Posts Tagged ‘attrition’

Nonprofits: Don’t raise a dollar unless you plan on keeping it

According to Ken Burnett, “Our nonprofit sector is bleeding to death. We’re hemorrhaging donors, losing support as fast as we find it, seemingly condemned forever to pay a fortune just to stand still. It’s time we stemmed the flow.”

It’s understandable why Retention Fundraising author Roger Craver chose Burnett to write the forward for this book. Burnett brings the right amount of warning to the issue. Burnett is right. Our social sector is in dire need of determined action to diminish donor attrition.

Why?

A few of the many reasons include the following: Attrition costs our organizations billions of dollars and effort. It suffocates the other mission-related work we’re trying to do. It undermines the sector as a whole. Unfortunately, many fundraisers accept low donor retention as a fact of life.

Roger Craver says it doesn’t have to be that way. Craver has unpacked the answers to many of the challenges nonprofits face with attrition such as shifting the fundraiser’s focus to what matters most to donors, overthrowing retention barriers, responding efficiently and more.

Thanks to a study of more than 250 organizations, Craver and his collaborators have introduced a framework for boosting retention and the lifetime value of donors. This framework is the foundation to improve each of the retention issues he presents, from redefining loyalty to understanding authentic engagement.pinterest-com

We asked Craver about how to make a case for retention activities if you need to enlist your colleagues and leadership in the process. We also had him share insights on the metrics you should measure:

CausePlanet: How do you convince nonprofit organizations that focusing on donor retention is worth the extra time, effort and expense?

Craver: Year after year for the past decade, donor-retention rates have been sinking. Today, they’re at an all-time low.  According to studies by the Association of Fundraising Professionals, every $100 raised from new donors was offset by $100 in losses because of attrition. All this despite the facts that organizations have

– a 60-70 percent chance of obtaining additional gifts from an existing donor.

– a 20 to 40 percent chance of obtaining an additional gift from a recently lapsed donor.bloomerang-com

– but less than a 2 percent chance of obtaining a gift from a prospective donor (actuation).

So one thing should be glaringly obvious. The bulk of an organization’s fundraising spending should be aimed at holding onto and building relationships with existing donors, not in acquiring new ones. It’s called “retention.” Unless an organization’s goal is to never grow and eventually decline, the failure to focus on retention is ultimately ruinous as the organization’s support shrinks like a raisin in the sun.

CausePlanet: Would you talk about how the metrics you have developed (lifetime value, etc.) help a nonprofit track its fundraising and justify its time and effort?

Craver: There are some fundamental metrics that serve as a sort of fundraiser’s GPS—Retention Rates and Lifetime Value. They quickly and easily indicate whether an organization is relevant to its donors.

Number of new donors making a second gift: A harbinger if not dead-on predictor of the retention rates and Lifetime Value an organization is likely to enjoy in the future.

Number of new donors retained into the second year: If you ask and answer the question as to why so many donors leave the first year and what your organization is doing to lose them and hold them, you’ll be on a true track to growth. Fail to answer them, and it’s more of the same.

Multiple Year Retention Rate: Same as above, but by tracking these year by year you can spot trends, problems and opportunities. Why? Because year-over-year comparisons of this metric will trigger additional questions and answers for improving your program.blog-capterra-com

Lifetime Value of a Donor (LTV): At the end of the day all the actions you take to improve retention, average gift and donor commitment will be reflected in the Lifetime Value of each donor and all donors collectively. This is the key metric on which you can benchmark, guide and then track the success–or failure–of your intermediate and long-term strategies.

There’s never been a better time for Roger Craver’s book. Why let one more hard-won donor leak through the bucket when instead, she could be a lifetime supporter of your organization. Simply put, calculate the cost of repeated acquisitions versus the renewal of a donor who is predisposed to support you.

Craver provides countless data-based methods for retaining donors including Cliff Notes to his own advice at the end. From what drives donors to stay to what prompts them to leave, Craver makes it impossible to look the other way on retention–and your nonprofit will be better for it.

