This is the first of eight chapters on building donor loyalty. The Table of Contents below will take you to additional chapters.

Table of Contents

• Chapter 1: A Goal for Every Organization
• Chapter 2: A Strategy for Cultivating Relationships with Donors
• Chapter 3: What You Need to Know about Your Donors
• Chapter 4: The Importance of Being Donor Centric
• Chapter 5: Tactics for Cultivating Relationships with Donors
• Chapter 6: Stewards of Other People’s Money
• Chapter 7: Tools for Donor Cultivation
• Chapter 8: Surveying Your Donors

Chapter 1

A Goal for Every Organization

When we set fund-raising goals, we usually cast them in terms of dollars. However, the major fund-raising goal of any organization should be to build a base of loyal, supportive donors who give money year after year, campaign after campaign. It is that base of loyal, supportive donors upon which the financial goals of every campaign are built, making donor loyalty the most critical element of long-term fund-raising success.

The only bigger sin than allowing the first gift received from a donor to become the only gift received from that donor is allowing the most recent gift from a donor who has made multiple gifts, to become the last gift from that donor. That’s because the longer a donor gives to an organization the more likely those gifts are to grow in size and frequency.

Losing a donor is so painful to me that my objective has always been to never allow it to happen. I wish I could say I have met that objective. Still though, we must strive to hold onto every donor by consciously and actively working to build donor loyalty.

Three Basic Truths Of Donor Loyalty

Three basic truths of donor loyalty have grown out of my more than 35 years as a development professional. I’ve learned that there are no shortcuts to donor loyalty, but that building it isn’t a scholarly exercise either. It’s mostly common sense and the willingness to keep at it. The three basic truths of donor loyalty are:

1. Organizations are not entitled to donor loyalty: They must first earn it and then constantly re-earn it.
2. Building donor loyalty is not magic: It is simply hard work on the part of people who are thoroughly prepared.
3. You don’t wait for the “right” time to build donor loyalty: You do it all the time.

There is a path down which we must walk to achieve donor loyalty. It’s not a path that twists in one direction and then turns in another. It is as straight as they come, but it is narrow. It’s not hard to follow, but once we step off it, regaining our footing is very hard. Donor loyalty is achieved by responding to our donors with:

• Active cultivation
• Careful consideration
• Respectful appreciation

We must always cultivate relationships with our donors, treat our donors with consideration for their beliefs and feelings, and express our gratitude with appropriate, heartfelt thanks.

To understand the value of building donor loyalty and cultivating relationships with individual donors, all one needs to do is take a look at where gifts to non-profit organizations usually come from year after year. About 85% of contributed income comes from private individuals—75% from living individuals, and 10% in the form of bequests. Foundations grant 10% and corporations give the remaining 5%.

Year in and year out, the vast majority of gifts to non-profit organizations come from private individuals. That’s why cultivating and maintaining relationships with them is crucially important. Relationships with individual donors are highly valuable resources. Cultivate them well and you will harvest rewards year after year, but you will lose your donors if you fail to understand:

• Who they are,
• What they need and want,
• And how and why they give.

When an organization loses a repeat donor, it loses in two ways. First, a lost donor is lost not only for this year, but for every year to follow. Secondly, the hoped for gifts from every lost donor will have to be replaced with money from new donors, and replacing a lost donor is usually not a one-for-one exchange. That’s because in general, the longer a donor gives to an organization, the more frequent and larger those gifts become.

The “Climate” For Donor Loyalty

Having recognized the importance of donor loyalty to the long-term financial health of an organization, we need to ask ourselves what the climate for donor loyalty is at this time.

Surveys have been consistent telling a large part of the tale. I have seen several surveys conducted over a span of time which featured telephone interviews with adults known to be givers to various types of charities. One typical survey involved over one-thousand such interviewees, and the results showed a weakening of both donor loyalty and donor confidence in non-profits.

• Over the years, the percentage of people who give to non-profits has dropped from 87% to 69%. That’s the lowest it has been.
• Twenty-three percent of respondents said they had lost confidence in non-profits in the past two years.
• Fourteen percent of donors had discontinued support of an organization in the past two years.

The confidence people have in a non-profit has a great deal to do with their willingness to give to that organization and their loyalty to it.

All the strategies and tactics in the world aimed at building donor loyalty are useless if your organization has not made itself worthy of that loyalty. An organization worthy of the loyalty of its donors must:

• Have a mission worth performing.
• Perform that mission well.
• Have strong, respected leadership.
• Be fiscally sound.
• Operate in the open. Meaning It must voluntarily and proactively share with the public information about its operations and its stewardship of funds

Donor loyalty does indeed grow from within the organization.

When it comes to confidence and loyalty, what do you know about your donors? Did your organization have more or fewer donors than the year before? What is your rate of donor attrition – the percentage of donors who give one year but not the next? Have you surveyed your donors within the past five years to determine their confidence in your organization? Think about your answers, and you will begin to get an idea where your organization stands on the donor loyalty continuum. Are you losing a higher percentage of donors each year, or are you retaining more of them?

Table of Contents

• Chapter 1: A Goal for Every Organization
• Chapter 2: A Strategy for Cultivating Relationships with Donors
• Chapter 3: What You Need to Know about Your Donors
• Chapter 4: The Importance of Being Donor Centric
• Chapter 5: Tactics for Cultivating Relationships with Donors
• Chapter 6: Stewards of Other People’s Money
• Chapter 7: Tools for Donor Cultivation
• Chapter 8: Surveying Your Donors