Why Donors Stop Giving Money to Cultural Organizations (DATA)

Why Donors Stop Giving to Cultural Organizations

Why do some people make a donation (or a few) to a cultural organization and then simply stop giving? The top three reasons stem from the same issue.

Cultural organizations exist to carry out their missions (which often relate to educating and inspiring visitors) – but they cannot achieve these missions if they are unable keep their doors open and their lights on. Simply put, we need our visitors and donors in order to thrive.

It would be wonderful to think of annual donors as fish that we can keep as trophies and mount on our walls. (As in, we catch them and then they are forever ours!) But donors are actually like fish that we catch and then throw back into the sea – hoping that we can use evolving tactics to catch that same fish year after after. This is especially the case if the fish is a $250-$2,500 donor. (That’s a fancy fish!)

While it’s great when we can “catch” and cultivate a $250-$2,500 donor, we all have observed that not every donor renews their gift on an annual basis. So, what gives? Why do some donors fail to renew their contributions?

Take a look at this chart, provided by IMPACTS Research and informed by the 98,000 person sample that comprises the National Attitudes, Awareness, and Usage Study. This chart represents the responses of previous $250-$2,500 annual donors who did not make another gift to the same visitor-serving organization within the past 24 months.

IMPACTS - Why donors stop making contributions

The reason that we segment by the $250-$2,500 range is because we noticed that the repeat giving rate was much, much, much higher for annual donors at the >$2,500 level.  We posit that this because (a) larger donors don’t have the same financial constraints in terms of affordability factors; (b) they are likely very committed to the organization/cause (as evidenced by their higher level of giving); and (c) higher level donors often receive a higher level of attention from an organization. In other words, they are less likely to slip through the development “cracks.” Of course, this still happens all too often…

Notice anything interesting about the top three responses? 

 

1) The top three reasons why donors drop out of giving are due to relationship management issues

Not being thanked for a previous gift, not being asked to donate again, and lack of communication about the impact of one’s donation all represent massive communication fails. Advances in relationship management technologies are supposed to make communication fails increasingly rare – but, the data suggest that many of us remain our own worst enemies when it comes to retaining donors.

CRM stands for “customer relationship management.” CRM is an organization’s approach to managing interactions with current and future customers (or – in the case of cultural organizations – constituents, visitors, and supporters). It’s a bit of a jargon term for “How your organization connects with people and manages relationships.” And it’s important – especially because giving money can feel very personal and, today, audiences want to support something meaningful. If your organization fails to reassure supporters of the impact of their gift – heck, if your organization fails to thank folks for their gift – than there’s definitely an opportunity to re-evaulate your organization’s CRM strategies and tactics.

The fact that not being thanked for previous gift holds the spot as the leading reason why folks stop giving to an organization feels a bit incongruous with the values of the types of organizations that we are supposed to be. We are doing good. And we want people to do good with us. Do we have an excuse for not even acknowledging precious folks who do exactly what we want them to do? I’m not sure that, “I’m too busy to write every $250 donor or member an email” counts in today’s world…

 

2) Expectations of personalization today are unforgiving toward forgetful organizations

This is a good segue to the next point: Personalization trends are affecting everything. We now live in a 24-hour world of constant connection. Most folks expect responses within one hour on social media, and all of our ads and even our newsfeeds are tailored specifically according to our interests. Personalization trends are altering long-held CRM and even programmatic beliefs within cultural organizations. Indeed, change can come slowly for nonprofits, and if there were only a single urgent (and perhaps obvious) need to adapt personalization into cultural organizations, thanking and communicating with donors may just be it.

Also, keep in mind that “not being asked to donate again” isn’t about collateral and messaging so much as it’s about personalized communication. Reaching out to folks to ask them to give again is an opportunity for connection and personalized interactions. If an organization sees “not asked to donate again” in this data and thinks, “Let’s send that form letter out 10 more times,” then that organization is missing the point.

A donor online is a donor off-line  – and lack of a personal touch just doesn’t cut it anymore.

 

3) Connectivity is king (and losing donors for CRM failures indicates lack of awareness of this reality)

Essentially, the top three reasons why people discontinue giving are because organizations are forgetting that today, connectivity is king. Content is no longer king for many reasons – but one of them is because many staff members “not my job” the word “content.” Similarly, CRM sounds like marketing jargon (because it is), but other departments – and especially fundraising and membership – “not my job” customer and community management today at their own expense. In fact, community and customer management may be just as – if not even more – important for development and membership teams as it is for marketing teams because big donors lead to big donors and word of mouth from customers drives all other avenues of engagement and revenue – including the gate.