See other book summaries related to this title:

Fundraising the SMART Way™: Predictable, Consistent Income Growth for Your Charity + Website

Fundraising When Money Is Tight

Influential Fundraiser: Using the Psychology of Persuasion to Achieve Outstanding Results

Image credits: blog.capterra.com, bloomerang.com, pinterest.com, retentionfundraising.com

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Why employees leave: Retention strategies for nonprofits


I recently heard a story about an employee who received a very enthusiastic call from a headhunter trying to recruit him for a job. The employee said he wasn’t looking to leave the organization, to which the headhunter replied, “You are on my list of employees to be downsized, so you will be leaving the organization.”

I hear stories like this on a regular basis. Many employers badly betray the loyalty of good employees, yet developing employee loyalty and holding onto good employees will be crucial for all employers in the next ten years. The number of people born between 1960 and 1980 who are in the workforce is half the size of those born between 1940 and 1960, as well as of those born between 1980 and 2000. This shift from having enough employees to too few will hit nonprofits especially hard, as they struggle to compete against the private sector that can pay more for the best employees.

The good news is that retaining employees isn’t expensive or complex. And, in the nonprofit sector, most employees work to support the vision and mission of the organization, not for extrinsic rewards. The main reason employees leave an organization is bad relationships. Employees will stay when the quality of their supervision is good, and they will leave when they feel mistreated by their immediate supervisor. Symptoms of a poor supervisor include high turnover in the supervisor’s area, complaints of mistreatment to Human Resources, or more absenteeism in that supervisor’s area. Supervisors are often promoted because they were good at their last job, not necessarily because they make good managers. If a supervisor isn’t strong, find other work for that person that takes advantage of his or her skills. Or, spend time developing the supervisor’s management skills.

Employees in all sectors report higher retention rates when their employer values and rewards them for who they are rather than for what they do. Employers can show that they value who an employee is by providing training, opportunity for advancement, work/life flexibility, feedback and communication. Does your organization set individual goals with employees and then provide the support and training needed to meet those goals? Once the employee begins to achieve those goals, is there opportunity for advancement? This can mean a promotion as well as the opportunity to take on other, more meaningful work—which is often rated as a high motivational factor for employees. These practices are neither revolutionary or expensive, but they are proven to hold onto employees. Here are a few suggestions for developing some of them:

Communication

Organizations can’t communicate too often. Employees want to feel that they are “in the loop.” An employee should never hear about a layoff from a headhunter or the local media. Instead, use whatever internal mechanisms you have—email, voice mail, the employee newsletter, bulletin boards and meetings—to tell employees what is happening. This doesn’t mean you divulge information that is sensitive. Determine what you can tell—and then tell, tell, tell.

Feedback

Employees crave positive feedback, and most don’t get much. Studies report that for every four items of “corrective feedback” employees get, they only receive one pat on the back. While employees deserve to know when they are missing the mark, one rule of thumb is to turn those numbers around and praise an employee four times for every one piece of corrective feedback. You will be amazed at what a difference in morale this creates.

Flexibility

Be as flexible as you can. Can you have employees work a flex schedule, where some employees report to work early and others stay later? Can you have some employees work at home one day a week, or can you pay for one extra holiday a year? Employees report higher retention rates at organizations where employers help them balance their work and personal lives.

Quality relationships

Employees also report that the quality of their co-worker relationship is an important consideration for staying with an employer. There is often a correlation between high productivity and cohesive work groups. Make sure you have a well-established problem resolution process. If you see a work group floundering, consider using an internal or external facilitator to help the group move beyond what is keeping them stuck.

Retaining employees reduces turnover costs and allows you to hold on to the talent that makes your organization unique. Retention strategies don’t need to be expensive; they just need to be implemented and supported.

See also:

Winning with a Culture of Recognition

Nine Minutes on Monday: The Quick and Easy Way to Go from Manager to Leader

Fired Up or Burned Out: How to Reignite Your Team’s Passion, Creativity and Productivity

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