Donor loyalty key insights from Hilary Noon

[Podcast] 3 Keys to Donor Loyalty from a VP of Insights, Analytics and Experience, Hilary Noon

Noah Barnett

On this episode, Hilary Noon joined us to talk about the first-ever Donor Loyalty Benchmark Study, why donor loyalty is a metric fundraisers should be pursuing and a few practical insights nonprofits can use to cultivate donor loyalty.

Hilary has committed her entire working life to serve with and on behalf of nonprofits. She is now the Executive Vice President of Insights, Analytics and Experience at Pursuant, a mid-size, comprehensive fundraising and marketing agency that works exclusively with nonprofit organizations to drive engagement and growth. Previously, she ran Analytics and Insights at the national level at the American Cancer Society.

3 Keys to Donor Loyalty, from a VP of Insights, Analytics and Experience

Everyone is trying to crack the donor retention and donor loyalty puzzle. Why do some donors give for years, and others only once? How can data inform the connections we build with donors? Hilary offers lots of useful advice in this episode, starting with these four key takeaways.

1. Data Drives Donor Loyalty

While Hilary was working at the American Cancer Society, she realized there was no reason she couldn’t start to measure something like the “customer experience” of donors. “It sounds very squishy to people and everybody nods their heads and says, “Yeah, of course we want to create a good experience.’ But when you actually peel that back, people don’t really understand what that looks and how it actually translates into revenue,” Hilary says.

Hilary found that she could translate the donor experience into a metric, and use it to forecast revenue. This data helps nonprofits understand what donors connect with and why they continue to give.

“We have to be able to create better connections,” she says. “We have to rise above that noise and help a donors, first of all, choose our cause, but then also want to continue to support for the long term because they feel that emotional connection and because they feel that loyalty and that bond.”

To get started with data-driven donor loyalty and retention, first you have to understand what your giving metrics are. What’s your donor retention rate? How many givers only give once? What are the differences between long-term givers and one-time givers? Once you know these things, you can start building better connections.

2. Understand What Drives Donor Behavior

In the midst of all this data, Hilary reminds us that we’re still talking about very human behavior, not just numbers. “ I think stepping back and understanding that these are people, these are humans with emotions and motivations and personal stories…those are the things that ultimately drive behavior,” she says.

Numbers will only get you so far without considering the human element. “Getting that discipline around data is extremely important but don’t let it keep you from doing things right. And don’t let it also stop you from having the contextual conversation about the human side. Both sides are extremely important,” says Hilary.

After you’ve established your metrics, dig deeper into the behavior, looking for the “why.” “If you can understand that instead of just focusing on the behavior itself, whether you’re doing a motivation-based segmentation, or you’re simply talking to donors and trying to understand what’s behind some of those or looking at data in terms of where they first came in. All of those things are I think are much more important than the outcomes,” she says.

Does meeting program participants make donors feel more connected? Do donors who came in from one means of acquisition stay longer than others, because that acquisition strategy used memorable visuals? The more you understand why something works, the more precisely you can communicate and the more valuable you can be for your donors.

3. Commit to Long-Term Value for True Donor Loyalty

Donor loyalty isn’t built in a day. It requires investment, and a commitment to the long haul. Some of the activities that increase donor loyalty, like communications and thank you calls, don’t have immediate ROI. That doesn’t mean you should abandon those activities, but you may need to help leadership understand how those activities fit into a long-term strategy.

“I think for those of us who are in those leadership roles, for a Chief Development Officer, Chief Marketing Officer who is responsible for educating their board and CEO and their CFO, honestly about what this means,” Hilary says.
“Having that commitment and being able to help translate for those leaders what the bottom line impact is going to be…is extremely important.”

If you’re not already calculating donor lifetime value (DLV) at your organization, it will help you to start cultivating a long-term worldview. “We propose a fairly simple calculation for how to get there in the study,” Hilary says. “Then begin to translate any strategy that you’re working on into the impact that it will have. Draw that connection between retaining a donor, retaining a certain type of donor over the long term.”

