Most people do not invest their money in an organization’s vision long enough to get the job done.
Fundraising professionals know this ugly truth revealed through research conducted by the Fundraising Effectiveness Project. The median retention rate for donors in 2014 was 43%. The dollar or gift retention rate was 46%.
As someone who works with nonprofits and associations to create long term vision, I was shocked to see how much donors churn each year. Apparently most people aren’t like me. I choose organizations that pursue visions I share and then tend to support them year after year, however modestly that might be.
Instead fundraising professionals are scrambling to find new donors to replace lost ones each year: every $100 gained in 2014 was offset by $95 in losses through gift attrition. These professionals do understand it is more cost-effective to keep donors than recruit new ones.
I would really like to know why donors fail to buy into long term visions. There may be multiple explanations, besides fickleness and short attention spans. I can’t believe these organizations aren’t communicating regularly if my inbox and mailbox are any indication of industry norms. However, poor implementation has killed many great visions.
Could it be that nonprofits aren’t educating donors and other stakeholders that big impacts and major changes require sustained effort and money? While people might like instant gratification, visions don’t work that way. Donors at whatever giving level should be investing in visions the same way financial advisors tell us to handle our retirement portfolios: invest continuously and don’t pull out when the going gets tough.
Perhaps donors are just following another common piece of financial advice—diversify your portfolio. Maybe they aren’t abandoning their visions; they just want to try out different options. Or just as likely, they are confused by the plethora of available options in any area and can’t discern which organizations are doing the best job. So they hop from appeal to appeal, organization to organization.
Whatever the explanation, this churn suggests nonprofits are not succeeding in getting people to invest in their visions for the long term. In capital and major gift campaigns, nonprofit organizations are more likely to lay out their visions as an investment. For more episodic giving, they rely on a mix of emotion, alarm, urgency or great opportunity.
Visions should be strong enough to hold an organization on course and bold enough to attract and retain serious money. If money is leaking out of nonprofits at the rate these retention numbers indicate, a lot of nonprofits need to get to work patching up their vision and execution.