Donor retention by the numbers: Demystifying the leaky bucket. A webinar presented by Third Sector Labs and Donor Trends. Presented live on June 12, 2014

1. Donor Retention by the Numbers:
Demystifying the Leaky Bucket
Present
&

2. Our Agenda
1. The leaky bucket – what is it?
2. Donor retention by the numbers
3. Is poor data quality hiding fundraising risk?
4. Case study and action plan
5. Next steps and takeaways
Please participate in our online poll while we
get organized for today’s event.
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3. Our Experts
Gary Carr
President, Co-founder
Third Sector Labs is a data services
company helping nonprofits to re-think
their data management practices and
solve data problems.
ThirdSectorLabs.com
gcarr@thirdsectorlabs.com
linkedin.com/in/gpfcarr
DonorTrends is a data analytics firm
providing affordable and easy to use
donor segmentation tools to nonprofits of
all sizes.
DonorTrends.com
caity.craver@donortrends.com
linkedin.com/in/caitycraver
Caity Craver
CEO
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4. 4
Insight
Reporting
• Masterfile Audit (MAAP)
• Fund Forecast™ Budget tool
Exclusively Serving Nonprofits
Built by fundraisers for fundraisers, DonorTrends is on a mission to provide affordable and
actionable tools that increase revenue, retention, and improve efficiencies.
www.DonorTrends.com
Action
Strategy
• Action Plan (MAAP)
• Audience Audit™
• Mailplan Check™
• Actionable Analysis:
• Ex: Upgrade Analysis
Execute
Scoring
DonorScores™ Predictive Models
• Net Revenue Optimization
• 2nd Gift Conversion
• Monthly Donor (sustainer) Conversion
• Lapsed Donor Reactivation
• Mid-Level Upgrade
• Major Donor Upgrade
• Planned Giving Identification

5. LEVEL 1:
ASSESSMENTS AND
CLEANING
LEVEL 2:
DATA MANAGEMENT,
ENRICHMENT, MIGRATION
LEVEL 3:
WAREHOUSING, MINING,
VISUALIZATION
Also Exclusively Serving Nonprofits
---- Data Services ----
Founded in 2013 by professionals with 20+ years of technology and data experience with
Fortune 500 companies, the federal government, and nonprofits
Offices in Washington, DC and Seattle, WA metro areas
www.thirdsectorlabs.com
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6. Let’s get started
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7. Question: how will you raise more money?
7
Fundraising planning Potential tasks
A Retain existing donors Build relationships
Capture more data
B “Lift” existing donors Launch matching gift plan
C Reactivate lapsed donors Targeted communications
D Find new donors Ask donors for referrals
Buy list

8. Next question: which is the easiest?
8
Fundraising planning Potential tasks
A Retain existing donors Build relationships
Capture more data
B “Lift” existing donors Launch matching gift plan
C Reactivate lapsed donors Targeted communications
D Find new donors Ask donors for referrals
Buy list

9. Final question: which is the most expensive?
9
Fundraising planning Potential tasks
A Retain existing donors Build relationships
Capture more data
B “Lift” existing donors Launch matching gift plan
C Reactivate lapsed donors Targeted communications
D Find new donors Ask donors for referrals
Buy list

10. Donor retention is everything
10
“What if there were no new donors?”
- Roger Craver, Fundraising Expert

11. What do we know about donor retention?
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Source: AFP / Urban Institute 2013 Fundraising Effectiveness Survey Report
Infographic: Bloomerang Nonprofit Donor Retention Primer

12. And?
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Source: AFP / Urban Institute 2013 Fundraising Effectiveness Survey Report
Infographic: Bloomerang Nonprofit Donor Retention Primer

13. And, and?
13
Source: AFP / Urban Institute 2013 Fundraising Effectiveness Survey Report
Infographic: Bloomerang Nonprofit Donor Retention Primer

14. Which brings us to the Leaky Bucket
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For every
100 donors gained
There are
105 donors lost

15. Retention Math 101
15
Donors who gave in 2012 and 2013
whose first gift was in 2012.
New Donor Retention
Donors who gave in 2012 and 2013
Overall Donor Retention
Donors who gave in 2012 and 2013
whose first gift was pre-2012.
Existing Donor Retention

16. But before we “do the math”, remember …
garbage in, garbage out

17. What do we know about data quality?
“If your data isn’t getter better, it’s getting worse”
-- TSL data scientist
“What! Why?”
-- audience

18. Data degrades
What does that mean?
Data degradation – [DAY-tuh deg-ruh-DAY-shun], noun
Refers to the worsening of data quality over time. With assets like a donor database, degradation is inevitable.
Why? Because of the many, sometimes unavoidable, negative influences acting on your data quality. These
include: consumer data naturally changes as people change jobs, relocate, have families, and go through the
normal cycles of life; data inputs are often flawed and/or manual, and the manual labor can be poorly trained;
related data is changed, purged or updated; data migration to new systems such as CRM software.