 

The good news about these top three responses is that organizations can change them. These challenges to sustained giving may only be issues because they represent “growing pains” as organizations evolve to meet the needs of our super-connected audiences. But realizing the need to evolve and update our outdated systems is critical for change.

While this data may be a tad embarrassing, it’s something that we can control – and that’s great news! Let’s fix our development and membership communication issues and remove the top three barriers to our $250-$2,500 donors continued giving. After all, our donors want the same thing as we do: To make the world a better place.

Our donors are supporting us. Let’s support them back.

 

Like this post? Please check out my YouTube channel for video fast facts! Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

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Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Financial Solvency, Fundraising, IMPACTS Data, Myth Busting, Sector Evolution, Trends 6 Comments

About the author

Colleen Dilenschneider

MPA. Chief Market Engagement Officer at IMPACTS Research & Development. Nonprofit marketer, Generation Y museum, zoo & aquarium writer/speaker, web engagement geek, data nerd, marathoner, nomad, herbivore

6 Responses to Why Donors Stop Giving Money to Cultural Organizations (DATA)

  1. Kevin Sprague

    Absolute TRUTH! That first item – not thanking the donor for the gift – extends not only to gifts of cash but also gifts of time, services and attention. I’ve worked with many development directors and their staff – all of whom are intent and well-intentioned but all of whom appear to have critical time-management issues in their offices. “Thanking” a donor – not just a form letter but in person, a phone call, a hand-written note – is one of the things that seems to slide in the hurry to deal with the next event or crisis. It’s also true that “loud” donors who demand attention often distract the development office from paying attention across the entire field of givers.

    Colleen – I’ve been really pushing on my clients to adopt true CRM systems – Blackbaud, Classy, CivicCRM, Salesforce, Hubspot – because as you point out we are connected and these systems, even if only used at a fraction of their power – allow organizations to manage the life cycle of the donor with intelligence, automation and planning. Setting reminders, scheduling calls or meetings, getting alerts that a donor has given, or has been out of contact…. Yet many of the organizations are unable to grasp the benefits of these systems or don’t bother getting any training on them so they sit, idle and unused.

    I’d be really interested in a future IMPACTS study about the use of this kind of technology in organizations across the country. My guess is that something like 85% of non-profits over $2M have CRM systems installed but that only about 15% of them know how to use them….

    Thanks for the great article – again!

     
  2. Trish

    Thanks for putting this into words Colleen! The not thanking donors was sort of used where I used to volunteer. In order to save postage costs, that organization discontinued thanking people for renewing their memberships. And of course, if you did a lot of volunteer work, they often did not show their appreciation until you had been doing it for decades. When I left (for a paying job) I had to remind them that they should somehow honor me at one of their membership get-togethers. I felt really bad for doing that, but that was the only way they publicly acknowledged both the work I’d done there as well as the fact that I was leaving. It was truly not the way I’d recommend that any organization acknowledge their donors (of time or money).

     
  3. Richard

    I do agree with you. However, my biggest complaint is when an organization provides services to the public schools, businesses and local government…..were is that organization’s “Thanks”! Corporations, City and County Government are giving little or no funding theses days. And who is the loser in this situation…the citizens, businesses and City and County governments. Our children learn more in the streets, our businesses are empty and boarded up and our government officials are giving us nothing but “BAD NAMES”.

     
  4. Peter Roberts

    I received an inscribed fountain (!) pen after 3 years of volunteering on the organizing committee (thousands of hours) and $10,000 in cash donations to the organization. Most valuable of all acknowledgements, the ongoing friendship of other volunteers who I would not otherwise have met. Yes, donors are “self-interested” – it’s human nature.

     
    • Noelia

      Just curious, Peter Roberts – you mentioned an inscribed fountain pen as an acknowledgment of your volunteer work. Do you consider that a worthy gift or not? It’s hard for me to read the tone of your comment…

      As someone who has worked for a cash-strapped and staff-short organization, the first words out of my mouth were always “thank you,” and occasional small tokens of recognition were more rare than they should be. What is considered a worthy gift to celebrate a donor at every level? I realize that some orgs invest whole salaries in having someone who just manages donors. Some do not have the luxury. We do what we can with letters, public thanks, and personal expressions of gratitude.

       
      • Peter Roberts

        Hi Noelia,
        I would describe the inscribed fountain pen as a “thoughtful” gift & momento, since I was often “scribe” secretary to produce minutes of the volunteer meetings. And the notion that a fountain pen is meant to last for a while, since the ink chamber is refillable, rather than discarded, has some tinge of legacy connecting me and the organization, I guess.
        Still have to find a stationary store that sells bottles of ink. 🙂

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