101 – Donor Retention Secrets with Katherine Lacefield

Episode Transcription

David Pisarek: Get ready to uncover some of the most overlooked fundraising secrets and discover how collaboration can supercharge your non-profit’s success.

Welcome to the Non-Profit Digital Success podcast. As always, I’m David; I’m the host, and in this episode, we’re going to be talking all things fundraising and collaboration with Katherine Lacefield.

Katherine, with over 20 years of non-profit fundraising experience, is the founder of Just Because Consulting and the host of the Just Because podcast. Known for her mobilization skills and enthusiasm for fundraising, she focuses on the power of collaboration to boost revenues. Katherine, thank you so much for joining in today. How are you doing?

Katherine Lacefield: I’m doing great. It’s a nice Friday.

David Pisarek: It is. All right, let’s jump in and get going. What are some of the most ignored aspects of fundraising from your experience?

Katherine Lacefield: There are really two that I wanted to bring up today that I find the most annoying but most necessary things that non-profits tend to forget. One of them is all-around donation and stewardship.

What I’ve noticed is that so many non-profits are focused on that first donation and that they don’t remember or don’t implement strategies to really build up their relationships through time.

I always make this connection to the dating world that everyone is so obsessed with getting that first date and having the best impression, but then they forget about how to build up that relationship to get a second date and build a long-term relationship.

We’re very much in this consumerist mindset around donations that I think really needs to change so that we can build longer-term relationships, which will also lower your fundraising costs because it’s been shown that retention of your donors costs a lot less than constantly acquiring new ones.

It’s also much less exhausting. I’ve noticed so many people are rushing out, like, You have to get new donors. They’re like, but what about all the donors we had last year? What’s happening with them? Oh, well, we’ll send them an email.

I’m like, Okay, we can build. How can we build up on that? That’s definitely something that I think needs to be worked on more. Then, of course, number two is this whole aspect of collaboration.

A lot of times we feel like the non-profit space is all about competing with other non-profits with similar missions or that we’re competing for these donor dollars. We have to be the ones that are in front of everyone. We need to be the ones that are known for being the best in that cause.

In my opinion, this could be very toxic for the non-profit sector because aren’t we all striving to make this place a better world? You know what I mean? By constantly fighting amongst each other, we’re missing out on a lot of opportunities for collaboration that could raise up both non-profits in different ways.

Those have been the two most ignored aspects I found in fundraising of helping you mobilize your existing donors to bring yourself forward. Also, how you can mobilize your potential partners in your field or in your sector to really bring yourself up to a next level.

David Pisarek: I love that idea of collaboration.

I think a lot of people have what I would call a scarcity mindset around it. If you are doing this thing, whatever it happens to be, there are other organizations that are doing that, maybe in your city, if you live in a larger populated area or another city or another state, province, country, whatever, there’s other organizations doing what you are doing.

And if you can find a way to connect with them and make whatever the fundraising thing is that you want to do bigger because you’re bringing in other people, it’s going to help everybody more. We need that abundance mindset with all of this, and that really does help a lot.

Katherine Lacefield: It really does. And not only from a fundraising perspective, but from a bringing up your cause perspective.

And I’m going to tell a story that I think it’s so heartwarming and so cheesy, but it really showcases the importance and potential for collaboration from both a fundraising and a cause perspective.

There was this case in Hawaii that one of my friends that works in the non-profit space shared with me where there was a shelter that was having a really hard time placing animals into foster care.

A lot of animals that tend to get into shelters either they get sick because of the stress, and they tend to get very easily treated but very communicable diseases while they’re in the shelter. So they need to be placed into temporary homes. But also by placing these animals into foster care, they’re also freeing up space in the shelter so that they can constantly accept more so that the euthanasia rates go down. They were having a really hard time placing these animals in foster care.

And then on the other side, you had youth protection, where they were having a really hard time placing with children that are being placed in foster families. So what they ended up doing is creating this partnership between foster families for children and shelters where they actually encouraged the foster families to take in animals.

What they realized is that it helped the child understand his or her situation better by seeing this animal is stressed like me and understanding that it was a new environment, that there was an adaptation period. It became this tool for conversation, but also for the child to not feel so alone in their situation.

From the first perspective, animals were being able to be placed into more homes. Children are being able to understand their own emotional situation and deal with their emotions in a better way. So that’s just a win-win right there.

But then, second of all, these organizations, and I think specifically the animal shelter because the other one was more like government services, they were able to get more fundraising and funds for this project because it was no longer just for animals. It was also helping children, which is a very popular cause. So they were able to really increase their impact, but also their fundraising potential by collaborating with a different type of organization.

David Pisarek: I would love to have been part of the conversation around brainstorming around what they can do and then just a fly on the wall as that idea percolated and came to reality. That would have been amazing to be there.

