INTRODUCTION

Lapsed donors should be a substantial focus for non profits in 2023. There have been troubling statistics that show that all retention rates are down. Organizations are losing donors and strong stewardship efforts are more important than ever. This article will provide some advice on how charities can reignite their relationship with lapsed donors.

According to the Fundraising Effectiveness Project (FEP), the Q3 2022 (JAN 1, 2022 – SEP 30, 2022) reports that all types of donor retention rates are down. New Donors -14.8%, Repeat Donors -5.4%, and Recapture Donors -15%.

 

WHAT IS A LAPSED DONOR

A lapsed donor is someone who has donated to your organization in the past but has not donated again for a significant amount of time. The average amount of time that is considered lapsed is 365 days. A lapsed donor could be any type of donor: major, small, micro, and one time. There are many reasons why a donor becomes lapsed: a change in their giving limits, priorities change, they experience a lack of stewardship efforts, or they simply haven’t been asked for donations. The good news is that it is possible to have a lapsed donor give again! Furthermore, it is easier to reengage a lapsed donor than to find a new donor because you have already built a relationship with them.

We always recommend donor segmentation and making sure your donor data is stored and organized, so you should most definitely include a segmented list of lapsed donors. This way any lapsed donor outreach can be personalized and more authentic, increasing the chances that they will donate again.

FIND OUT WHY THEY BECAME LAPSED DONORS

Once you have established who your lapsed donors are, it is beneficial to determine why they became lapsed donors. There are a few ways to collect that information. You can send out a survey, invest in a deceased suppression process, and inspect the data from your CRM to determine patterns that could be the reason your donors became inactive.

COMMUNICATING WITH LAPSED DONORS

Stewardship is key, so always say thank you for any size gift. The type of language you use is important when you communicate with lapsed donors. Remember that inactive donors don’t think of themselves as inactive, they see themselves as having previously donated to the cause. That is a good thing though! Even if they only donated one time, take the opportunity to highlight that and use encouraging words. Make sure to stay away from language which might make them feel guilty and set a positive tone. One course of action you can take is to send out a “we miss you” message/letter.

Positive Phrases To Use:

We miss you

You make a difference

You’re part of the change

You make an impact

Let’s reconnect!

You’re part of the community!

Another course of action you can take is to send out  a survey that identities when and how often you should communicate with them:

Once a year

4x a year

Once a month

By email only

By phone only

By direct mail only

INVEST IN STEWARDSHIP EFFORTS

Remember your donor retention skills! Maintain a personalized approach, and avoid cookie-cutter looking stewardship, handwritten letters are a way to do this. Use your donor segmentation lists and base your solicitation efforts on your inactive donors demographic.

Keep in mind that life changes, people move, change their names, change their phone numbers and even their email addresses. So make sure to do your best to keep their information up to date. Communicate with lapsed donors to check their information in your system and if possible, provide a way to update it.

As we mentioned earlier, if a lapsed donor only gave one time, they still have an affiliation with your organization. To nurture that relationship you can keep them up to date. Send them newsletters, impact reports, community testimonies, and success stories multiple times a year. It goes a long way to take the time and care to design readable, organized, and on brand pieces of literature.

DON’T BE AFRAID TO ASK!

With the use of all your stewardship efforts, it’s time to seal the deal and make an actual ask! Keep in mind, you are not limited to asking for just donations. You can entice them back into the community by inviting them to an event as a guest or even as a volunteer. Remember that one of the reasons a donor becomes inactive is because they don’t have the capacity to donate at that moment, but you can stay positive that they still want to be part of the organization. Remember to “TREAT YOUR VOLUNTEERS LIKE FUTURE DONORS”.

In 2023 there are a plethora of ways to get in touch with your lapsed donors, email, phone, text, and direct mail. To really invest in stewardship and maintain an authentic connection, personalized and handwritten campaigns show inactive donors you appreciate their support.

What to include in your stewardship efforts:

A Positive Phrase

Newsletter keeping them up to date

An ask (Donation or way to be involved)

Donation card & reply envelope

A QR card leading to your website and donation page

An address to send cheques or letters to

Phone number

Names of communication representatives

Lots of gratitude

WRAP IT UP

We had a discussion about turning your inactive donors to active once again. Once a donor becomes lapsed, there is still hope for their return because you already got over the hardest part which was their initial donation. In this article, we tackled what a lapsed donor is, how you can determine why they became inactive, communicating with lapsed donors, the importance of investing in stewardship, and how an ask can be more than just a donation, it can be asking to participate.

According to the 2022 Third Quarter Fundraising Report (FEP), there has been an increase in donations by 4.7%, but a decrease in the number of donors by -7.1% a continuing trend. Nonprofits will have to rely on the bulk of their donations coming from fewer donors.

