MAXIMIZING THE LIFETIME VALUE OF YOUR DONORS FOR FUNDRAISING

SUCCESS

Jay Love, Co-founder & CEO, Bloomerang

Maximize The Lifetime Value of Your Donors for

Fundraising Success

Jay B. Love

• 30 Years of Technology Leadership• Over 20,000 Database Installations• Former Founder & CEO of eTapestry• Former CEO of Master Software/Fund-Master• AFP Board Member• AFP Ethics Committee Chairman• Center on Philanthropy at IU Board Member• Innovation Fund at Butler University Board Member• Gleaners Food Bank Board Member• Co-Chair of Indianapolis YMCA Capital Campaign

3

Your presenter »

Agenda »

• The importance of donor retention• Your database: Your Best Friend in Maximizing Value• Data Management 101• Segmenting 101

• Appeals• Acknowledgement

• Engagement Tracking/Scoring• Reporting

What is the key purpose of a database?

What is the key purpose of a database?

“To enable and insure the properfunding of your organization’s mission.”

What is the key purpose of a database?

“To enable and insure the properfunding of your organization’s mission.”

(Is there a secret to achieving this purpose?)

Calculating Your Retention Rate »

# of Donors in Current 12 Months(from the previous years pool)

divided by

# of Donors in Previous 12 Months

Fundraising Effectiveness Project (FEP)A project to help nonprofit organizations

measure and compare

Who is Studying Donor Retention?

The 2014 results are in »

Nearly 6 out of every 10 donors do not give again!

New donor retention is even worse »

Who to focus on »

Donor Attrition Over Five Years

# of Donors Attrition Rate

Donors Remaining After 1 Year

Donors Remaining

After 2 Years

Donors Remaining

After 3 Years

Donors Remaining

After 4 Years

Donors Remaining

After 5 Years

1,000 20% 800 640 512 410 328

1,000 40% 600 360 216 130 78

1,000 60% 400 160 64 26 10

So what?

So what?Improving donor retention rates by just 10% can increase the lifetime value of your database by 150-200%!

- Dr. Adrian Sergeant,Bloomerang Chief Scientist

10% of your donors in the previous year multiplied by your average gift amount

EQUALS

Potential first-year increase!

The hidden “math” of your database »

“The total net contribution that a customer/donor generates during his/her lifetime in your database”

Defining Lifetime Value »

$1000 +

$500 - $1000

$100 - $500

$25 and under annually

$25 - $100

Value

Value Segments »

Time

”Proper database usageis the key to donor retention

and lifetime value!

The 3-Legged Stool »

1. Record keeping2. Outbound communications3. Interactions

1. Record Keeping »

• The original reason to replace 3x5 cards in the 1980s!

• Everyone in the organization should use the database

• Everyone in the organization should benefit from data

2. Communications »• The “secret sauce” of retention success!• Offline

• Appeals• Acknowledgements• Newsletters• Handwritten notes (magical!)

• Online• Email• Website interactions• All must be integrated!

3. Interactions »• Types

• Phone calls• Texts• Meetings• Emails• Chat

• Notes• The institutional memory of your organization• Enables the highest levels of engagement• All must be integrated!

Data Management »

Can you have too many names in your database?

0 / 10 / 90 Rule »

• 0% of your funding• 10% of your funding• 90% of your funding

0 / 10 / 90 Rule »

• 0% of your funding• 10% of your funding• 90% of your funding

What should you do with each segment?

0 / 10 / 90 Rule »• 0% of your funding

• remove all but:• previous above-average donors/sponsors• previous board members• previous top volunteers• alumni• survey respondents

• 10% of your funding• handle in an automatic manner, but research

• 90% of your funding• focus the majority of your efforts here

Appeal segmenting »

Appeal principles »

• Design a “style” for each segment• Consider calling and mailing segments 2, 4 and 6• Handwritten notes and/or P.S. are powerful• Test, test, test!• Personalize as much as possible (database fields)• More than once a year• Always aim for monthly donors!

Acknowledgement segmenting »

• 48-72 hour rule • Call ALL first-time donors (if possible)• Handwritten notes• Be different than the rest• State exactly how donation will be used • Fully map a track for each segment

Acknowledgement principles »

Donor communications »

“Successful donor communications are quite simple. At heart, they are love letters to donors & prospects, woven through with clear cries for help.”- Tom Ahern,

Bloomerang Donor Communications Head Coach

http://aherncomm.com

Engagement factors »

40

The number of charities supported annually• Income 50K – 2-3• Income 100K – 3-4• Income >100K – 4-5• One is usually there church• Second is most likely their school

Importance of Being a “Chosen” Charity »

Where Does This Leave Your Cause?

Reporting »

1. Record keeping• Hone in on what is truly needed

Reporting »

1. Record keeping2. Communication-related (plus results!)

• The key to proper testing

Reporting »

1. Record keeping2. Communication-related (plus results!)3. Big picture for board (YTD and vs budget)

• Dashboards and graphics

Reporting »

1. Record keeping2. Communication-related (plus results!)3. Big picture for board (YTD and vs budget)4. KPIs

• Metrics that make a difference

Reporting »

KPI September Goal September ActualNew Donors 500 831New Volunteer Signups 460 652Web Sessions 17,500 22,253Email Signups 12,500 16,794Cost per New Donor $1.00 $1.39Cost per Return Donor $0.25 $0.27

Budget YTD $61,745.09 $61,638.94

1. Record keeping2. Communication-related (plus results!)3. Big picture for board (YTD and vs budget)4. KPIs5. Funnel

• Moves the funding needle the most!

Reporting »

Free educational resources »

https://bloomerang.co/resources

• Daily blog post• Weekly webinar• Downloadables• Nonprofit Wrap-Up• Bloomerang TV

Questions?Jay B. Love

jay.love@bloomerang.co@JayBarclayLove