Why Do New Donors Not Renew?
You could call the title of this newsletter a bit of a trick, because most new donors have no idea that giving a gift means that you’re supposed to “renew” the gift — and, ideally, increase it, the following year. I suppose if you give to the “Annual Fund”, the implication is more clear, but if I just decide to contribute to your organization when I never have before, I won’t know that making that first gift will be interpreted as an implicit commitment to give to you on a regular (annual, at least) basis.
I ran this fact by a few high-level institutional fundraisers at a recent conference, and they were shocked — and then scratching their heads — when I told them that there’s no way that a new donor would know what they’re getting into when they happily make a gift to a nonprofit. Why would a donor know that? Is there a person at the organization who tells them that giving “annually” is “the rule” when their first gift is received?
Of course not. The organization is so happy to have a new donor that they don’t want to muck it up by telling the donor that there’s a long-term expectation now.
So imagine how strange it is for a donor new to giving to be asked to “increase your annual gift this year” or to “renew your gift”. An analogy of this might be going to a lovely bed and breakfast on holiday, enjoying your time there, and then getting an email several months later saying “when you return this year, perhaps you’d like a bigger room?” Who said that I was coming back the next year?
I’ve been told many times that I should be increasing my annual gift when I was never asked if I was interested in giving annually in the first place. Can’t I, as a donor, decide to give when I want to?
The worst part of this is when I actually want to give a second gift, and I’m told that it should be a larger dollar amount than the previous gift. (There’s a charming story about this at the beginning of my book. Spoiler alert: It didn’t end well.)
Wouldn’t it be better to gratefully receive and acknowledge the first gift, nurture a personal relationship with the donor, and only then explain to the donor why annual giving is a lifeline for most nonprofits? Maybe explain how nonprofit budgets work, so that the donor can appreciate your giving them an education — instead of hitting them with an expectation?
I don’t think it’s a stretch to think that this mismatch of understanding between the new donor and the fundraiser can partially explain the huge drop-off in new donor retention rates.
As hundreds of thousands of new donors start giving, we as a sector can’t afford to turn them off just as they’re getting started. Assumptions and expectations on the fundraiser’s part are only going to send donors running away from you and your organization.
Think about this: Why would a donor, new to giving, know anything about annual renewals, or, for that matter, the donor pyramid, or moves management? All a donor knows is that they’re partnering with an organization that they believe in and they want to help. Isn’t that ever okay?
Our first Zoom call for premium subscribers will happen this Friday, April 28th at 10 am PT.
This will be a place for like-minded individuals to gather to discuss how to Save Giving with me. This month’s theme will be around the new research confirming philanthropy is in trouble. This report shows that not only are we losing donors but the dollars donated is decreasing. We are going to discuss how to change that through a guided conversation. Questions are welcome!
If you’re not a premium subscriber yet, there’s still a chance to join us by subscribing here: https://philanthropy451.substack.com/subscribe