it is generic, meaning designed to provide guidance for a variety of nonprofit organizations and causes.
The upside of good generic advice is that it can be put to work by most organizations with limited budgets and time. The downside is it’s unlikely to get you as far as other more sophisticated, but also more costly and time-consuming, approaches.
Add Transactional Analytics
Assuming your organization is fortunate enough to have substantial numbers of new donors it becomes necessary to plan your second gift actions identifying or targeting those donors who are most likely to make a second gift. In short, you’ll want to concentrate limited funds and energy on those most likely to convert.
This doesn’t mean you should avoid proper thank yous and onboarding as outlined by Jeff and John. It does mean that you should concentrate extra second gift activity (phone calls, special packages, etc.) on those most likely to convert.
The simplest, do-it-yourself approach is to target by the size of the new donor’s initial gift. In Part 1 I noted Ben Miller’s analysis for the Fundraising Effectiveness Project that the average new donor retention rate of those giving under $100 is only 18% compared to 47% of those giving above $250.
In short, follow the money.
In addition, there are inexpensive predictive analytics and models that will help guide you. DonorTrends, our sister company, provides New Donor Conversion models and retention analytics. In her comments to Part 1, Caity Craver offered Agitator readers a free analysis here. Take her up on it.
My experience with these models is that they help increase both the number of second gifts and the overall retention rate because they not only identify actions that should be taken, but track conversion and retention results month by month, campaign by campaign.
Remember: when it comes to moving the net income level it doesn’t take a lot of improvement to make a substantial difference. For example, an organization I work with as a volunteer has 60,000 0-24 month donors with a $280 5 Year Lifetime Value. Moving the retention rate from 57% to 59% increased the net by $145,000 in a year.
Of course, the downside with both the Generic and the Tranactional approach is that they’re operating blindly when it comes to the donor’s attitude and motivation. No knowledge about individual donor’s preferences and needs. Differentiation by transaction, but incapable of distinguishing individuals and serving up experiences that will increase second gifts and retention even more.
Enter Donor Attitudes and Identity
At this stage, we must roll up our sleeves, dig in and take additional actions that most groups simply don’t or don’t want to take. By this I mean learning more about their donors’ attitudes and interests as close to the time of first gift as possible and then taking the proper steps to engage them.
Nick Ellinger of DonorVoice succinctly summarizes the three opportunities an organization should give a new donor (and all donors for that matter) for optimal second gift giving and longer-term commitment
- “To use you as a resource. People are more likely to support organizations that solve their problem. This can range from “I want to eat more sustainably but I’m drowning in a sea of cage-free, organic, cruelty-free, etc. labels and don’t know how” to “I donated to suicide prevention because a friend committed suicide, but now I’m having these thoughts…”. We nonprofits are (or should be) experts in our area and we can help in these areas. And, as a much secondary effect, it allows us to see our supporter as a person.
- “To use you as means to accomplish their goal. If they donated to a particular issue, they may also want to write their legislator about it — that may give them the same (or similar) warm feeling that donating did. Or they may want to volunteer in a very specific way that helps them achieve the same end their donation did.
- “To learn what they think. You want to know how you can serve them better. This can be through a survey or an open-ended question. Or this can be an opportunity to bring in a different medium by having a human call them, thank them, and ask for why they gave and why to you.
The larger point Nick makes is that actions the organization takes should be framed in how they help the donor or cause, not how they help you. It’s amazing how much of a difference there is between “We are also on social media, so like us on Facebook and follow us on Twitter!” and “Our Facebook community helps parents of children with autism support each other, so please join in if you’d like to hear from others who have been where you are.”
Get to the Donor As Close to the Initial Gift as Possible
Most organizations never seek or learn much about their donors’ identity, preferences and needs. In fact, many organizations have trouble even thanking their donors in a timely manner, let alone getting around to anything more meaningful.
But, if you’re serious about second gifts, retention and increasing Lifetime Value, the best time to start getting to know your donor is with the initial gift.
Here’s an example from a pilot project recently completed by my colleagues over at DonorVoice for a human rights organization. I asked Nick Ellinger to summarize it for this post.
“Face-to-face retention is notoriously challenging, leading to long payback periods for the investment to retain these donors.
