What if you had a magic wand to double the lifetime value of your donors and reduce your investment in acquiring new donors? Well, that magic wand exists… it’s called stewardship!
As you may know, 70% of first-time donors to nonprofits never make a second gift. If this statistic were true for customers of Apple or Amazon, alarm bells would go off for shareholders and executives.
They would ask questions and conduct market research to discover:
- How can we improve customer satisfaction?
- What is the best way to increase commitment to our brand?
- Has there been a breakdown of trust between our company and customers?
Once these companies discovered the cause of the low loyalty, they would likely redouble their efforts to create the best smartphone or deliver affordable packages in record time – all while keeping the customer experience in mind.
Why don’t all nonprofits follow this framework?
Stewardship is the key to donor retention and research shows that improving retention by just 10% can double the lifetime value of your donor database.
Satisfaction, Commitment, and Trust are just as important for nonprofits as they are for big corporations.
How should Nonprofits Strengthen their Stewardship?
- Cultivate an “attitude of gratitude” within your organization. This starts at the top by treating donors relationally not transactionally.
- Know your numbers. What is your retention rate for new donors? Retention rate = (donors that gave this year/donors that gave last year) X 100 (expressed as a percentage)
- Check your donor experience. Do donors feel like insiders? How can you find ways to express gratitude and impact all year round?
- Consider your investment in stewardship. Do you have a staff member assigned to stewardship? Or is it everyone’s job—when they have the time? It is more cost-effective to keep a donor than to acquire one!
- Steward gifts of all levels. New donors, loyal donors, and major donors should all receive tailored attention from your organization. Don’t forget about the smaller $10/month donors – especially if they’re younger. These relationships could have a big impact in years to come.
Let’s take a page out of the book of successful business brands and build loyalty among our donors!
