Building Lifetime Donors

What’s in it for me?

In this “what’s in it for me” world, you can usually tell when someone only wants something from you.

Well, guess what. So can donors.

Yet in the nonprofit community, many organizations often forget that donors are people. After a while, the daily workload and persistent funding demands lead some nonprofits to think in transactional terms — kind of like the DMV or the water bill. Support is expected.

Nonprofits know there’s a person there somewhere, but in reality, they can become myopic, focused more on their own needs than on the interests of the donor. For some people who give, that’s enough… but for many it isn’t.

And then the inevitable happens: donors begin to lapse and appeals from the nonprofit become more urgent, more critical, and—dare we say—outright demanding.

These organizations say they value their donors, but when more closely examined, their definition of “value” has more to do with what they can get out of donors, and less to do with how they can serve them or work together. Those organizations really only want a relationship with their donors’ money, not necessarily with the donors themselves.

Lifetime value

Recently, I revisited the classic nonprofit executive’s guide, “Building Donor Loyalty: The Fundraiser’s Guide to Increasing Lifetime Value” by Adrian Sargeant and Elaine Joy.

In this writing, Sargeant and Joy examine a different way of thinking about some of these topics; a way that leads to sustainable and growing fundraising models which engage donors with a long-term view of relationships and lifetime value.

A quick excerpt from page 44 shows some general comparisons between transaction-based and relationship-based fundraising approaches:

transaction versus relationship fundraising

Furthermore, on the next page they describe some items of interest from the donor’s perspective: ideas that are important to building relationships, which in turn help engage a donor for a lifetime.

These ideas address how an organization…

… finds you
… gets to know you
… ensures you get what you want from them
… is delivering on its promises
… seeks your advice and input
… demonstrates that it values you

Roadblocks to relationship-based fundraising

These concepts are all well and good (and in some cases, just plain old common sense), so why is it so difficult to put these ideas into practice?

There are many reasons, but here are some of the most frequently cited:

Timing

Fundraisers are often feel pressured by the calendar to convert prospects to donors and generate lift at an unnatural or unsustainable pace.

Some donors are ready for a commitment on the first visit. Some take months, if not years.

Some donors will follow their largest gift to date with an even more generous one. Other donors, however, may have made that big gift “sacrificially” and need time to refill their own coffers before they are in a position to make another commitment.

Contrary to your upcoming job review or board report, a donor’s ability to give might not be in sync with the organization’s fiscal calendar. I know this idea has a lot of ramifications, but it is true and thereby can be risky to your nonprofit if ignored.

This is also why it is so critical to build relationships in advance of the need. This allows donors to get to know and trust you. Then, when it’s time for the ask, it comes naturally, it’s successful, and it strengthens loyalty. By contrast, a failure to understand and respect proper timing is a relationship killer.

Culture

Regrettably, many leaders don’t really care about all that warm, fuzzy people stuff.

I was once interviewing for a fundraiser position at a large nonprofit. It was a new leadership position raising money for a healthcare-focused community development initiative that included several organizations joining forces. There were a lot of political stakeholders.

During the interview, the panel asked me what I would say to a prospective new donor on the first phone call. That was an easy one.

I started with, “Hello, my name is Chris and I am calling from…” before transitioning to some conversation starters designed to determine the mood and personality of the prospect—knowing that people will almost always provide you with clues as to how they would like to interact; casually, relational style, businesslike, matter-of-fact, etc.

Some of the people around the interview table got it.

They understood that donors are real people.

Others did not.

By the end of the interview, I realized the committee was headed in such a misguided direction that I did not want to join them; I was thankful, therefore, when I was not offered the position.

After the interview, I managed to get a debriefing from an acquaintance on the selection committee. As it turned out, the new exec they eventually decided to hire was a “go-for-the-gift-NOW” type of fundraiser.

The leader of the committee strongly recommended they hire that particular person and following the interview, even said, “Now there is a fundraiser.”

Undoubtedly, this leader subscribed to the mantra: “We are fundraisers, not friendraisers.” (I have heard this said out loud before—by a prominent nonprofit executive, no less.)

This new executive had no intention of building relationships. Within a couple of years, the nonprofit significantly changed the initiative, citing a lack of funding.

Meanwhile, underserved communities continued to suffer and the needle for improved health outcomes hardly budged at all, which was the community development initiative’s entire raison d’être.

Unfortunately, what hindered that very worthy project was not funding. It was culture.

A culture that fails to build proper relationships with donors will find itself perpetually struggling to thrive.

Silos

When the people in your organization do not have the permission and tools to work together, guess what… they won’t.

Look for turf wars and change the landscape so everyone wins. People who don’t like to collaborate and work well with others (or those with an ax to grind, or those for whom climbing the ladder means stepping on other people, etc.) should be encouraged to play nice or move on to a position for which they are better suited—like professional wrestler or roller derby queen.

Next, get rid of point solutions. If the people in your organization are all using different software products all day, there is no way for them to easily or efficiently collaborate.

The larger your nonprofit organization, the more you should emphasize eliminating silos of information, of people, and of processes.

The more collaborative your teams, the more seamless your interactions and the stronger your relationships become with each other and with donors.

Short-sighted strategies

There is nothing wrong with short-term strategies. They serve a critical role in any organization.

What is wrong is expecting short-term strategies to produce long-term results.

To figure this out, every strategy and tactic should be able to answer its impact on short- AND long-term results.

Will the direct mail piece you are about to send help with your year end gifts, but drive some donors to lapse?

Are your marketing lists appropriately segmented so that sustainers on monthly auto-payments don’t get hammered with every “urgent” appeal and begin to feel like it is never enough?

Are your lower-segment donors receiving appeals for major gifts, causing embarrassment about their capacity to give?

Are your major gift officers able to remove donors and prospects from the general appeal list or phone-a-thon?

If short-sighted strategies are hurting long-term results, then you need to go back to the drawing board.

Relationships are at the heart of loyalty

There is a lot more that could be said but, for today, remember that you learned some of the most profound tips for relationship success in the 1st grade:

  • Play and work well with others
  • Think of others before yourself
  • Look beyond your own needs
  • Listen more than you talk
  • Please and thank you are always appropriate
  • Slow and steady wins the race
  • Win-win means everyone wins, not you win twice

Change the way you work

So what can you do to become a relationship driven organization?

  • Change your culture. As Admiral Vern Clark once said, “Culture eats strategy for lunch.”
  • Give your staff time and permission to build internal and external relationships – which means you don’t always get instant results.
  • Set up systems that track non-financial interactions (we call these engagement health indicators)
  • Track motivational indicators
  • Tear down silos
  • Eliminate point solutions
  • Automate processes so your staff can focus relationships, delivering mission, and building bridges inside the organization and outside with the community
  • Get donors involved as volunteers and let them lead when appropriate
  • Ask donors for input and advice (and take it when they are right)

When it comes to building donor loyalty and increasing lifetime value, keep relationship building front and center for fundraising success.

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