5 Mistakes Nonprofits Make While Building Donor Loyalty

January 30, 2019 - 9 minutes read

According to the Fundraising Effectiveness Project report, only 45.5% of donors make a gift the year after an initial donation. That means nonprofits lose more than half their donors right after their first contribution.

Moreover, this number has remained below 50% for the last decade.

Increasing your donor retention rate by just 10% can help your nonprofit grow immensely and achieve its goals faster. And when you connect with your donors and build relationships, you can yield better results over time.

So what’s the first step that you should take to improve retention rates? Donor loyalty.

For building donor loyalty, you need to understand your donors’ motivations, communicate with them, recognize their support, steward their gifts, and keep them engaged. In this article, I will take you through the common mistakes nonprofits make while trying to foster loyalty among donors and how they can fix their errors.

#1 You’re Not Customizing Communications

A common mistake nonprofits make while communicating with donors is not keeping their interests in mind. Doing so, you’ll lose your donors in the long run.

Personalized communication is key to building donor loyalty. It not only makes donors feel valued and connected to your organization but also tell your donors you know them and care about them. By sending information that’s pertinent to their interests, you make them feel like they’re not just another number on your outreach list.

Use tools like peer-to-peer texting or phone banking to collect donor information right from the time they first interact with your organization. This information forms the basic foundation for your communications. Identify why they give through feedback or surveys, look through their social media, and make a list of their giving behavior. Use this information to segment your donors into different lists based on their interests and support and then target your outreach accordingly.

So the next time you have to make an appeal or invite them to an event, you can create different messages for each segment. The point is to customize it enough to evoke a response.

#2 You’re Not Focusing On Relationship Building

To build donor loyalty, you need to connect with your donors on a personal level and focus on each person as an individual. The more connected a donor feels, the more they identify themselves as loyal supporters and continue giving. The best way to nurture this relationship is through peer-to-peer conversations.

When donors receive a personal text from an actual volunteer or staff member as opposed to generic emails, they’re more inclined to respond. These conversations act as a driving force to get them to take a particular action like attend an event, donate, or volunteer.

With the help of peer-to-peer texting, you can tailor your message while managing hundreds of conversations at the same time.

#3 You’re Not Providing Different Ways To Get Involved

Have you ever thought to yourself –– “I can’t ask someone who just donated to volunteer their time as well.” If you have, you’re definitely not alone.

Most nonprofit organization have separate databases for donors and volunteers but this shouldn’t be the case. In order to build and sustain relationships with donors, you need to get donors to do more than just contribute money.

Research shows that there’s an empirical link between donating and volunteering. That means, on an average, your volunteers are more likely to give ten times more than non-volunteers. In addition, 70% of people who were surveyed said that they’d volunteer for the organization to which they donated.

Offer them various volunteering opportunities. Customize them according to individual interests to get a positive response. Get them to sign petitions for other causes and ask them to help you run your peer-to-peer campaigns. Your donors must feel like they’re a vital part of your nonprofit for them to stay connected and loyal to your organization.

#4 You Don’t Thank Donors Personally

If your donors receive only a generic thank you after they donate and never hear from you again, you’re missing out on a valuable opportunity to create a personal relationship and cultivate them.

Personal touches matter a lot in building donor loyalty. And it’s essential for those touches to transmit a heartfelt sense of appreciation. Only then will you be able to create a “wow” experience which will keep them from forgetting you.

To make your thank you’s more personal and prompt, you can do two things. One, get on the phone and call your donors, both large and small. Genuinely thank them for their support and contributions. They’ll definitely be pleasantly surprised by the call as they would be expecting an auto-email and not a phone call. This would work well for small nonprofits. Large nonprofits, on the other hand, has a large donor base and calling all their donors isn’t feasible. Instead, they should focus on calling their most important donors to foster loyalty.

Two, send text messages. You can personalize it with custom fields which are used to add additional information about your donors that you want in Callhub. For example, you can have a custom field for donation amount and text donors thanking them for their contribution with that tag. Hey {first_name}, this is {volunteer_name} from {organization_name}. I’d like to personally thank you for donating {donation amount} for our clean water initiative. Our campaign wouldn’t have been a success without you.

#5 You Aren’t Specifying The Impact Of A Donor’s Gift

Even a one dollar donation is better than nothing, right?
It’s more than what you started with. So why aren’t you specifying what a dollar could do for your cause?

Your donors want to know (1) how you’re going to use their gift, and (2) what impact has it helped you create. So, you need to focus on demonstrating this.

Telling large donors what their donation has helped you achieve is a good start and you’re probably doing this already. What you need to focus on doing is telling small donors what a small donation amount of $10 will help you achieve. This must be addressed in your email newsletter after you’ve achieved your goals or while you thank the individual donor for their contribution.

For example, Nothing But Nets tells donors that a small donation of $10 will buy a bed net to protect someone from malaria. This shows donors the tangible results that just a few dollars can achieve; motivating them to keep contributing.

Ultimately, donor loyalty all comes down to building a personal relationship with your donors. Donors want to feel that they’re a valuable part of your organization. And when you focus on seeing donors as individuals with different interests, you’ll be able to create the perfect donor experience which will result in loyal supporters.