Donor retention is king in fundraising, right? It’s critical that we keep our donors interested in the cause so they can continue to support our organization’s work. It’s less expensive for the nonprofit and more rewarding for the donor.
This is certainly true in direct marketing and annual giving. Donors with higher renewal rates not only provide more net income for the cause, they also are more devoted, more engaged donors. Many provide sustained support in the form of monthly giving and legacies.
However, true major gifts is something apart from this. While there are major gifts programs that depend on high-dollar annual giving, this really isn’t reaching the potential of what major gift giving should be. True major gifts are not the same as your highest annual gifts.
Major gifts at their best are really big, game-changing, transformational gifts.
Major gifts don’t always come on an annual basis. They don’t always come at the end of December and they don’t always have a predictable curve of upgrading.
What’s more, if you measure the retention rate for major donors, it may not compare favorably with the rest of your donor base.
Think about institutional foundation giving. Foundations are often interested in one cause for a few years, pour a lot of money into it and then they change their focus. It’s the rare one that stays with an organization for a long period. They make a big difference, hopefully sustain it for a little bit, but then they move on.
Your major donors may do that, too. But this lack of “retention” should be seen as normal and in fact, desirable in some ways.
If you put the major donor in an annual giving box, you miss the opportunity to build a really meaningful relationship with the donor that could culminate in something really BIG for your organization.
Instead, your major gift team should be focused on what the donor is looking for – and that can take some time to develop. So, instead of sending that annual renewal of $10,000 or $20,000, think about a relationship that might take more than a year, but might end up being millions for your cause.
I have a great example from past experience. There was a donor I knew who was giving a solid $15,000 a year and it was great. The temptation was to leave him alone as he was a dependable contribution to my portfolio. But when I visited him, I knew he was up for more, we just had to tap into what he really wanted to do.
So, after getting to know him for a while, we crafted a proposal that was a big jump and we were clear – we weren’t asking him for an annual gift this year, we wanted to talk about something deeper. After two years, this ended up being a gift in the seven figures. The donor was thrilled and our organization got to do something that really moved the needle for our cause.
But you know what? That donor didn’t just settle down and give again the next year. He was thrilled with the gift and we saw him regularly, but his next gift was not for several years and it never (as far as I know) settled back into the $10,000 per year.
But that was a MAJOR gift. A truly transformational gift that made a huge impact for our cause and for the donor as well.
So, yes, retention is key in fundraising overall, but in major gifts fundraising, it isn’t the critical factor. At best, an over-focus on retention for major donor can get you measuring the wrong things. At its worst this focus can inhibit the true potential of your donors.
Instead, keep these four things in mind: