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Disappearing Donors? Smart Tactics for Sustainable Solutions

Saranah Holmes

By Wendy Merrill, Strategy Horse Consulting Group

Several weeks ago the Baltimore Business Journal published an alarming piece highlighting the fact that nonprofits' donor retention rates continue to remain below 50% over the last 10 years.

To me, this illustrates the fact that competition among non-profits is exponentially stiffer than that facing in the for-profit sector. 
So what can these organizations do to vie for our already stretched dollar?  

Think like a business. 

Successful businesses become so through customer engagement.  Engagement can take on many forms, but the common denominator always comes down to reciprocity. 
 
The traditional scenario has been:
 
Business offers a product or service to prospective customer.  Customer is intrigued by their individualized perception of value.  Business succeeds in convincing customer to buy by conveying value (what’s in it for the customer).  Customer pays business and business grows revenue and develops advocates. 
 
Once upon a time it was enough that a non-profit delivered an emotive pitch to its donors and the heartstrings always led to the opening of wallets.  These days it seems that there are countless new non-profits established every day.  This means that competition for an already thinly stretched dollar is now fiercer than ever.  And what has the philanthropic sector done to prepare for this stiff competition?
 
Not enough.
 
Everyone has a passionate story and there is no cause that is more important than another.  Theoretically we all have the desire to open both our hearts and our bank accounts to anyone in need.  The fact is, however, that most of us have limited budgets and need to be choosy as to where we spend them.  So how does a non-profit grab a cherished donor and then hold on to them?  The mutual exchange of value. 
 
Example:

The director of a local organization that raises money to fight cancer asks a contact for an introduction to a substantial potential donor.  The introduction is made and the director is poised to make her pitch.  Her pitch is a polished soliloquy about the benevolence of the charity…their geographical reach…their low expenses.  At the end of her story she makes “the ask” for a healthy donation and receives the lukewarm response of “I’ll have to think about it.”
 
For a salesperson in the for-profit world, those six words equal failure.   
 
Let’s try another approach.
 
How about if the same director connects with the potential donor and before delivering her pitch, she focuses the conversation entirely on the donor.  What do they do?  Where are they from?  What is important to them personally?  What about professionally?  What charities have they been involved with in the past?   What was their satisfaction level with these experiences? 
 
In addition to making a real difference in furthering the non-profit organization’s mission, what else could the organization, board or director do for the donor that would make their commitment even more meaningful to them?
 
See the difference?  Reciprocity.
 
I wager that if more non-profits trained their development professionals, boards and staffers in this style of solicitation, their donor retention rates would skyrocket—and their recruitment efforts would be cut dramatically due to the network of “ambassadors for the cause” that would organically grow all on its own.