Are You Literally Losing Donors?

Yes.

Thank you for attending my TED talk.

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OK, let me elaborate.  If you’re not proactively managing your data, you are literally losing donors and letting real money walk out the door.

And I’m not talking about the general and to-be-expected lapsing donors, or donor retention rates.  I’m talking about just the data itself – name, address, phone, email, general demographics.  HOW you actually reach people.

Data, like any element of fundraising, requires care, focus and attention.  It is THE single greatest and most valuable asset you have.

I’m tremendously grateful to have been included in Roger Craver’s recent blog at Donor Voice/The Agitator:  Premature Exoneration.  He quoted my recent session at the AFP Icon conference earlier this month in San Antonio:  “Donors ARE Data:  Creating a Donor Centered Fundraising Operation (Even If You’re Data-Phobic).”

The idea I shared was on the compounding loss of dollars due to data quality issues and that over time, bad data will ultimately cost you serious money.

Compounding Data Loss

The intention of this chart is to present a quick, down-and-dirty snapshot of the value bad data could have.  Let’s say you have 25,000 records and in Year 1 you raised $1,100,000.  The Average Constituent Value is the total dollars raised divided by number of records (agnostic to whether they are donors or not, just total # of records) . . . this means every record in your database is worth, on average, $44.

This is not exact science, this is snapshot, this is data for people like me who failed college Algebra three times (not kidding, true story).

IF you lose 1% of records to data quality issues – bad address, no phone number, they moved, etc. etc. etc. – that’s 250 records.  250 x $44 = $11,000.

Now, if you do NOTHING about those records and you keep adding another 1% of bad records (because people move, etc.), it starts to compound and year-over-year, ON AVERAGE, you have last year’s bad data plus THIS year’s bad data and it all piles up.


Stick With Me It Gets Worse

The above scenario is an average and very simple math.

But let’s look at it a little deeper.  Same record count, same dollars.  It actually works like this . . . .

The 250 records from Year 1 account for $11,000 in dollars lost.

You will ALWAYS have that loss.  So, that’s $11,000 x 5 years or $55,000 JUST from those records.

Now, in Year 2, you add another 250 records that, on average account for $10,000 in dollars lost.  You will ALWAYS have that loss, so that’s $10,000 x 4 years (measuring in Year 5) or $40,000.

Year 3 – add ANOTHER 250 records, also at $10,000 multiplied by 3 years, that’s $30,000

ANOTHER 250 in Year 4. 250 x $44 = $11,000 over 2 years is $22,000.

Year 5, another 250 x $4 = $10,000

You with me? $55,000 + $40,000 + $30,000 + $22,000 + $10,000 = $157,000
Bad Data Will Always Be With You

There is no such thing as a perfectly clean database.  It’s an aspirational goal, sure, but you’ll never have 100% clean, reachable data.  And data will always degrade.  Again, people move, get divorced, get married, change their email address, switch jobs . . . there’s a million and one reasons why the data you have for donors would go bad.

But looking at that compounding loss – however you do the math – shows that just simply keeping clean data, as much as we can, actually does have an impact on actual dollars.  Managing data is actually an ROI-positive exercise.  And not just in this year, but for years to come.

Managing data, keeping it clean and your donors reachable IS fundraising.  There is a net, measurable result.  In real dollars.
Simple Tips to Keep It Clean

  1. Make it somebody’s responsibility.  Data is an asset, it is worth money, make SURE somebody is responsible and accountable for its quality.  And make sure they have backup.
  2. Set policies and procedures around data management that are as important as your employee manual.  Bloomerang recently published a phenomenal template.  Download it.  Use it.
  3. Perform regular NCOA (National Change of Address) updates and any other overlays/upgrades that will enhance data quality.
  4. Update as you go – whoever is doing gift entry should also be looking for and updating demographic information as well.
  5. STAY IN TOUCH WITH YOUR DONORS

Stay In Touch With Your Donors

This is the easiest one.  And yet the least common.  Think about the last time you moved, changed an email, changed your phone . . . who did you tell?  Who did you make sure had your contact information?  Family.  Friends.  Companies you do business with, perhaps?  I bet you updated your Amazon delivery address.

Any nonprofits/charities you support?

Would you know who or how to contact a charity you care deeply about if you moved?

Our donors don’t tell us they’re moving or make sure we stay in touch with them because we haven’t created enough value in the relationship.  They don’t think we care, so we’re not top of mind.

We don’t necessarily make it easy to contact us, either.  Do your donors know who to contact – a person, with a name and a direct-dial phone number – if they need to make changes to their info?  Or, their gift?

One super simple thing you could do?  Once a year send out a lovely, donor-centered, thank you-driven questionnaire:  “Thank you, love you! By the way, do we still have your contact information correct?”  Send it in all channels (mail AND digital), make it drip with donor love, use it as an opportunity to say thank you (again!).

This is ALL the Donor Love stuff.  Communications with donors isn’t just about asking or thanking, it’s about all the little steps in between to let a donor know they’re important to us.  And make ourselves important to them.

So, yes, you are literally losing donors.  Stop it.

 

 

 

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