Virtuous · Hilary Noon, EVP at Pursuant, Talks Donor Loyalty

Full  Transcript

Hilary Noon: There was no reason why we couldn’t start measuring something like customer experience and really unpacking what that meant. And it sounds very squishy to people and everybody nods their heads and says, “Yeah, of course we want to create a good experience.” But when you actually peel that back, people don’t really understand what that looks and how it actually translates into revenue.

Noah Barnett: From Virtuous I’m Noah Barnett and this is the Responsive Fundraising Podcast. A show where we talk with fundraising leaders and thinkers to uncover how today’s top nonprofits craft remarkable donor experiences and build lasting relationships at scale.

In today’s episode, I am joined by Hilary Noon, who is the Executive Vice President of Insights, Analytics and Experience at Pursuant. She’s been at Pursuant doing analytics for four years but has spent her entire career helping nonprofits think about how they can build donor loyalty, which is exactly what we’re diving into.

She just recently released a new benchmark report that talks about how do you actually craft and create donor loyalty amongst today’s donors? It’s an incredible conversation and you don’t want to miss it. So let’s dive in. Hey Hilary.

HN: Hi. Hey Noah. How are you?

NB: I’m doing awesome. Thanks for joining us so early in the morning. I know I’m East Coast, I’m about to have lunch and you just woke up, as I can see.

HN: Not a problem. Got my coffee.

NB: Awesome. And I know as we speak that same language, but for those that aren’t familiar with Pursuant, just share a little bit about Pursuant before we dive into the conversation today.

HN: Sure. Yeah. Pursuant is a midsize fundraising and marketing agency. We work exclusively with nonprofit organizations and we really cover the entire donor pyramid. Our focus is on data-driven insights that then can be applied to driving long-term value. So our emphasis in a lot of the things that we do is all about how we can build those connections, deeper connections with the individuals who are passionate about the causes that we all work for and support.

NB: Absolutely. And that’s so important to be data-driven, especially now. And you guys definitely come alongside of organizations to help them uncover those insights within their data and then ultimately implement that.

But before we dig into the data and the research study and all of that, I want to take a step back because I think it’s important because Hilary, I know you’ve been at Pursuant for four years, but you were at the American Cancer Society before that. And when I look at your LinkedIn, you’ve really been in the “doing good business” your whole working life.

HN: I have.

NB: What sparked you to commit to that though? That’s not like, “I want to just go do this for the rest of my life.” But what pushed you down that journey?

HN: Yeah, it’s a great question. And I was reflecting on that and sometimes you end up taking a path that you didn’t quite expect. But I really think it comes back to how I was raised and my parents were always focused on giving back.

We were very involved in our church and then we also did a lot of volunteering and donating to different causes, going to museums and things like that. And I remember every year around the holiday time we would sit back and actually look at the different organizations that we were going to support for the next year. And then that discipline was just in me. And I don’t think I quite realized it until I was thinking about that with other people and talking with other people about how they wanted to pursue their careers.

And so I didn’t necessarily seek it out, but I always really liked the idea of bringing business concepts that I was learning in school, and in college, and my graduate programs, and applying that back to nonprofits because I felt I wanted to use my power for good, if you will, use the work that I had done and the things that I was seeing in various different areas that I was working in but apply those back to the nonprofit space.

And so I got my first job out of graduate school in a nonprofit organization and just kept going from there.

NB: Absolutely. And it’s so interesting how every time I ask this question, it really goes back to a story whether it was in high school, or college, or in your case, basically from the womb. You came forward because of your parents.
It’s this idea of generosity or something that was instilled in you by something. Whether you were given something that introduced you to that, I love unpacking that because I think there’s a shared story there.

I spent seven years working in international relief nonprofits running growth, and my story is very similar except later in life. I was just, “Hey, I want to do marketing, but I want to go do that for good.” If people can create products that make people stand in line for six hours in the middle of the morning, how can we not use those same concepts to really drive the most important causes forward because I was getting my motivation there too?

HN: It’s so funny that you say that, because whenever you listen to a brand expert in the commercial space they’re always talking about creating emotional connection. And I feel that’s an example of where nonprofits, we have a leg up on commercial. Because I mean, we are all about the emotional connection–we’re saving lives. We’re transforming people and transforming society and so we should be able to create that emotional connection much more easily than a commercial product.

Why is Donor Loyalty Important?

