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Downes Murray International News

Measuring your donors' true mood

If you’re not trying to raise money with your newsletter you need to think again: because it’s a ‘donor happiness meter’.

But how do you know if your donor newsletter is really any good?

Well, you need a metric.

You need some objective measure that tells you when your donors like what you’re doing.

Without that objective measure, the newsletter’s impact on donors is anyone’s guess. We all hope our newsletter ‘cultivates’ good donor relations. But without an objective measure, how will we ever know?

Say you’re a good-sized hospital. You mail 50 000 copies of your newsletter to donors, big and small. That puts a lot of money at risk, when you look at staff cost, production and mailing.

Let’s not forget ‘opportunity cost’ either.

When you’re spending so much money on one communication item, then you don’t have money to spend on something else.

Maybe the money could be better spent? Maybe you could spend it, for instance, on the world’s best ‘thank you’ programme?

Tests, after all, repeatedly show that putting more attention on thanking can have huge financial payoffs for charities.

Case in point: Angel Aloma, ED of Food for the Poor, a charity raising $1 billion annually, found that he could raise an extra half million in gifts from a test group of 25 000 higher-value donors who received one – just one – extra thank you a year.

Why you cannot kill the newsletter
You might reasonably ask at this point: then maybe we shouldn’t even do a newsletter? That’s not an option.

You have to report to your donors, if you hope to keep them. Remember the number one donor complaint: ‘I have no idea what they did with my money!’

Donor newsletters (assuming they’re properly done and based on the well-tested Domain Formula) improve retention.

And, wow, do we need better retention. Right now, 70 to 80% of first-time donors in America do NOT make a second gift to the same charity, ‘big data’ sadly shows.

Acquiring new donors is an expensive activity. And charities lose most of their new supporters inside a year.

The truth is: the easiest money you’ll ever make will come from improvements on the donor retention side.

A small improvement in retention – keep 10% more first-timers than you did last year – will yield 50% more income from that very same batch
of incoming donors over their lifetime, Dr. Adrian Sargeant’s research found.

In short: better retention is how you make LOTS more money from the very same people. And donor newsletters play a key role.

Reporting is the primary function of a donor newsletter: you show and tell your donors how their generosity has made a difference in advancing the mission.

A second important function of a donor newsletter is unabashed, uninhibited flattery of your supporters. You bring your donors the gift of joy. You tell them all they are wonderful people.

Effective donor communication programmes have just three activities:

  1. You ASK for my help (acquisition, renewals, bequest promotion);
  2. You THANK me for my help (this includes ‘welcome’ materials for new donors) and
  3. You REPORT to me what my help did (and, of course, you remind me of what a wonderful, generous, good, and special person I am; because that’s the correct ‘donor-centered’ way to talk).
  4. Ask, thank, report. Repeat.

That’s all of it. Every communication activity fits under those three things: appeals, invitations, newsletters, annual reports, websites, social media and mobile.

Are your donors happy with you? That’s all that matters. All good things flow from that.  Happy (or at least ‘happy enough’) donors continue giving. Unhappy? Annoyed? Uninterested? They’ll give somewhere else or give you less than they could.

So, how do you measure donor happiness exactly? Back to my very first point: you need metrics. The simplest way I know is to track gift revenue generated by the newsletter. From that, you will know accurately whether or not your donors like you.

Why? Because money is a feedback mechanism.

Income will tell you whether your principal means of contacting donors on a regular basis – your newsletter – is doing you much good as a relationship builder.

With acknowledgement to Tom Ahern

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