19. Data degradation
Cause #1: your organization
– Lack of data entry standards
– Unskilled data entry workers
– Common mistakes
– Record fragmentation
Cause #2: the technology
– Multiple, disparate systems
– System upgrades
– Integration, processing errors
– Sheer volume of data
Cause #3: those darned donors … life!
– Change in address … every 5 to 7 years
– Change in jobs … 9 to 11 jobs in a lifetime
– Family / life event … divorce rate, birth of children, death … what else?

20. Your view
You try to keep
track of contact
updates.

21. Our view (once we export and analyze)
Salu
tatio
n
Last Name First
Name
M.I. Address 1 City State Zip Phone Email DOB Gender
MR Setters m
MS SIMMS Laurie 1313 Danger
Ln
Appleton CA 73111 310.555.555
5
Laurie@mail 04/29/81 F
Mr. singletary Mike T 310.555.123
4
mts@mail.com
Singletary Michael 310.555.123
4
mike@mail.com M
Solvington Allen 5201 Marshall
Lane
Cupertino CA 91001 323.555.599
0
also@mail.com 05/30/75
Mr. soprano Cindy P. 222 Main St. Cupertino CA 91002 cindy@mail.com f
Dr. Standish Bradford 1141 Duke
Ave
Los
Angeles
CA 91010
Stevens Allison 8726 Elm Ave Appleton CA 90009 310.555.555
1
01/01/01 f
STEVENS ROBERT 2 2101 Data Ave Los
Angeles
CA 91010 rs2@mail.com 12/14/60 m
Sr Tahoma Juan 20B Eldora Mexico
City
+52-55-
5222-2222
jtahoma@mail.co
m
01/14/59 M
Incomplete
record
Salut./gender
mismatch
Incomplete email
CA ≠ 73111
Multiple
normalization
issues
M.I. = 2 ?
Moved last year
(NCOA)
Foreign address
?
DOB is bad
Potential dupe (ph #)

22. Think about your data quality
1. Is your data clean and rich enough to:
– Target lapsed donors with the right message?
– Build profiles of donor groups … segment?
– Lifting average donations depends on targeted messaging …
which depends on segmentation
2. Do you have the right data capture tools in place to
grow prospects?
3. Do you know how your donors want to communicate?
4. Do you capture the right data and evaluate before
returning to re-cultivate, re-engage?
– Reducing attrition rates depends on this
5. Are you using service data and data visualization to
tell a better story?
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23. Back to the numbers
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24. Data needed to calculate retention
1. Donor ID
2. Date of gift
3. Amount of gift
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25. Retention Math 101
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52,000 / 99,000
53%
Existing Donor Retention
3,000 / 10,000
30%
New Donor Retention
2012 existing donors 99,000
2013 repeat donors 52,000
2012 first-time donors 10,000
2012 first-time donors
who gave again in 2013
3,000
(52,000 + 3,000) / (99,000 + 10,000)
55,000 / 109,000
50%
Overall Donor Retention

26. Donor Dashboard™
26
30%.97 53%
36%

27. File Growth
File Decline
GROWTH SCORE
Retention and the Leaky Bucket
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Existing
Donors
Retained
55,000
Donors Gained
New Donors Reactivated
10,000 4,300
Lapsing Donors
14,750
Lapsed Donors
75,000
2
.5
1
.97

28. Move the metric
28
$196,448
Additional Annual
Gross Revenue
50% 52%

29. Real World Fundraising Example
Developing a Retention Action Plan
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X X
X
X

30. Increase response → Increase retention.
Define the objectives for your existing,
single-gift, and lapsed donors.
Increase Retention
Increase Response
Increase Second
Gift Conversion
Target single gift donors
to increase retention from
18% to 20%.
Increase Existing
Donor Response
Target existing donors to
increase retention from
61% to 63%.
Increase Lapsed
Donor Reactivation
Target lapsed donors to
increase reactivation
from 2% to 4%.
Retention Action Plan

31. Use Scores to Raise More.
Committed
 Using science,
predict who’s most
likely to respond.
 Develop campaign
/ contact strategy
to target most
likely donors.

32. Committed
Donors
Lifetime Value
$707
24,781
Episodic
Donors
Lifetime Value
$64
25,447
Casual
Donors
Lifetime Value
$369
Retention Action Plan: Target Existing Donors*
34,273
*Donors who have given 2+ gifts in the last 0-24 months.