NB: Absolutely. And I think that’s where I was going with that, is that this idea of cultivating generosity through this emotional connection to a cause and bringing people into that experience is so essential. I think sometimes we get so caught up on running that next list, and that next segment, and sending that next appeal and sending that email blast.

And I think it’s interesting, the words that we use as an industry to describe our actions, at end of the day its how do we draw people like you were into the cause ecosystem? Maybe it’s through your childhood, but then into emotionally connecting with those causes, and then make that a habit over time as well. And that’s not something that’s really talked about and I know we’re going to talk about that emotional connection or how do you build that as part of today’s conversation?

Because you guys actually just released at Pursuant the first-ever Donor Loyalty Benchmark Report. And this whole idea of donor loyalty is really interesting because we have customer loyalty. We know what that means. We have our customer loyalty cards, we might get discounts or maybe we’re just brand evangelists for “I love Patagonia” or other brands that I’m loyal to regardless. And I’m an advocate for them, but I hadn’t heard this phrase before on referring to donor loyalty.

So I want you, if you could, to share a bit about the study and what led you to invest in making this report happen.

HN: Yeah, sure. So, I mean, you made the point that there’s this real nice bridge between talking about emotional connection and talking about what that does for loyalty, and that’s really what drove us to want to do something, this report.

I personally have been very passionate about this concept. I felt while I was working at the American Cancer Society there was no reason why we couldn’t start measuring something like customer experience and really unpacking what that meant. And it sounds very squishy to people and everybody nods their heads and says, “Yeah, of course we want to create a good experience.” But when you actually peel that back, people don’t really understand what that looks and how it actually translates into revenue.

So that’s what I was able to do with the American Cancer Society, was actually translate the experience that people were having, the measurement of that experience, into forecasting revenue. And so we were able to draw that connection and I wanted to bring something to the broader sector, and really understand what the drivers were for experience and for long-term loyalty for different types of nonprofit organizations.

Because I felt a big part of our job today in this very crowded nonprofit space where donors are changing and evolving the way that they give, we have to be able to create better connections. We have to rise above that noise and help donors, first of all, choose our cause, but then also want to continue to support for the long term because they feel that emotional connection and because they feel that loyalty and that bond.

So that was some of the impetus for creating this report. We see a lot of studies around loyalty and retention within specific channels. You see studies on online versus offline. There are benchmarking studies out there about direct response and about peer-to-peer events, but you don’t really have anything that steps back and says, “But what are the drivers of loyalty to an organization overall?” And so that’s what we were seeking to understand.

Why are Donors Loyal, or Not?

NB: Yeah. And I think that idea that you mentioned on the nonprofit’s role is really to connect with donors and then obviously keep them connected to the cause. And that’s really why we are doing this podcast because we want to illuminate some of those strategies.

We’ve done research here where we have unpacked some of the variables that say, “Why donors keep giving and why donors stop giving.” And it does relate back to that connectedness. And we took it a step further and looked at some relationship science and was like, “How do you actually drive connectedness?” Not just in a brand to human relationship, but then the human relationship, because we fundamentally believe giving is so deeply personal.

And that’s what landed us on responsiveness, but we believe that responsiveness actually drives loyalty. You really share four key insights, but I would love for you to unpack those and specifically what listeners should do in response to those.

Leaders are always hearing retention’s down or number of donors giving to charities is down and this, that and the other, what I love about Pursuant is you always try to turn that into an action. It’s not just a reality. But it’s like, “What’s the response?”

So let’s start with number one, which was that the majority of donors transact with organizations. And I love the use of the word transact. So unpack what transact means and why do you think this is?

HN: Yeah, this was one of the metrics that we did not seek to measure from the outset but came out of the data and was a bit of a surprise to us.

So we were looking at number of gifts in a donor’s lifetime as part of the input into measuring lifetime value. And what pops up was the sheer number of, or the portion of, individuals who only had one gift in their lifetime. Just, I mean, let that sit. One gift in their entire lifetime. And we’re looking at 10 years of data with the participating organizations. And so 62% had only one gift in their lifetime, which was stark to us.

So we use the term transact because really that represents what must have been for them, a transaction. Either they were asked by somebody to give, or they were doing perhaps a little test gift, or they were literally just transacting in some way to give a gift to this particular organization.

