How to Rebuild an Individual Donor Base

Four out of five first-time donors never give a second time. Fixing that is cheaper than replacing them, and almost nobody is measuring it.

Most organizations that ask us about individual giving start with acquisition. Where do we find new donors. Which channel works now. How do we reach people who have never heard of us.

Acquisition is the most expensive place to start and the least likely to work. Across the sector, 43.3 percent of last year’s donors gave again this year. Among first-time donors, four out of five never give a second time. Every new name you buy enters a system that loses most of them inside 12 months.

The good news is that the fix is smaller than the problem. Four moves, none of which require new software.

1. Measure second-gift conversion, not retention

Overall retention flatters you. It is dominated by the loyal donors who have given for a decade and will give again regardless of what you do. Their loyalty hides what is happening at the front door.

The number that tells you whether you are building anything is second-gift conversion. Of the people who gave for the first time in the last 12 months, what percentage gave again? Most organizations have never calculated it. It takes an afternoon with your database and it will be the most uncomfortable number on your dashboard. Calculate it this week, then track it monthly.

2. Redesign the 90 days after a first gift

Almost every organization has a thank-you process and almost none has a second-gift process. The window between the first gift and the second is where the relationship either forms or does not, and most of us spend it silent.

Three things belong in that window. A thank-you from an actual person within 48 hours, not an automated receipt. A report within 30 days on what the gift did, specific enough that the donor could repeat it to someone else, with no ask attached. And one more contact before day 90 that asks for nothing at all.

That last one is the hard sell internally, because it looks like effort with no return. It is the whole point. A donor who has heard from you twice without being asked for anything has learned something about what kind of organization you are.

3. Put one non-ask touch in every quarter

Pull up your donor communications calendar and mark every touchpoint as ask or not-ask. For most organizations the ratio is embarrassing. Appeal, event invitation, year-end appeal, thank-you, appeal.

A donor who only hears from you when you need money has correctly understood the relationship. One genuine non-ask contact per quarter changes what the relationship is, and it costs a fraction of what replacing that donor costs.

4. Tell your board the truth about the timeline

This is where most donor base rebuilds die. The investment lands in year one. The return lands in year three. Boards that were promised a faster payback lose patience in month 14 and redirect the money to a major gifts push, which produces a number they can see this year.

So do not promise a faster payback. Go in with the second-gift conversion number, the cost of acquiring a replacement donor, and an honest three-year curve. Ask the board to approve a metric, not just a budget. If second-gift conversion is the thing you are managing, put it in the dashboard next to program outcomes and report it every meeting.

A board that has agreed to watch a number will give you the years the work takes. A board that was sold a quick win will not.

Where to start Monday

Calculate second-gift conversion. Bring it to your next leadership meeting. Then pick the single easiest of the three moves above and run it for one quarter with the donors who gave for the first time this year.

You will not fix the donor base in a quarter. You will find out whether your organization can do this work at all, which is the more useful thing to know.

 

This post is the practical companion to Issue #3 of The Social Prophet, which looks at why grassroots giving is collapsing and what the sector traded away when it chased larger gifts from fewer people. Read it at thesocialprophet.org.

Common Ground Consulting works with nonprofit and foundation leaders on strategy, governance, and the funding models that have to change. If you are having this conversation with your board, get in touch.