Building long-term relationships – life time value etc

All fundraising work should have the long-term view in mind. With many types of fundraising, an initial gift will not necessarily cover the cost of generating it, but can be the first step in an important and profitable relationship. It is vital, therefore, that you look after your supporters and think carefully about how and when to approach them for further gifts.

There is an established theory of giving that demonstrates how supporters may be moved from a small gift, up towards bigger and longer-term support. This is called the donor pyramid and is copied below:

Fundraising diagram

What the pyramid shows is that you will probably start with a small gift. The higher up the pyramid, the less people you will have, but the greater the gift will be. The longer you can keep someone on this journey, the greater the return on your initial investment will be. It is important not to get too stuck on this though, it is one common theory and not all cases will work like this.

More generally, it is true to say that with many techniques, such as direct mailing, response rates can be very low. Success is achieved by sending out high numbers of requests so that the response is sufficient in number to make a profit. Warm donors (those that have previously given) will respond in higher number than new (or cold) prospects.

The most secure, and very cost-effective, way to build a long-term relationship is to get supporters to commit to a regular gift. This is then income that the organisation can reasonably plan for and this will improve sustainability and the chances of more gifts further down the line. There are many ways you can encourage regular giving, the most common of which are below:

  • Regular (usually monthly) payments from their bank account.
  • Membership schemes where the donor gives regularly (usually annually) in exchange for certain benefits or access to the organisation.
  • Sponsorship of an area of your work. By sponsoring an individual, family or community (perhaps even a building), a donor is linked to an area of your work over a period of time.

To encourage regular gifts you will need to:

  • Stimulate their concern for your cause.
  • Help them realise the need for long-term support – your work may take time to yield results and you need the security long-term giving provides.
  • Make it easy for them to give regularly.
  • Reassure them about the value of this support by sending updates. If possible, you could invite them to an event where they can see the work of the organisation for themselves. Be careful to listen to what the donor wants though and not to be seen to be spending too much of their donation on the updates.
  • Once you have a number of regular gifts, you need to look after your supporters properly. This will not only keep them giving but improve the chances of them increasing that gift over time, getting involved in other areas such as community fundraising and possibly leaving the organisation a legacy.

Initially, donors should be thanked for their gift. This should happen quickly and be sincere. For larger donations, a telephone call can be the best way to approach this. It is personal, but also gives you an opportunity to find out motivations for giving and the chances of them doing so in the future.   Alternatively, you could thank by mail, e-mail, in person, via public recognition (for large gifts) or a combination of the above.

Steps should then be taken to involve supporters in your organisation. The more they understand the cause, the issues, problems and the people involved, the more likely they will be to make gifts. There are a number of ways to keep donors informed:

  • Regular mailings. These can be to keep in touch or ask for further financial support.
  • Invite them to lectures, talks and other events.
  • Involve them in your fundraising. Can they ask friends to support or undertake an event for you.
  • Campaigning and advocacy work.

 

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