So that was a bit of a surprise to us and led to a bunch of other questions and leads to quite a bit of dialogue in terms of when we share this information. I mean, I think for me, the next round of analysis that we wanted to do was understanding how that population was different than the population that did have more than one gift. What was it about those individuals that caused them to want to be connected to these organizations?

We were able to see that a majority of those who only had one gift in their lifetime were associated with peer-to-peer events, which makes sense in some ways because they’re typically not directly connected to the cause, but they are more connected to a friend or family member.

So I think, to get to your question around “What does an organization do about this?” I think, first of all, it’s understanding what that metric looks like for you. Are you looking at that? Are you looking at giving across your organization?

So not just limited to what I’m personally responsible for. Which causes you to break down your barriers a little bit internally, take a look at: Is a donor giving just once to your organization or are they giving in other areas?They may not be retaining to your program, but are they retaining in other ways? And what does that say about how you should be communicating to them and perhaps how you shouldn’t be if you’re only treating them as a one-time donor, for example?

How Do I Use Data to Understand Donor Loyalty?

NB: Yeah. And I love how you said that you shouldn’t just see this and be, “Oh, well, let’s jump into action.” But first starting with the data and say where are we? And I think I saw a stat that less than 50% of fundraisers even know what their donor retention rates are if you ask them. That just came out recently. And I was like my goodness, that’s an incredible number.

So starting with the data is so essential. And then I think one thing that you pointed out because you guys went a layer deeper is that a lot of these donors in the 62% were peer-to-peer donors. The one thing I, and not that that’s the insight, but one thing that I found out personally was that a lot of times when I looked at donor retention when I was running growth, because I was responsible for how do we grow the donor lifetime, so I was looking at these numbers regularly, is that the real insights are when you start segmenting the donors by intent or interest, and not just their involvement–”They gave this much.”

Because that’s where you can start digging in and being, “Oh wow. We found out that the difference between someone that gave first through this mechanism versus this mechanism was actually a 100% more likely to have a 100% increase in donor lifetime value and we were able to see that this program was more sticky because they were onboarding with this.” So what was the intent? What was the interest there?

And we were able to unpack that and actually really start focusing on not why, in our case, all these donors weren’t giving and being like “Oh, well oh, they must have not cared,” or coming up with all these different things. But we actually looked at the other percent who were giving and said, “How do we model some of these behaviors?”

And we got really granular, but I think depending on the complexity of your fundraising program you can get granular or just dig one layer deeper to really find what are the behaviors and actions that donors that are sticking around and staying connected are taking or what are you doing differently with those? Is that similar to what you would recommend?

HN: Yeah, absolutely. I love the use of the term intent or intention. I think stepping back and understanding that these are people, these are humans with emotions and motivations and personal stories, like you started out our conversation today.

Those are the things that ultimately drive behavior and if you can understand that instead of just focusing on the behavior itself whether you’re doing a motivation-based segmentation, or you’re simply talking to donors and trying to understand what’s behind some of those, or looking at data in terms of where they first came in, to your point. All of those things are I think are much more important than the outcomes.

So what we have in this study are very much the metrics, but what you need to then do is start to dig behind that and understand what is driving that behavior. We often talk about understanding the intersection between what people are saying, and perceiving, and feeling, and then what they’re doing because the truth lies somewhere in between.

What is A Coverage Ratio?

NB: Always. I feel that’s always the case, especially in the complex environment that nonprofit leaders are operating in today. There’s so much data, there’s so much competition. Everything is just more complex, and so feeling out those intersections and teasing those out are essential.

And so I think this leads to our next thing, because this is the next insight that you shared in the report. This is something we talk a lot about is that when we say, one thing that we talk about, Gabe our CEO says, is that we feel we’re in the middle of a generosity crisis. And the reason we say that is not because giving is totally down, because if you look at the past 10 years giving has obviously increased, especially in this country overall.

The reason we’ve talked about this is the fact that retention has remained flat, new donor retention is not great, and the biggest factor is that the number of donors that are just opting out of giving to charitable organizations continues to increase.