Katherine Lacefield: How to figure out, was it an idea that popped up or was it just people were having these conversations and how they ended up building this partnership? That would be an amazing case setting that I should probably look into doing. That would be so cool.

David Pisarek: That would be really cool.

Katherine Lacefield: Yeah, 100%.

David Pisarek: I have a workshop that I run every so often. I ran it about a month and a half ago, but around how to build corporate sponsorships for non-profits. And it’s a very similar thing. You need to understand your mission to align it with somebody else’s mission to make sure that it works.

So whether you’re talking about big business, mom-and-pop shops, or other non-profits, you need to really understand where you stand and where they stand to see if it would be a good fit. And it’s not to say that you both have to be doing the same thing, but if there’s some related cause between the two of you, then it’s easier to form that collaboration.

Katherine Lacefield: Exactly. The same thing can be said about grantmaking organizations or foundations, and even individuals.

You have to try to see what bridge can lead to build between our two organizations or between our two entities or two people. A lot of these relationships are based on how can we be mutual in our exchange? It’s not about we need your money because we’re going to go do something great. Maybe these people or these companies or these foundations are also doing similarly good things in their communities.

Then it’s about, well, working together and seeing more as a partnership instead of a more transactional relationship, we’re able to build up a stronger, longer-term bond. That’s when it brings it back to this idea of retention and stewardship; if you really want to have a long-term impact and build up these collaborations and partnerships, it can also start from a donor-donor relationship and then build up into something greater that can have much more impact.

David Pisarek: Yeah. I mean, you can look at your large donors also. Where do they work? Maybe you can get some volunteers to help with something. It doesn’t have to be money. It could be like, how can you leverage people that are part of your inner circle or concentric circles right now, however far you want to go to help the cause in any way? It could be a once-every-quarter, “we’re going to have you bring five people down to the shelter to help with this,” that, or whatever, or to put food baskets, hampers, whatever you want to call it together, or things like that. I think it’s really important.

One of the things that I think is also important is talking about segmentation and understanding that piece of it. Where does that flow into fundraising? Do you think it’s important or not important to do?

Katherine Lacefield: I think it’s necessary to do. As much as we have different types of relationships in our personal lives, we have our friends, we have our family, we have our work relationships, they will all be treated differently, and they will all have different things that they bring to our lives. This is the same thing with your donors.

A perfect example of your corporate donations. Maybe a lot of companies are more likely to give you in-kind contributions or even gifts of their time or of their services for free. You have to, in your database of dollars or in your CRM, have a way of segmenting the different types of donations you’re receiving so that you can then target them in different ways for your fundraising campaigns.

If you’re doing sponsorship and you want corporate donations, I hope that in your database, you’re able to identify who has given you in the past cash donations versus in-kind because if historically a donor has only given you in-kind donations and you only send them cash donation opportunities, it’s kind of disrespectful to what they’ve been giving you in the past and also makes us likely to succeed.

So segmentation is a necessary first step to be able to personalize your approach of donor retention so that they can continue their relationship with you and continue giving in a way that they’ve historically been giving, but also sometimes build it up through time.

When I work with a lot of non-profits around, okay, what would segmentation look like? I usually start with the three basic criteria that you can start thinking about segmenting your donor database. Of course, the number one is going to be around also the amount of donations that they’ve been giving.

Yes, it’s important to treat some of your donors that have been more significant from a financial perspective differently because the investment of time that you will take engaging with these donors will have a much higher return on a dollar perspective. Number one, you can segment your database based on your major gifts or important gifts versus your maybe middle tier. Those are like almost there.

Let’s say if your limit is $1,000 for a major gift. I know for some organizations, that’s small potatoes, but for some, it’s maybe more significant. But what about those that are like $750, $800? They’re like getting there. So you still need to treat that second tier a bit more closely or more personalized to get them to switch into the top tier.

And of course, it doesn’t mean that we’re ignoring the third tier. It’s just that we might have more mass mailing or mass emailing-type campaigns that will still recognize their support but in a lesser resource-intensive way.

So number one, money. Number two, it could be around the frequency of their gifts.

So a donor that has maybe given smaller donations but has given to you every year, consistently for 15 years, is someone that you need to keep closer to and recognize more than, let’s say, someone, yeah, they gave a $2,000 gift, but they gave it once a couple of years ago.

So taking into consideration the frequency of the gifts is another way to segment to be able to give more importance or to invest more energy, I would say, into certain groups that have shown that they’re committed so that you can really encourage and support that commitment, that loyalty that they’ve shown to your organization.

The third one that I usually recommend is also from recency, so the date of their last donation. So dating, once again, if someone’s given you five years ago or if you’ve been on a date with someone five years ago, it’d be strange to just randomly be like, “Hey, you want to go on a date today?” What’s going on? They’ll be like, “Wait, what’s this creep?” For non-profits, you have to make sure to, of course, maintain that relationship over time.

