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ZAPP Nonprofit Leader

Great Donor Cultivation Strategies will Increase Donor Retention and Total Funds Raised — In fact, just 10% higher retention can increase lifetime donor value 200%!
by Karen Zapp

A recent (Nov. 2008) survey titled, "Fundraising Effectiveness Survey Report *" revealed startling numbers on just how significant donor cultivation is on your nonprofit's bottom line.

Simply stated: Better cultivation means donors stay with you longer and therefore give you more money. Plus, you spend less trying to acquire more new donors just to keep your donor database numbers growing, or at least keep them steady. This all adds up to a stronger, more effective fundraising program.

Here are some of the dramatic numbers to back up these statements . . .

  • Nonprofits lose $5 for every $6 they obtain

  • Gifts from new, recaptured and upgraded donors grew 63.6%, while the gifts lost through lapsed and downgraded donors subtracted 56% from that

  • For every six new donors gained . . . fundraisers lost five

  • Overall giving only grew 7.6%

  • The number of donors grew by just under 10%

Want some good news?

Thank you letters are the most important donor cultivation tool.
And they can help you overturn some of those discouraging statistics you just read about. If you would like some in-depth "how-to" guidance on writing a stronger acknowledgement letter - including examples of copy to use - then  Click Here for the ZAPP GUIDE to Thank You Letters.

A relatively small "bump" in your donor retention can result in remarkably greater dollars raised over time. It's not a one-to-one ratio. So putting serious effort into increasing donor retention through cultivation pays enormous dividends. Here's what Adrian Sargeant, Ph.D., from the Indiana University's Center on Philanthropy says:

“A 10 percent increase in donor retention can increase the lifetime value of the donor database by up to 200 percent. When people stay around, they do things like upgrade their gifts, [give more often], contribute to galas and even volunteer. All those things you can put a dollar value on.”

This is why donor retention is so important. You can't simply take their money and run, so to speak. You must nurture these caring supporters in a variety of ways.

Why exactly do donors remain loyal to your nonprofit? Because you give them good reason to. And the three keys are satisfaction, trust and commitment, according to the study. In other words, focus your cultivation strategies on these three emotions or experiences.

Also recognize that all donors are not created equal. A form of donor recognition or cultivation that gives one donor a warm and fuzzy feeling can easily leave another cold. This means part of your challenge is finding out what works best for different donors. One approach to meeting the challenge is to use a variety of cultivation tools or methods.

Using a variety of methods to cultivate donors has at least two potential benefits: 1) You help ensure everyone is positively impacted by one or more of your recognition touches; and 2) you also show how much you care because every thank-you isn't the exact same form letter, for example.

Taking time to recognize and nurture your donors pays enormous dividends. In the long run you'll not only raise more money for your marvelous mission, but you'll be more efficient in the process.

More efficient fundraising comes from strong donor nurturing.
One of the best tools for nurturing your precious donors is a strong thank you letter. I do hope you found the article you just read helpful. And if you're eager to learn more so you retain more donors and receive more gifts, then I invite you to read about the  ZAPP GUIDE to Thank You Letters.

* ["2008 Fundraising Effectiveness Survey Report" is a project by two organizations and several companies including: Association of Fundraising Professionals (AFP), the Center on Nonprofits and Philanthropy at the Urban Institute in Washington, D.C., and several leading donor software vendors. It is an on-going study where the data from the current year is added to history; and this is the second year of the project.]


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