Depending on what numbers you look at there’s been an 18% to 25% drop in the number of people actually even contributing to the generosity ecosystem. And so we feel major gifts and other things are actually covering up this bubble that currently exists, and that’s similar to what you came out with, with your insight number two, where you said most organizations are covering poor retention rates with large volumes of new donors. So unpack that. What you mean by covering poor retention rates?

HN: Yeah, one of the metrics that we feel is really important for an organization to be looking at on a regular basis is something we call coverage ratio and some of your listeners may be familiar with that.

I think of it as a water table. So every year you start out with a base of donors and you’re looking at how many new you’re bringing in, and then how many are dropping out the bottom as well as how many you’re reactivating from the past. And you obviously want the ones that are new and the ones that are reactivating to equal more than the ones that are dropping out the bottom, so that you’re growing over time.

And so we look at that as at a 100% and we say if you’re over a 100%, you’re doing great and if you’re below, then you need to look at what’s driving that.

Even if you’re over a 100% there’s a more of a story there because you have to understand well, does that mean that I’m just acquiring a lot of people, but they’re churning out the bottom, or am I doing a really good job of retaining them when they come? So it’s looking at those different levels and understanding the story.

I think, to your point, in our study because we did have a few organizations that make the majority of their revenue from peer-to-peer and were getting large volumes of donors coming through, that volume of new donors was masking the fact that they had really poor retention rates.

So as a whole in the study, our coverage ratio was over a 100% but retention year to year in the 2017 to 2018 period was 34% which I think most of us would say is not sustainable.

What Should Nonprofits Do About Poor Donor Retention Rates?

NB: Not at all. Yeah. So what do organizations do? So obviously again start with the data. So what is your coverage ratio, but then what?

HN: Yeah. Then I think it’s stepping back and taking a look at what your objectives are. So if you are shrinking as a whole, if your organization is shrinking and, to your point, in the broader landscape we’re seeing some shrinkage and people philanthropically who are supporting organizations.

So if that’s the case then you probably do need to focus on some acquisition strategies and there’s lots of different ways of going about acquisition and based on the organization and how you bring people into your doors.

You need to take a look at that, and invest in that, and understand what that’s doing for you in the long term. And I think it’s also acquiring the right kinds of donors. So going back to our conversation about the 62% and instead focusing on the balance of that, the individuals who are actually giving more than one gift in their lifetime those are the kinds of people you want to acquire, right?

So if you invest, because we all know acquisition is expensive, if you invest in acquisition, you want to make sure that you’re acquiring people who are going to retain and are going to be with you for that long term.

If, in fact, you’re doing a good job of bringing in donors, like in this case we had a number of organizations that were doing a good job, then your attention and your investment percentage as you’re looking at your budget year to year, needs to weigh heavily on retention and cultivation and stewardship, which we’ve noticed and I’m sure you have to in your work with different clients.

That tends to be something that people cut. Because when you’re just looking at it as a line item and you’re talking about things, whether it’s newsletters, or thank you calls, or what have you, those are the things that don’t have an immediate ROI, right? Because some people give in response to those things, but that’s not the intention. And yet those are the things that build that connection over time and that help donors feel this is why I’m giving and this is what I’m giving to.

NB: Absolutely. And I think that’s a huge factor because donor retention has been well socialized, researched, and really it’s a wrung out topic amongst fundraising circles. We’re not the first podcast to talk about retention and the importance of it. Yeah. We’ve not seen correlated improvements either.

And I think this idea of investment both financially at the executive level to say, “Hey, this is important. We’re going to put money behind it.” But then also just the strategies and doing the work to really map out how adding retention and cultivation plays actually impacts the donor lifetime value. So why do you believe this, outside of maybe just lack of understanding and measurement is there anything else nonprofits can do to at least for them turn the tide on the donor retention conversation?

HN: So we did see some bright spots in this study that I think could lead to some interesting thoughts in this area.
One of the things that I loved about including all different types of organizations so everything from faith-based, arts and culture, health, and education, by looking at all of those different types of organizations you start to understand some of the best practices that these institutions have, who raise money in different ways. They can learn from one another.

So for example, arts and culture and faith, you wouldn’t necessarily put those two together, but they both had really high retention rates when compared to some of the others in the study. And when we peeled it back, their business model encourages regular engagement, right? If you think about faith there’s typically a either a tithing method, a methodology or a discipline. With arts and culture, there’s a regular engagement around specific events or activities, and so there’s this built-in mechanism of engagement and a reinforcement of the mission. So that was interesting.

