Why bother building donor loyalty?

publication date: Apr 28, 2011
author/source: Lisa MacDonald

The answer to this question is simple. Even the smallest improvement in donor loyalty can have a huge impact on the returns an organization is able to generate from its fundraising campaign.  In Tiny Essentials of Donor Loyalty, Professor Adrian Sargeant illustrates the point: 

"Typically a 10 per cent improvement in the level of loyalty now, increases the lifetime value of the fundraising database by around 50 per cent.  This happens because the effect compounds over time. If you have 10 percent more donors still giving at the end of the current year you have 10 per cent more people giving to the organization through year two.  In the second year you'll lose 10 per cent fewer of these and lose fewer of the balance in each subsequent year." 

Be aware of your figures 

Smart organizations make sure their fundraisers know in their specific case what a difference an increase in donor loyalty would make, asserts Sargeant. This can make a difference in budget allocation.  They also make sure that every donor-facing staff member or volunteer is aware of these numbers so that the next time anyone is tempted to be a little short with a caller, he or she understands the impact they could have on the future of the organization.

 Reward loyalty achievement

Nonprofits could take a lesson from big business when in comes to remuneration for staff achievements against a loyalty benchmark.  Poor performance in securing donor loyalty is resulting in ever-increasing rates of attrition for the sector.  Professor Sargeant likens it to continually trying to top up what has become a very leaky bucket and throwing away money away in the process.

But don't despair.  Every organization has options for tackling the challenge of building donor loyalty.  In Tiny Essentials of Donor Loyalty, Sargeant details the key drivers of loyalty and then provides specific actions that an organization can take to build loyalty in that area.   

Order your copy of Tiny Essentials of Donor Loyalty for only $23.00.


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