But understand that even if they made a major gift, if it was five years ago, you have some relationship-building to do before you make the ask. Segmenting your database based on cold, warm, and hot, for example, will allow you to do different strategies and be more logical and also have a much higher conversion rate with your strategies if you’re respecting where those donors are on the timeline. Those are some of the factors that I think need to be taken into consideration when you’re segmenting your donor database.

David Pisarek: Made a bunch of notes as you were talking. And I love the idea that you just ended on. And I’m going to call that personalization.

If you can connect with somebody and they feel like you understand them, you have a better chance of convincing them, whatever it happens to be.

Car salespeople are amazing at this, the ones that are really good. They really understand your name, and they push you into or try to, anyways, get you into the next car. Katherine and I were talking about cars earlier. If you can create that connection, you build rapport. They like you more than they did before, even if they really liked you before.

So I think building rapport and having personalization is really key. Part of what you were talking about was connecting with people who are longer-term donors. So I’m going to call them the loyal donor. We want to give them a persona of some kind. Reach out to them. Find out why have they been giving you for four years, five years, 10 years.

Understand what is their connection with your organization. We know that people who donate to a cause typically have a very personal reason why; either they were affected by something, or they know somebody that was affected by something, and that’s why they give to the causes that are really close to them.

So if you can really understand why they’re giving, you can tailor the messages. You can weave in stories that evoke some emotional reaction with them so that they understand the care and the impact that your organization is having so that they, even if it’s $50 a year, understand what their money is actually doing. You don’t just hit them every three months for a donation. You can’t do that. It’s not going to sustain.

Katherine Lacefield: No. The whole idea of personalization is that people give, and they like feeling seen by everyone. Anyone else wants to be that special snowflake, right? It’s still a big part of the psychology that we need to realize and implement into our strategies.

If I don’t feel like you know who I am, then I don’t feel special. I don’t feel seen.

I think that is a very important strategy. Of course, there’s the caveat of donors also need to understand that sometimes these organizations are dealing with many different donors and stuff. There has to be a balance between the two. Also, we have to recognize that not all organizations have the same capacities and resources to personalize it as much.

However, there are some very simple things that organizations can do from the beginning: start creating these automation systems using different automation tools that can just allow you to tag different donors into different categories.

Just like monthly donors, send them monthly donor emails. That’s a very big category that people will still feel that you recognize their type of donation, or you can have different fields that are automated like you’ve been giving for X amount of years.

These are things that depending on your CRM, of course, I hope you’re not using Excel, but I know that many are still using spreadsheets, but you can still have these things that even if there’s a couple of fields that you decide to focus on that can make people feel special.

I’ll give a little personal example of what not to do or what happened to me in the past when I was working in an animal shelter (I have a lot of animal shelter examples because I worked in the field for a very long time). I was working there. I was an employee. I was a foster family, I was a volunteer.

I was coming in every day to help walk the dogs, and I was just very involved. I even did my own fundraisers for them. I was very actively involved in the shelter. I remember getting a phone call, and it was obviously a company that had been hired to do fundraising for them by phone. They just did their regular spiel to me as if I didn’t know what the shelter was. I was just like, “I work there, right? I know all of these stories.”

I just felt so insulted, almost, that I hadn’t been tagged as, like, this person is an employee. She’s been here for four years. So I didn’t donate to that campaign. It doesn’t mean I didn’t donate to the shelter in other situations, but that lack of recognition of how involved I had been was hurtful. So it made me less likely to give.

So if you have that in mind, when you’re going to be taking notes in your database of your volunteers, make sure that these tags are there. Are they also a volunteer? Are they an employee? Are they a foster home? Make sure that your different sets of data are talking to each other so that they’re not separate.

This is something that there are digital tools that are so much help, so much easier to do now than when I was working there 10 years ago, that it’s so easy that if you’re not doing it, then it’s almost more insulting now than it was before.

David Pisarek: For sure.

One of our clients, they’re a national organization, and they support a bunch of international crisis-related things that happen. If there are floods in whatever country, this, that, whatever, they raise money, they send it there, they send support, all that stuff.

Unfortunately, there are all kinds of crises that happen. Imagine if you could tag people when they donate to that specific cause, the category of that cause. So was it a cause about people? Was it a cause of food? Was it a cause about shelter? And then you can tailor those messages, possibly.

Maybe you have generic messages that you send, but every once in a while, you can send something out that’s very specific to that because you know they donated to that cause, and that is something that’s really close to them. And that’s how you can hyper-personalize these things.

Katherine Lacefield: A 100%.

I have a similar example of a client I work with reselling, who also does international cooperation. They noticed that there was a lot of influx of new donors around the big earthquake that had happened in Haiti. And they noticed that a lot of those donors never gave to any other cause after. They were there because of that cause.