How Can a Nonprofit Increase Donor Touch Points?

NB: Yeah. I love that idea of that because that’s something that when I was doing consulting with nonprofits, we’d be “How do you actually increase the number of touch points in a value-add way that you have with your supporters?” And you’re right, that faith based or arts and culture have that built-in, but for other organizations, they can actually design these or create these into their cultivation programs. It’s all about that touchpoint. How do you increase the touch points?

HN: That’s exactly right. It’s interesting because American Cancer Society was an example of an organization where we had to create those. And because we didn’t have a physical presence and we didn’t have a natural recurring engagement opportunity.

We did find that when we measured the number, we had an involvement index that we created, when you looked at the number of touches the lifetime value was directly correlated in terms of how much more you would see from those individuals as soon as you added on another involvement with every increasing involvement. It makes intuitive sense, doesn’t it?

NB: Yeah, no, I definitely think it’s like–there was this whole movement a few years back about dating your donors and this idea that if you get them to go on the next adventure, or you get them to maybe spend an afternoon with you rather than just a coffee, those are the types of engagements that are going to deepen that relationship and that connectedness.

And I think one thing that we saw when I was working for the humanitarian nonprofit is that we had key almost milestones in the donor journey where if we got them from 0.0 to 0.3, the increase was huge and then it flat lined again. And then it would increase again when we got to a different engagement point.

Those engagement points for us were if we got them to a donor event, an impact event, because we had a lot of impact events for donors where we tried to connect like-minded people together because we want it to be a community builder around the cause and the philosophy of investment that we were trying to cultivate as an organization. That was a huge increase.

So if we could get them to an event where they engage with other donors that were like-minded, it increased lifetime value significantly. Then we had other engagement opportunities that were bigger than that. But then, if we got them to go on a trip with us basically retention rates were 95% from there.

Once they went on a trip, their donor lifetime value quadrupled and their retention rates were nearly in the 90% range, which is incredible. So I think finding those or creating those in your donor journey mapping is essential, especially today.

How is Donor Loyalty Different in Large and Small Organizations?

HN: I completely agree. The other thing that I think we uncovered, which again makes intuitive sense but was instructive, was the difference between retention rates and other loyalty indicators amongst smaller nonprofits versus larger ones.

We had a group of some of the participating organizations in a room and a couple of the representatives from smaller nonprofits were always feeling they were the little guys at the table and they couldn’t really offer very much.

And yet, here we were able to show within this study that, “Hey, you guys are doing some things really well that are driving connectivity and stickiness among your donors because of the personal nature of how you’re able to engage them that the big guys could really learn from.”

So it was just an interesting turning of the tables a little bit, because we often talk about the resources and the capabilities that larger nonprofits have and yet the smaller ones are doing some things right in terms of how they engage and retain their donors.

NB: Are you able to share any of those, because I think those are really important, as well as what were some of those things? Because I do think in some ways as we get bigger, we try to do things that are process-driven rather than the fact that it’s relational-driven. We always replace relationships with process that basically then forces into a transactional relationship.

Because if you and I were trying to build a relationship, we can’t do that through process, without relationship on top of that. There might be some intentionality there through process, but they have to have that humanness. I feel smaller orgs get that right. So what were some of those processes, yeah?

HN: Yeah. I mean, a few of the things that emerged, and I’m probably not going to remember all of them, but they’re pretty basic things. I mean personal phone calls to donors, and I think in the example that that I’m recollecting right now, was down to people who gave a $100 which is for a smaller organization, doable, for a larger that starts to get difficult.

But they also responded to any comment that was coming through an unstructured way. And what I mean by that is through social media or through comment mail. Frequently those are the kinds of things that in a large organization we may respond, but we typically let those things accumulate, and then we might do an analysis, and then we come back and we discuss what we’re going to do about it.

Whereas in a smaller organization, they literally have somebody whose whole job is focused on among other things but they are literally responding to each comment that comes through and attempting to then put that into a pipeline for further engagement.

So those are just a few of the examples that emerged that I thought were again, not rocket science, but simple things that provided that personal touch and made the donor feel somebody was paying attention to them.

