Critical Truths in Development

By Larry Johnston

In today’s competitive environment, you and your organization MUST focus on the critical issue of donor retention. Keeping the donors you have can be a significant factor in your ability to not only survive in difficult times, but to thrive in any marketing environment. There are, however a variety of assumptions made about what it takes to satisfy donors that your organization is “doing a good job” with their giving dollars. Some of these assumptions can be downright dangerous, so let’s get back to some basic, bedrock truths:

Truth #1: The primary purpose of development is NOT simply to raise money. It’s to create and keep the right kinds of donors. For example, you might succeed for a while in getting ad hoc gifts, but without a stable, loyal base of givers you’ll never be truly successful in development.

Truth #2: Organizations do not keep dissatisfied donors. When donors become dissatisfied, most simply walk away, taking their checkbooks with them. Most organizations are perpetually hemorrhaging donors and many never even stop to ask why. (Don’t be fooled by “financial hardship” being cited by donors as a reason for discontinuing their giving. In 9 out of 10 cases they’re still giving to other organizations. What they were too kind to say is that your organization didn’t make the cut.)

Truth #3: Some donors are more valuable to the organization than others. Losing a “gold” donor is different than losing a “silver” donor. However, a great many organizations don’t know what their overall donor attrition/ retention rates are, let alone what their major donor attrition rates are.

Truth #4: The longer you keep donors, the more valuable they become.
Even a donor who downgrades her giving from $5,000 to $2,500 annually is still $2,500 more valuable to the organization than she was last year!

Truth #5: Some factors are more important to donor retention than others.
Our research confirms that a single factor can account for more than 50% of donors’ satisfaction with the organization!

Truth #6: Smart development people keep the main thing the main thing. They know which satisfaction “drivers” are most important to lifetime donor value and they concentrate on those factors. Majoring on the minors is a folly they gladly leave to others. They welcome clumsy competition.

Truth #7: Any money you spend to acquire new donors, simply to replace donors lost because of dissatisfaction, can rightfully be considered
waste. Dollars that should be going to impact lives are perennially detoured into “revolving door” donor activities: around and around we go, always in motion but never getting anywhere. (There really is a difference between motion and progress but some people apparently don’t mind the difference as long they’re enjoying the trip!)