Jenny Henry is the Director of Communication at Sumac, a complete, integrated software solution for non-profits with unmatched segmenting capabilities. Its cost-benefit ratio is the best on the market. For information on Sumac or to see additional articles published by Sumac Research, visit : www.sumac.com

Is your organization spending too much on donor acquisition in order to combat high donor attrition? According to experts, this is a costly mistake! If your organization concentrated instead on targeted, personal communications with existing donors, many more donors would stick around and move up the donor pyramid. This shift would not only increase the organization's revenue, but save resources that otherwise would be spent on donor acquisition. 

 The problem: Donor Attrition and the Cost of Acquisition

According to Adrian Sargeant, a professor of fundraising at Indiana University's Center on Philanthropy, a typical nonprofit will lose 50% of its donors between the first and second donation and up to 30% per year thereafter.[3] With these rates, organizations must continually scramble to bring in new donors. But donor acquisition is very costly. According to Penelope Burk, president of Cygnus Applied Research, "new donors are expensive to get and rarely give much the first time."[1] In the end, "acquisition is more expensive than retention and often runs at a loss."[2] If non-profits focused instead on boosting donor retention, therefore, the payoff could be huge.[1]

Boosting Donor Retention

Likewise, Sargeant argues that even a small improvement in retention can yield a windfall over time. Even boosting the retention rate by as little as 10 percent, he says, can increase the lifetime value of a nonprofit's donor base by up to 200%.[3]

So, how do you boost donor retention? You give donors what they want. Thanks to Burk's national research studies on the key motivators of donor loyalty, we know exactly what that is. In that research, 93% of donors indicated three things that would influence them to stay loyal and give increasingly generous gifts over time:

1.     Prompt and personalized gift acknowledgement

2.     Confirmation that funds will be used as originally indicated in the solicitation

3.     Measurable results on donors' last gift before they are asked for another one.[1]

All three of these things, Burk points out, are tied to donor communication and are within the control of charities and fundraisers to change.[1] So, why don't non-profits focus their attention on changing communications to meet donors needs? (READ MORE)

 Plan to Succeed - Internet Strategies

Denise Davies is an Internet and media consultant with Aleph Consulting.  She works with nonprofit organizations and small businesses, helping then to maximize their effective use of the Internet.  Contact Denise directly at davies@alephinc.com

It's the beginning of a new year and time to reflect on the past year and plan for 2011.

In your Internet world how did it go in 2010?   Here are a few tips for reviewing the past year:

•  Check your website statistics and analyze what were the pages most viewed?
•  Where did most of your site visitors come from? 
•  Did your "Calls to Action" bring results - these could be signups for your newsletter, sales of products or services, requests for information, signups for courses or others depending on your organization needs?
• Look at your website as an outsider that represents your target audience - are you able to find up to date information? Is it easy to navigate and move around your website?  Are you motivated to do something? 
•   Is it easy for people to "Share" the content of your website on Facebook and other social media sites? 
•   Have you started using Facebook for business?  Are you satisfied with building your fan base on Facebook, LinkedIN and other social media?  Are you happy with your plan on using these Internet arenas to build your list of people interested in your organization?
• Review your methods for building your lists - of donors, potential donors, sponsors, volunteers, partners, alliances, community members.  Has your list grown in 2010? 
• How are you communicating with your lists? Are you using email newsletters, messaging through Facebook?   How do you inform people of new content and actions you want them to take?  How does this fit with your overall communications plan for your organization?

Take a deep breath and don't get overwhelmed.  You don't need to do everything at once.  Plan one activity to focus on first and then schedule one activity every couple of weeks so that it is not overwhelming.
 

For example:

1. What alliances can you build on - see where your website visitors came from.  How can you get more alliance partners and other websites that would like to link to you. 
2.   Did you identify that some areas of your website are more popular?  On those pages be sure to have links to your "Calls to Action" to improve the return rate to your website.  (READ MORE)