“The organization used DonorVoice commitment measures to great effect at the point of acquisition to improve its face-to-face six-month retention rates from 60 percent to 80 percent, cutting its burn rate in half. Face-to-face retention is notoriously challenging, leading to long payback periods for the investment to retain these donors.
“Upon receipt of first gift at the point of acquisition the nonprofit asked each donor how committed they were to the organization. From this, they could instantly prioritize the people who were with them no matter what and take steps to and try to persuade those still on the fence to continue giving.
“They also measured one other variable that made a difference and that’s satisfaction with donor experiences. The Rolling Stones were technically incorrect — you can get some satisfaction, but it requires you to measure your donors’ satisfaction with all their experiences and fix the things that are broken both for that donor and globally.
“When the human rights organization measured experience, and matched that with commitment, four groups presented four different donor journeys:
- High commitment, high satisfaction: This is what you love to have. Keep them and upgrade them.
2. Low commitment, low satisfaction: I’m surprised you could sign these people up. They don’t particularly like you or the experience they had with you. These people are unlikely to be good long-term donors.
- Low commitment, high satisfaction: They liked your canvasser, but don’t know that much about you. These are the “persuadables,” ready to hear your messaging and be convinced.
- High commitment, low satisfaction: Red alert! These are people who love you, but didn’t have a great experience. Amnesty Belgium focused on these folks instantly, often with a phone call to see what went wrong. In this case, a $4 phone call can save a donor who cost $250 to $500 to acquire.
“We found that people who complained but had their complaints immediately resolved, retained even better than people who enjoyed their initial experience. This is the reason it’s important to try to learn as much about donor experience as possible—you can change hearts and minds.”
This same approach is not limited to Face-2-Face. It can be used in all channels — mail, phone and online. The key is to get to new donors as quickly as possible to find out why they gave, how satisfied they were with the experience and to quickly resolve any complaints.
Learn As Much About the Donor As Quickly As Possible
Whether securing second gifts or boosting long-term retention and value a sea change in our approach to donors is required. An approach that gives top priority to understanding the donor identity and why they give.
This is an approach that most fundraisers will dismiss out of hand as ‘too difficult’, ‘too expensive’, ‘too time consuming’.
But successfully matching the donor’s identity and her associated needs and preferences is what donor-centricity and long-term donor value are all about.
Meet the donor’s needs and she will meet yours. It’s as simple — and difficult — as that.
So, think about at least running a pilot as follows: rather than the ubiquitous thank you, welcome or other onboarding process that so often unintentionally signals internal teams to dump everything on the donor in the name of ‘welcoming’, shift to ‘getting to know you’ — as the guiding principle for the initial steps in the donor journey.
You won’t be alone. Others have done or are doing it. See Pam Grow’s Could you borrow the smartest thing I ever did? for a simple, workable example of how to get started. Or Jackie Fowler’s case study of Botton Village and the power of determining donor preferences at The donor’s choice: an early fundraising preference service that’s worked brilliantly since 1986.
And for a treasure trove of questions, approaches, conversation starters you can put to work immediately to determine donor identities and interests, check out Chapter 17 of Keep Your Donors, a great guide to stronger donor relationships by Simone Joyaux and Tom Ahern.
More “Required” Reading
The Agitator has written lots about the type of information that’s essential for truly understanding the needs and preferences of donors. A few posts you may want to review. On donor identity I suggest Understanding Donor Identity and Stop Telling Your Donors Who They Are. On donor commitment and donor preference I refer you to Fundraising Metrics That Really Matter, Ask The One Who Matters Most and On Ignoring Donors Needs and Preferences.
This is heavy duty stuff. Lots to think about. Lots to question and explore.
But remember what’s at stake. The payoff on the investment you’re making in donor acquisition will be mediocre or terrific depending in large part on how successful you are in attracting second gifts.
This article was posted in: Breaking Out of the Status Quo, Donor acquisition, Donor Centricity, Donor Centricity - Case Studies, Donor retention / loyalty / commitment, DonorTrends / DonorVoice, Fundraising analytics / data, Fundraising philosophy/profession, Integrated fundraising and marketing, Nonprofit management, Research.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
Search posts by category
Are you looking to recruit senior staff for your organisation or are you looking for a new professional challenge? Then check out Global Charity Jobs TODAY