Whether you work for a small charity or a global nonprofit, you have to deal with the challenge of lapsed donors.
According to the Fundraising Effectiveness Project, most nonprofits lose around 40-45% of their supporters each year. So what can you do to prevent donor lapse and retain more of your donors year after year?
Lapsed donors are donors who gave to your organization in the past but have stopped after a certain length of time. Most nonprofits consider a donor “lapsed” if they haven’t given in the past 12 months. The good news is, that just because a donor has lapsed doesn’t mean he or she is a lost cause.
Read on to understand why your donors are lapsing, how you can prevent it, and what you need to do to win them back.
The Cause: Why do Donors Lapse?
Donors stop giving to your organization for a variety of reasons. Sometimes the cause is beyond your control, such as when a donor passes away. But in most cases, it can be traced back to something your nonprofit did—or didn’t do.
Here are five common causes of donor lapse:
- Poor stewardship: feeling unappreciated is arguably one of the top reasons a donor stops giving
- Shift in priorities: Your donor may be focused on another charity and no longer views yours as a philanthropic priority
- Damage to the relationship: a simple mistake such as a misspelled name could offend your donor to the point of giving up on giving to your nonprofit
- Feeling they didn’t make an impact: if donors don’t see the impact they’re making, they may think their gift is not needed
- Change in circumstances, such as a job loss or relocating, could cause a donor to lapse
The Prevention: Donor Stewardship
Now that you know what’s causing donor attrition, how can you prevent it? Simple. It all comes down to providing a world-class donor experience.
The first preventative measure may seem like a no-brainer, but many organizations fail to get it right: proper donor stewardship. Thanking your donors promptly and properly is key to making them feel appreciated. If you get this wrong, your donor will likely take his or her generosity elsewhere.
Always thank your donor within 48 hours after receiving their donation, no matter the size of the donation. Your thank you letter should be personalized with the donor’s name, gift amount, and the fund or campaign they supported, and should convey warm appreciation for their generosity. Many development offices use volunteers to make thank you phone calls; this is especially meaningful for first-time donors.
After you’ve thanked the donor appropriately, be sure to follow up in a few weeks with a communication that shows the impact of their generosity. This doesn’t have to be an expensive newsletter or flashy brochure. Send the donor an email that links to an article featuring the disaster relief project they supported. Or drop them a brief note along with photos of the new athletic field they helped fund at your university. And don’t forget to leverage the power of social media by posting videos demonstrating donor impact.
With so many charities competing for your donors’ attention, you can easily get lost in the shuffle. Make sure your nonprofit rises to the top by staying in touch throughout the year. Small and large donors alike need frequent engagement touch points so that your mission remains a priority. Whether it’s a donor newsletter, a survey, an event invitation, or a phone call just to check in, the key is to provide a meaningful experience and ongoing connection to keep your donors enthusiastic about your organization and interested in supporting its mission.
Lastly, do whatever it takes to keep your data clean and accurate so that you don’t end up sending a “we miss you” message to someone who has just given to the appeal, or send an event invitation to a deceased family member. Faux pas like these often lead donors who are already on the fence to stop supporting your organization entirely.
The Cure: How to Re-Engage Lapsed Donors
Creating a lapsed donor campaign to re-engage former donors isn’t as difficult as you might think. It simply boils down to establishing a connection, making them feel appreciated, and taking a donor-centric approach.
When writing your lapsed donor letter (which should be combined with a lapsed donor email series), make the letter warm, personal, and moving. Remember, these folks have already supported your organization; you don’t have to sell your organization from scratch – you just need to remind them why they gave in the first place. The message is not about giving them a guilt trip, but rather an invitation to partner with your organization to further the mission they already support. Your letter should:
- Start off by thanking them for their charitable spirit and support of your cause
- Remind them of their impact; citing specific, tangible examples of how their donations are used
- Tell them a moving, heartfelt, story and make the hero by reiterating how their renewed support will make a difference
Your donor’s preferred way of giving might change over time. An effective way to attract donors back to your nonprofit is to offer multiple ways of giving in your lapsed donor letter, for example you can mention Donor Advised Funds, planned gifts; gifts of stocks or bonds; and company matching gifts.
Another opportunity is to learn why your donor lapsed in the first place. Creating a lapsed donor survey to better understand why they stopped giving is an excellent way to connect and make them feel valued. A few questions to ask include:
- What motivated you to give in the past?
- We noticed you haven’t given recently – is there something we can do better?
- Is there anything we can do to help increase the likelihood that you’ll support our mission in the future?
Donor lapse is unavoidable, but that doesn’t mean it can’t be improved. With a good strategy in place, you can prevent donors from lapsing and have a plan in place in case they do. Before long you’ll improve your donor attrition rate and be on your way to building a healthy, sustainable fundraising program.
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