 

Consistent and reliable incoming funding is at risk. Although charitable giving increased in 2022, the number of donors decreased. It’s important in 2023 to make an effort to keep up your organization’s number of donors. We have covered Donor Retention in the past but now it is also mission critical to increase donation numbers by gaining new donors.

So let’s walk through how you can conduct prospect research, present social proof, reach out to one time and lapsed donors, and the importance of treating your volunteers like future donors.

CONDUCT PROSPECT RESEARCH

Prospect research can be referred to by a few names: donor prospecting, screening, or donor research. This research technique is used by major gift organizers, nonprofit fundraisers, and development teams. Their goal is to pinpoint high-impact donors inside and outside of a nonprofits donor pool.

Benefits of Prospect Research:

1. EVALUATE DONORS: There could be potential major donors within your donor pool
2. FIND NEW PROSPECTS: Expand your reach by researching for potential donors
3. REVISE GIFT STRATEGY: By screening your prospects, you can build a robust gifting system based on donors that are more likely to donate
4. ENHANCE FUNDRAISING ACTIVITIES: Analyze donor data to highlight fundraising trends to create successful activities
5. DISCOVER CORPORATE GIVING OPPORTUNITIES: Discover donors with eligible corporate giving incentives such as – volunteer grants and matching gifts
6. FILL GAPS IN DONOR DATA: Update outdated and empty donor information

Types of Prospects:

1. Individual Donors: One time, annual, recurring
2. Major Donors
3. Corporate Donors
4. Foundations

How to do prospect research:

• In-house prospect research: Staff member or full-time research staff take on the responsibility of conducting prospect research
• Work with prospect research consultant
• Partner with prospect research screening company

PRESENT SOCIAL PROOF

Showing social proof is an authentic technique to attract new donors. In an article by Alfred Lua from Buffer.com, social proof is a psychological phenomenon when the actions of others give credit to the situation. For example: a potential donor is more likely to give to a charity that their friends also give to.

There are a few types of social proof: Expert, Celebrity, User, Crowd Wisdom, Friend Wisdom

5 types of social proof in the nonprofit industry with example:

Expert: Doctor who works for a hospital explaining allocation of donations and how it has helped patients
Celebrity: Public figure that has an affiliation with organization and donates on a regular basis
User: Community testimonials
Crowd Wisdom: Showing number of donors
Friend Wisdom: A friend that donates to a specific charity

Showcasing social proof can be done in a multitude of ways, whether you keep it simple and show more depth. You can include community testimonials in your direct mail campaign, post a video of a volunteer talking about their experience with your nonprofit on social media, or even have a recipient tell their story at a fundraising event. Storytelling  is perhaps the most powerful form of social proof. It can evoke emotion in potential donors that leads to them feeling more passionate about the cause.

REACH OUT TO LAPSED AND ONE TIME DONORS

Circling back to the statistic above proving that charitable giving increased in 2022, but the number of donors decreased. It is vital to be cautious if you only rely on a small percentage of major donors and to remember that small donors are important too. 

Make an effort to reach out to one time and lapsed donor because even one donation is the beginning of a relationship. It goes a long way to communicate to donors and let them know they helped out, and that they are a part of the cause. Nurturing your relationship to small donors will go a long way with maintaining incoming donations. Your solicitation endeavours to one time donors could turn them into recurring donors. Invest in your relationships with big and small donors.

TREAT VOLUNTEERS LIKE FUTURE DONORS

Let’s not forget about the importance of volunteers! Your volunteers are potential prospects that could easily become new donors. They have an established relationship with your organization and have already displayed their passion and commitment to the cause. Always remember to follow up with your volunteers because they are what keeps your nonprofit organization going. By staying connected to your volunteers, you are strengthening the relationship and giving them a memorable experience with your organization. This goes a long way for their future as a donor.

Deliver a personalized follow up to your volunteers as a gesture of gratitude. There are various ways to communicate with volunteers, a phone call, an email, or a personalized handwritten letter or note. The more genuine, the better. Timing is also key, so ensure to follow up as soon as possible after an event or campaign.

What to include in a follow up:

1. A heartfelt handwritten thank you
2. Their impact on the cause
3. A way to provide feedback (survey, email address, phone number, etc)

FINAL THOUGHTS

With the increase of giving but decrease in number of donors, donation stability is at risk in 2023. The focus this year should be on gaining new donors. The strategies we discussed are improving your donor data by conducting prospect research, presenting potential donors with social proof to show legitimacy, making an effort to maintain a relationship with lapsed and one time donors, and treating your volunteers like future donors.