03 June 2013

Increasing your NPO’s Donor Retention

Cultivating your Donors

Donor retention should be one of the most important focus points of an NPO, besides its actual mission. Although it is said that it is easier to keep a donor than it is to find a new one, research proves otherwise. That is to say, a US survey shows that around 70% of first-time donors don’t make a repetitive donation. The question that follows is: why is this the case and what can be done about it? It is important to understand that first-time donors strongly believe in the mission of an NPO and will therefore want to support it with a financial contribution. However, when a new donor gives to an NPO, it's the responsibility of the NPO to take consecutive steps. This means that the NPO should try to build a sustainable relationship with the new donor, instead of only thanking them for their money and move on. The way this can be done effectively is through ‘donor cultivation’ and is graphically shown below. As the graph shows, donor relationships will become more sustainable if donors are properly cultivated during the retention stage of the relationship with the NPO.

Once a new donor gives, it’s up to the NPO to turn that minimal relationship into a true long-term affiliation. This means that the NPO needs to treat new donors as new customers who feel that the organization appreciates their (financial) contribution. This process is called ‘donor cultivation’ and should constitute a significant part of an NPO's fund-raising activities. There are various ways to cultivate new donors, such as: regular newsletter, coupons, calls, updates on projects, and invites to non-ask events. Obviously an NPO does not have the resources to personally address each donor, so it should set up a system that targets specific groups of donors. Preferably multiple donor cultivation systems are in play, since an NPO will have donors in different stages of the mutual relationship.

Recognizing the importance of donor cultivation, i-kifu also aims to build long-term relationships with its donors. That is to say, the people who donated to an NPO via the i-kifu platform receive updates on developments of the project they supported. These activity reports provide the donors with interesting follow-up information and can generate a higher level of donor engagement. In addition, keeping donors informed through newsletters on how they can physically contribute to projects is also an important aspect of the cultivation process and something that i-kifu could consider. Finally, donors should be given the possibility to participate in meetings with the NPOs they have supported, in order to get them more involved. If I-kifu were also to pursue this kind of donor cultivation, it could build sustainable long-term relationships with its donors, who will thereby contribute more money to the platform. Increased donor cultivation should therefore be high on i-kifu’s priority list.

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