Data, ROI

Rethinking Donor Retention

I had the privilege of sharing my thoughts on how nonprofits can rethink donor retention measurements in the APRA DC Winter 2016 Newsletter. I encourage you to head on over and read it. Starting on page 4 you get some thoughts on data analysis, baseball and formulas. What is not to like?

A small sample (size):

To bring it back to donor retention, the problem I have with it is the same problem that statisticians have with batting average: there is a lack of value placed on the desired result, which in fundraising is the amount of money raised and in baseball is the amount of bases. What we have begun to explore is weighting donor retention in a way that also gives value to the donation.


Why Research? A Beginning of Sorts

Fundraising is the second most important part of any non-profit organization. Any non-profit starts with an idea: start a college, serve school lunches, free bonded laborers. The next step has to always be fundraising, whether it’s from the founder’s own pockets, a government grant or the generosity of others to give those initial seed funds, the formula is always the same.

Idea + Fundraising = Non-Profit

So where does research fit in?

I see my job as a researcher accomplishing two main goals.

1) A researcher is the eyes and ears for an organization that has gotten big enough that every constituent cannot be listened to in a healthy way. A constituent, whether an advocate or a donor (or both), wants to have a relationship with an organization. Researchers help identify places where deeper relationships can be built where otherwise the responsibility of the relationship would have fallen 100% onto the constituent to push forward. Basically, prospect research in advancement is a form of listening which catalyzes new relationships.

2) A researcher adds a profound impact on ROI in the form of cost savings. The amount of resources a researcher saves in limiting fruitless trips to visit prospective donors on a hunch or whim is worth the researcher’s salary every year. By proactively identifying who is a prospective donor and who is not, the researcher saves countless airplane tickets, hotel stays, and dinners. All that additional funding that a researcher unlocks for an organization is just a bonus.* Bottom line: just having a researcher on staff is worst case a budget neutral decision for an organization.

Of course there is more. The strategy, relationship management, market segmentation and analytics that researchers drive in their advancement shops are vital to an organization’s fundraising success. Many people just do not see it that way. Yet. But they will. The world of business intelligence is growing. The corporate world has caught on. So to will non-profits and NGOs. This is just the beginning.