Blog

Flat Is The New Up?

by | Jan 12, 2022

(Is it just me, or is anyone else nervously awaiting the “final” perspective on the 2021 Year End Campaign?)

I was able to sit in on a presentation of the Q3 2021 donorCentrics Index of Direct Marketing Fundraising from Blackbaud Target Analytics yesterday, which I found to be a good antidote to my current state of uncertain agitation.

Four big take-aways stood out to me.

1. It’s a mixed bag out there.

Admittedly, the uncertainty is a bit broader than the recent Year End campaign. The report pointed out that while GDP continues to climb, consumer sentiment is beginning to fall. We don’t know what this portends.

The picture for Q3 was similar for non-profits. While most (78%) of the participating organizations saw an increase in revenue and nearly all (97%) an increase in revenue per donor, only about half reported more donors (49%) or more new donors (53%). Of greater concern, only about a third saw an increase in donor retention (39%) or reactivation (31%) rates.

2. Keep some perspective.

For many organizations, even a slight dip this year follows big gains last year. Consider new donors, for example. The donorCentric report for Q3 last year showed a 20.8% increase in the number of new donors. But in Q3 this year, the 1st-year retention rate is down 1.5% (keep in mind, that’s a percent of a percent).

Let’s do the numbers on that. An organization that typically acquires 100 new donors a year would have acquired 121 in 2020. If they typically retain 25% of first time donors, that’s 25 donors in year two. If that retention rate drops 1.5% (now 24.996%), roughly 32 of the 121 new 2021 donors could be expected to give … which is still an increase of seven over the typical year.

It’s helpful to compare this year’s results not just to last year, but the prior year as well. Perhaps to the last five. Of course this assumes you’re keeping that data available …

3. What matters most?

Which points of information are most important to you? Is it the number of new donors? … repeat donors? …total donors? …revenue per donor? …total revenue? Remember, each of these is just a snapshot and one may affect the other. An influx in new donors, for example, will likely result in lower average revenue per donor. An increase in sustainers, on the other hand, will push the average revenue per donor up.

As you look to 2022, we recommend setting specific strategies to address specific issues or concerns. If 1st year retention rates are lagging, for example, what actions can you take? Can you “beef up” your thank you program for new donors (perhaps include a phone call from a board member)? If average revenue per donor is falling, perhaps you can tweak your major gifts efforts, or put more emphasis on acquiring sustainers.

4. How will you stay engaged?

These are challenging times. Organizations that relied on events or other in-person activities to raise revenue, boost relationships or acquire new constituents must now find alternatives. How will you maintain a relationship with those individuals who believe in and are committed to your mission? What is relevant, meaningful and manageable … both for you and those individuals?

We recently posted another article about a fascinating Blackbaud report entitled “Tipping Point,” that examines what the company sees as an all-encompassing transformation of the fundraising industry. Check it out!

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