Two Blueprints For Successful Donor Retention

April 6, 2011       Mark Hrywna      

Retention programs are designed to keep supporters engaged on an annualized basis, and some such programs can be the most effective strategy to improve lifetime value of donors, with the ultimate goal to grow the donor file, maximizing revenue and building long-term value.

Some organizations have specific renewal programs, which include a series of cost-effective contact strategies. There are two models of retention programs — anniversary-based or calendar-based — and charities must determine which is more productive for their organizations, according to Jim Emlet, co-founder and principal of Integral, a Washington, D.C.-based consulting firm.

An anniversary-based approach tends to provide cash flow consistency but a calendar-based might be easier to implement. Testing can be more robust with an anniversary model so it’s important to consider how aggressive your contract strategy is outside of the renewal program, he said. “Understand the messages that resonate most to keep donors engaged,” Emlet said. Some organizations have multiple renewals/retention series, including low-dollar, high-dollar, anniversary and calendar.

Two organizations presented their recent successes at a panel discussion titled, “Fundamentals of Retention: The Types of Programs and Associated Creative Offerings to Effectively Retain Donors,” during the DMA Nonprofit Federation’s Washington, D.C., conference at the Capital Hilton.

The renewal program for New York-based Médecines Sans Frontières/Doctors Without Borders (MSF) constitutes 12 issue-focused direct mail messages annually, and up to 15 email solicitations per year, which tended to have a year-end, holiday focus, according to Amanda Clayton, integrated marketing manager.

About 83 percent of MSF’s funding comes from individuals, 12 percent from foundations, and 3 percent from corporations, but it does not accept U.S. government funding, Clayton said.

There are about 870,000 active donors in MSF’s 0-12 donor file and about 1.05 million in its “lapsed” donor file, which includes 13+ month donors. There are some 250,000 names in its email universe, Clayton said, with another 100,000 that receive email cultivations, such as invitations to MSF events or a quarterly newsletter. The charity will make up to two phone calls a year, determined based on the donor’s behavior, when to make that call, she added.

MSF tested an “anniversary” message against an issue-focused renewal that 0-12 month donors received in the same month. In both cases, the donor confirmation package won, Clayton said, suggesting there’s room for more “anniversary” messages in the renewal program.

The initial package used a #10 envelope and MSF is now testing a #9, Clayton said. Package refinements, such as package size, postage treatment and bulk orders, might improve the overall net while the message is keeping donors engaged. MSF is saving $75,000 on the package alone in 2011 because of testing a new format and taking advantage of gang-printing savings, Clayton said.

The first gift also is a good point to ask donors when they want to hear from the organization, which could also include an ask, according to Jennifer Jones, director of direct response marketing at CARE USA, based in Atlanta.

Fundraisers usually cringe at asking that question because of the fear that all donors will say, “Don’t contact me!” In reality, Jones said that less than one-tenth of 1 percent actually send back a reply card that they typically received from CARE a week after their acknowledgement package. “Let them know you care what they want. Give them the feeling that you really want them involved and that they have say in how they communicate with you,” she said. It still makes the most sense to send the reply card after their first acknowledgement, Jones said. In an era of belt-tightening, a postcard might seem odd, but “it’s such a low-cost way to have a nice warm, fuzzy feeling that it pays for self even if it doesn’t literally pay for itself,” she said.

The objective of the second gift conversion series was to solicit and receive an additional gift from a new donor as quickly as possible. New donors would receive a “special” series after they join, which lasted about six to eight weeks and included an ask to join CARE’s monthly donor program, Partners for Change. Non-monthly donors would begin receive the existing “tried and true” mail stream.

Jones described monthly giving information as “the holy grail of asks,” which is why it’s an area of great focus for CARE. The ask is visually appealing and higher-end looking, and if they have the donor’s phone number, CARE will reach out that way to make the ask. A donor who gives a gift of $1,000 or more through an acquisition mailing would not be put into a monthly ask.

Donors are thanked twice, asked how they wish to communicate, and sent an appeal with the same messages they were brought in on, Jones said, all within a matter of eight weeks or less. The strategy helped to raise the conversion rate by 16 percent in the first year.

CARE also had been seeing its high-value donor file shrinking, with its $500-plus file dipping 17 percent and its $500-plus revenue dropping by 20 percent between 2008 and 2009, and a continued decline into 2010. Of all mid-level donors and revenue, Jones said mail-responsive donors contributed 67 percent of overall revenue and direct mail donors gave six times more in a given year than others did. CARE considers mid-level donors to be those giving anywhere from $1,000 to $10,000.

Seeking to keep these donors engaged, CARE introduced the President’s Circle, with objectives to increase retention of donors giving at the $1,000 level, boost the number of $1,000 donors, more aggressively reactivate lapsed mid-level donors, and provide a bridge between traditional direct response and high level, one-to-one cultivation, like major gifts.

CARE employed a two-pronged approach. For those already giving at the $1,000 level, they were welcomed into the President’s Circle with a welcome package, which included an opt-out option. That was sent to 0-24 month donors who gave a $1,000 gift. Another invitation package was sent to 0-24 month donors with cumulative giving of $500-$999 and 25-36 month donors with single gifts of $1,000 to $4,999.

They were essentially the same packages, only that one said welcome and the other said “you’re invited,” according to Jones, but both were highly personalized wit ha high-end feel, including a personal letter from CARE President & CEO Helene Gayle and a certification of appreciation. Jones said certification might look cheesy but donors love it.

The benefits of the President’s Circle were touted as access to Gayle, exclusive “insider” or mission-centered information, a deeper look at different CARE programs, and create a closer, more personalized connection with the organization while conveying a status as true investors in the mission.

The communication plan for this year involves multichannel approach, said Jones, with all donor touches referencing their membership in the President’s Circle, always recognizing their membership in it.

Donors who were welcomed are continuing to give at their same giving levels and the average gift for donors who were invited is 7 percent higher than same period in the prior year, which speaks to the loyalty, Jones said. The number of mid-level donors increased 15 percent and revenue rose 12 percent, she added, and only a couple of dozen donors out of thousands didn’t accept the invitation to he President’s Circle.