NB: Yeah, absolutely. And in our Responsive Framework that we’ve designed, we just call that listening. They’re listening to them. Try to give it really simple tactic one, just listen to the donor signals, whether those are direct first-party signals, or actions, or intents, or data that you’re getting, but then actually just connecting and suggesting next steps to each of those donors.

I think the great thing is that we’re at a point where previously batching and bulk mass approach was really the only thing we could do, because the technologies didn’t exist to personalize on that scale. But I think now, and even some of the stuff that you all have at Pursuant that can help navigate the complexities of data and help you more personalize those responses are helping nonprofits actually deliver a more human experience at scale, which ultimately is responsiveness but also leads to donor loyalty.

And I think it’s so key as we move forward to try to again find that intersection between humanness and technology to create these personalized experiences at scale for all your donors.

Which Tools Help Build Donor Loyalty?

HN: That’s right. Now, I think you really did highlight something there in terms of just because you are a larger organization, or even a midsize organization, and you may not have the resources to contact everybody one-on-one, there are tools that are available.

We certainly at Pursuant have the capability to support that, as do many others. And I think the other thing that we’re seeing along those lines is the use of video. I mean, it’s amazing the difference when you use video versus just a more flat type of engagement. It does create a little bit more of the personal touch, but it also is a little bit of a proxy, I think, for the personal experience, right?

So if you can’t actually visit a place or you can’t see the direct impact that an organization is having on the mission recipients, you can feel it through video much more so than you can through reading a story.

NB: Absolutely. And I’ve thought, and not to get too far advanced but even just basic video, but VR and AR, these things are really starting to actually democratize experience. Coming from the international relief world where there’s huge physical distance, typically, from our donors and the good, we were able to use video to basically reduce the distance between the giver and the good.

I think organizations, and one thing that we advocate for as part of our responsive framework is, that you have to break down silos and reduce the distance between the giver and the good to be able to build connectedness.

Because ultimately they don’t fully want a relationship directly with your organization. They’re connected with the cause and you’re helping them facilitate that almost in the form of platform, and being able to use the video and other technologies to facilitate that. Even tools that we have at Virtuous and other things to make that more personalized, I think is what drives up connectedness, which leads to retention, which ultimately leads to donor loyalty which is the case that you all were making.

HN: Absolutely.

How Do I Lead My Nonprofit to Promote Donor Loyalty?

NB: And so I know you’ve done this initial study and again donor loyalty is such a natural thing. I think people are like, “Of course we want to do that.”

But you mentioned coverage ratio, you mentioned other data but how does an organization, a leader listening to this right now who’s on their way to the office. They’re sitting in the car, and they’re heading into their staff meeting, and six emails from the board, and all this other junk that they have to go through every day. What do they do with this? What now?

Because we know it’s important but where do we go from here? Talk to that CDO, VP of Development, Director of Development that’s on her way to a meeting.

HN: Yeah. Great. So I think leadership dedication to long-term value and the willingness to invest in that is probably the most important thing. We see this day in and day out with partners of ours clients where the leader says this is what they want, and they certainly talk that way, and then a year goes by and the revenue coming in the door for that fiscal year is falling short. Then the investment commitment to the long-term value based tactics and strategies starts to diminish, particularly at the board level.

So I think for those of us who are in those leadership roles for a Chief Development Officer, Chief Marketing Officer who is responsible and might be listening now for educating their board and educating their CEO and their CFO, honestly about what this means. Having that commitment and being able to help translate for those leaders what the bottom line impact is going to be on this work is extremely important.

So having the ability to speak about long-term value which again can be seen as a little bit more soft and squishy, but translating that into a lifetime value measure and the bottom line impact that that can drive for not only the organization but for the mission, that’s an extremely important step for any leader to take.

So I would say if you’re not already measuring lifetime value, we propose a fairly simple calculation for how to get there in the study. There’s lots more complex way of doing it but we wanted everybody to be able to get their head around it and to be able to, if they wanted to, apply it within their organization.

So I would say if you’re not doing that, do that, and then begin to translate any strategy that you’re working on into the impact that it will have. Draw that connection between retaining a donor, retaining a certain type of donor over the long-term.