33. $$$
$$$
$$$
Committed donors
Casual donors
Episodic donors
% of budget
to allocate:
Contact as
frequently as
budget allows.
High
perceived
channels and
packaging.
% of budget
to allocate:
Reduce
contact
frequency by
15 – 20%
Lower cost
packaging
and channels.
% of budget
to allocate:
Reduce
contact
frequency by
50% or more.
Minimize risk.
Low package
costs and
channels.
72%
20%
8%
Retention Action Plan: Existing Donor Clusters
34,273
25,447
24,781

34. ACTION PLAN | 34
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Committed
465
donors
Casual
350
donors
Episodic
348
donors
RETENTION ACTION PLAN: EXISTING DONOR CONTACT STRATEGY
Increase contact
frequency to
improve retention
and generate
additional revenue.
Decrease contact
frequency to reduce
costs . Reallocate
savings to increase
retention and donor
value.
Increase revenue and decrease cost by developing an annual contact strategy by donor cluster.
Step 1: Rank your campaigns from best performing to worst performing.
Step 2: Map out the contacts for each donor cluster.
34,273
donors
25,447
donors
24,781
donors

35. RETENTION ACTION PLAN: TARGET SINGLE GIFT DONORS*
MorelikelytoRespond
12.554
Unlikely but
Valuable
More Valuable
12,641
Potential
Partners
17,898
Likely
Loyalists
Lifetime Value
$214
Lifetime Value
$72
Lifetime Value
$36
*Donors who have given 1 gift in the last 0-24 months.

36. Expense
Budget
Frequency
of Contact
Channels
Likely
Loyalists
Potential
Partners
% of budget to allocate:
Unlikely but
Valuable
% of budget to allocate: % of budget to allocate:
53% 34% 13%
Retention Action Plan: Target Single Gift Donors
17,898 12,641 12,554

37. ACTION PLAN | 37
REACTIVATION ACTION PLAN: TARGET LAPSED DONORS
25-60 Months
Lapsed
41,241
Risky
45,886
Renewable
62,995
Reliable
Lifetime Value
$847
Lifetime Value
$802
Lifetime Value
$378

38. REACTIVATION ACTION PLAN: LAPSED DONOR CLUSTERS
$$$
$$$
$$$
Reliable donors
Renewable donors
Risky donors
% of budget
to allocate:
Contact as
frequently as
budget allows.
High
perceived
channels and
packaging.
% of budget
to allocate:
Reduce
contact
frequency.
Only best
campaigns.
Lower value
channels and
packaging.
% of budget
to allocate:
Be cautious.
Possible ‘Super
Dupe’ with
acquisition.
Minimize risk.
Low package
costs and
channels.
61%
27%
12%
62,995
45,886
41,241

39. Increase Retention
Increase Response
Increase Second
Gift Conversion
Target single gift
donors to increase
retention from 18% to
20%.
Increase Existing
Donor Response
Target existing donors
to increase retention
from 61% to 63%.
Increase Lapsed
Donor Reactivation
Target lapsed donors to
increase reactivation
from 2% to 4%.

Retention Action Plan Results
 
Goal
Actual 23% 63% 5%

40. Overall Retention Best Practices
1. Thank yous!
2. Welcome series for new donors.
3. Superior donor services.
4. Show the donor how her dollar is put to work.
5. Know your donor – data hygiene is key!
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41. In conclusion
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42. 3 Takeaways
1. Retention is the best way to improve your
fundraising results year over year.
– And least costly!
2. Data quality matters.
– And know your numbers!
3. Develop an action plan to meet your
fundraising goals.
– Hope is NOT a plan!
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43. How we can help
• DonorTrends offers … a Masterfile
Audit and Action Plan. Ready for
your review in less than a week,
the MAAP is a GPS to exceeding
fundraising goals.
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• Third Sector Labs offers nonprofit data
services, such as hygiene. We can start
with a data quality assessment.

44. • Digital fundraising experts
• Retention-focused technology
• Donor Commitment / Satisfaction experts
• Full Service Agencies / Consultants
• Acknowledgment / Data Specialists
Need fundraising help?
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45. We’d like to hear from you!
Please submit your questions…
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Q & A

46. Thank you!
Gary Carr
President, Co-founder
ThirdSectorLabs.com
gcarr@thirdsectorlabs.com
linkedin.com/in/gpfcarr
DonorTrends.com
caity.craver@donortrends.com
linkedin.com/in/caitycraver
Caity Craver
CEO
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