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Charities failing to plug the donor holes

Fundraising | 6 Jan 2011

For all the talk about preventing lapsed donors, many charities still aren’t on top of retention, says Barry Floyd.

I’m not laying claim to anything hugely original here; preaching about lapsed donors has been done before – but yet it remains a big issue.

Some not-for-profit organisations have taken huge steps to prevent lapsing and to reactivate people who have lapsed. To those that have, I salute you.

To those of you who have not taken measures to plug the holes in your donor file, now would be a very, very good time to do so.

I’ve always had a bit of a problem with the term ‘lapser’ or ‘lapsed donor’. Not just because, as a fundraiser, they cause me to break into a cold sweat but more to do with the fact that we use them as labels at all.

The word ‘lapser’ sounds a bit accusatory. Like the donor is somehow to blame for their lack of action. That they have failed by not responding to our lovingly and carefully constructed approaches.

Would ‘uninspired’ not be a better and more accurate term for them? I mean, if they’ve stopped giving to your cause it’s you after all who is failing to inspire them.

Or maybe you could call them ‘unappreciated’. Think about your communications following their gift. Did you thank them warmly and engage them by describing the impact their gift would have on your work? Or did you just send them an afterthought ‘thank you’, a receipt or a request for them to gift aid their donation?

The great 'unknown'

But for many of us, the best description of a lapser would be ‘unknown’. Why? Because most of us, for one reason or another, never seem to find out why an individual stopped giving to our work. In many cases we fail to engage with the donor on their terms so they stop giving. Then, when we have a chance to engage with them – to find out why they ceased giving so we can stop the same thing happening with others in future – we fail to engage with them again.

But this isn’t about beating ourselves up about all the things we’ve not done to stop our donors lapsing. It’s about doing something now. We know many of the reasons why people lapse. For many notfor- profits, it’s a case of pulling this knowledge together and having a dedicated resource allocated to lapsed donors.

At this point, some of you may be throwing your arms in the air or muttering that this is a time of cutbacks and that I should start living in the real world.

Think about it for a moment: take the sector benchmarks and say you run a cold mail campaign and attract 1,000 new donors at a net gift of £50 each. Now let’s say that 50 per cent of those people don’t go on to give a second gift. That’s £25,000 that you’ll never see again.

Now imagine you have a dedicated resource to stop the leaks from your donor file. They would work with your donor development and donor acquisition teams on messaging, to analyse your lapsing trends to try to put an end to those things we know causes donors to lapse.

I’m not naïve enough to think that every organisation could employ a retention specialist. But what I don’t understand is why more thought isn’t given to it by organisations that use direct marketing as a fundraising tool?

I suspect that because we’re all hardpressed and time is at such a premium, it’s simply easier to put more money into acquisition than to employ specialists to improve lapser rates. Of course, some organisations simply cannot afford to employ someone specifically in this role. If that’s the case, regardless of how pressed for time you are, your fundraisers certainly need to start listening to your supporters and put some serious thought into stemming lapse rates.

Retention is almost always more cost-effective than acquisition and in the current economic climate, you’ll ignore that fact at your peril.

Barry Floyd is a consultant at John Grain Associates 

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