Secondly, I would say directly related to that is a commitment to work collaboratively across silos, because I think you have to be able to allow the donor to engage in the way that they want to engage. And that’s going to, to our point earlier about multiple touch points, in order to facilitate that, you have to be willing to allow the donor to choose how they want to engage. And that requires you internally to not be so focused on what my specific program is going to drive, and be open to measuring those assists and not just the direct basket, if that makes sense.

NB: Yeah, it does make sense.

HN: And so I think those are the two things. Yeah. Those are the two things.

NB: And I think too, that’s what makes this a tough lift. Because when we are developing some of the work we’ve been doing around responsive fundraising, we realize that it’s not just a tactical shift, it’s a strategy shift and ultimately a strategy shift that requires a cultural shift both from a budgeting and organizational standpoint.

But I think donors are voting with their dollars and they’re showing us today that our current models were designed for a donor that doesn’t exist. And I think we need to be responsive to that, and listening to that, and identifying new ways to be able to loosen that, scale, connect, and provide those personalized relationships with donors, even if it’s through new mechanisms and not a one-to-one phone call.

I think people opt out sometimes because it’s like, “Well, we don’t have enough people for that regardless of the organization size.” And it’s finding that intersection between humanists and technology.

So I think this is an incredible push forward and I hope that those listening understand the mechanisms or the ingredients for cultivating donor loyalty and some of these initial benchmarks and ways that you can walk away practically and understand how to be thinking or at least start a conversation.

And I think, again, it goes back to putting the data in front of everybody. I know the most important thing I ever did in collaboration with someone else on my leadership team at the organization was that we built a dashboard, and every leadership meeting every single week we reviewed the dashboard. And it was real numbers.

It is what it was. We had to review donor retention on a weekly basis month-over-month, year-over-year, and dig in deep on that. And at least it was there. And sometimes you have to do something with that if it keeps showing up. We were like, “Why do our numbers keep decreasing and what are we going to do about it?”

HN: What are we going to do about it?

NB: The data’s not lying. I think putting the data in front and then talking about it from a humanist standpoint, and sometimes both parties have a challenge between the data and the human side or the data people. And really, I think today’s fundraising leaders have to be very comfortable talking about both sides of that business.

HN: Yeah. And we all know that the data can be flawed, but I think actually continuing to put that in front of you, and recognizing that it may only be 85% right and that’s okay. But what can we do with that? How can we apply this and take this to inform the way that we move forward?

So I think, to your point, getting that discipline around data is extremely important but don’t let it keep you from doing things right. And don’t let it also stop you from having the contextual conversation about the human side. So it really is, I know it’s an overused phrase to say “the art and science” but both sides are extremely important.

NB: Absolutely. Yeah. And I think that they’re becoming even more important and I think even our leadership inside nonprofits are evolving and the roles and responsibilities, which is probably enough content for three more podcast episodes. So we’ll leave that behind.

But this study is packed with insights. Obviously, we were only able to cover a few and obviously it’s just the first ever but if people are looking for the study, how can they go find it?

HN: Yeah. So it’s on our website at www.pursuant.com and you should be able to find it under our resources section. And then also we would love to get feedback and you should be able to if you wanted to leave a comment there. We’d love feedback on how we can evolve it and enhance moving forward and what would be most valuable to you and to your listeners? So, we would love that kind of feedback.

NB: Absolutely. Yeah. And if you have any questions for that, you can definitely leave us a note and we’d happily share that with Hilary and her team over at Pursuant. And we’ll also include a link directly to the study in the show notes. So if you’re listening on Apple or anything you can grab that in the show notes below, it’s a really valuable report. And again, it’s just a benchmark to help you begin thinking about some of these core metrics that you might start a conversation.

Hilary, so grateful for you and your commitment over the years and also Pursuant efforts to help organizations really think about, “How can we be more responsive and how can we drive and build lasting relationships with donors which is ultimately going to help move the causes we’re all working on forward?” So thanks for your time, Hilary.

HN: Thank you Noah, I appreciate it.

Responsive Fundraising: The Blueprint for Engaging Modern Donors

Traditional fundraising strategies no longer work. This blueprint explains why today's donor expects more, and how nonprofits are shifting to responsive fundraising.

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