So had they been tagged, let’s say anything that happened with Haiti in the future, they just were targeted for that. I’m sure they would have seen a higher retention rate. This was, again, you can choose the types of categories you want to focus on. Is it going to be the type of… Let’s say they only give to earthquakes, versus they don’t give to tsunamis. I don’t think that’s going to be a thing, but hey, we could tag the campaign based on that.

You could also base it on the region. If it’s more in the Caribbean, maybe it’s because they’re actually from the diaspora; they come from that region. For them, they have family there. That’s why they’re giving to that cause. You might want to do country-specific. You can really go deep into segmenting to have all these different categories.

That doesn’t mean that you’re not going to send your fundraising campaigns to people who’ve never given to an earthquake before. But it’s just that you might have a targeted message to those who have specifically given to similar campaigns in the past like, “This is a cause that you’ve donated to in the past. We are asking for your support again.” Then people feel, “I did give to that cause. Yes, I would like to support it again.” It’s all about, like you said, targeting specific groups and personalizing the messaging just a little bit sometimes to make them feel more seen.

David Pisarek: Okay, so you mentioned before about CRM, you mentioned Excel or spreadsheets. While working at one of my past employment places, one of my tasks was understanding anti-spam legislation. I went around, I met with all the departments. “Do you have any list? Do you have any list?” I think there were close to 20 lists across the organization. A whole bunch of them were in spreadsheets and stuff.

So I totally understand people might not have the access to money or the tech savviness to be able to implement a CRM customer or client relationship management tool. I like to call it a DRM, a donor relationship management; nobody knows what DRM is—digital rights management.

Well, another podcast we could talk about. But when you think about tools, there are some big players in the market that have been out there for decades. It’s hard to switch off those platforms. But I think a lot of the folks who listen to my podcast here are smaller organizations with a lot smaller budgets. Are there any tools that you would recommend for segmenting, maybe stewardship to help with the fundraising?

Katherine Lacefield: Yeah, for sure. There’s a lot of platforms.

I think the one that’s really been up and coming in recent years, that’s very accessible, very easy to use, is Zeffy. If you don’t have a CRM, this can be a very easy first step into just starting to manage your donors. All of them will be in one place. It’s free to use. Of course, it’s one of those platforms that, instead of charging the non-profits, ask the donors to give a tip or to add a percentage of the donation that’s going to go to cover the cost. But it’s optional.

So it still keeps the cost of the technology very accessible to non-profits and asks donors to support and add on, instead. So I think that if you need a CRM to start, that’s a great place. It’s definitely not focused as much on the CRM component. It’s much more about getting people to donate. So you’ll get your donor management offer at the same time. But if you’re just using Excel, use it for now. There’s the in-between.

One of the tools that I found the most helpful? I actually just set it up for a client recently if you don’t know Zapier yet, or I don’t know if anyone else pronounces it differently, like, say, “Zapier,” it’s really allowing you to connect different platforms together.

I’ll give you an example that I literally just set up for my client yesterday where he uses Zapier to connect Zeffy, which is the CRM, and his MailChimp account. We set up a thing so that whenever someone makes a donation, there’s a Zap, so there’s a little command that is sent out that will add that person’s email and information to his MailChimp account.

But what we made is that I wanted only the new donors. I didn’t want people who were already on the list because what I was hoping to do with that Zap or that connection was to send new donors a specific email series because then they may not know the organization. Somebody who’s been giving for 15 years, I’m not going to send them like, “Hey, do you know this organization?” That would be strange.

But what I wanted them to get is a specific email onboarding series so that they will feel warmed up to the cause so that when I ask them for that second donation in a couple of months, they’ve already had some chance to get to know the organization and feel more invested. With these tools, what it allows me to do is have a command of like, okay, someone makes a donation, they get sent to the database. But if they’re already an existing contact, nothing happens.

This is where this can fit in. Of course, there are tons of commands that I could do to send an automatic thank you email to everyone, or if they do this, this happens. It’s all these amazing automation tools that can be set up by yourself or by people like us that could help you create these systems so that they’re working on their own.

But people don’t necessarily think about that.

When they get their automatic emails, it still feels personal. “Hey, thank you so much. You just made your first donation to our organization.” “How did they know I was the first?” You know what I mean? It just makes people feel special, which we know deep down.

We know there are automation tools when people say, “Comment this, and I’ll send you the guide” on Instagram. We know it’s automated. We’re not silly, but it still makes our lives easier and makes us feel more like a personal connection.

This is just one example of something that you can easily set up. Zapier is great because it connects with so many tools. As these two platforms talk to each other automatically, Zapier can make those connections. Those would be maybe two of the main things that I would recommend.

David Pisarek: Yeah, I love automations. I love connecting systems. I’m going to tell you that it’s called Zapier. That’s how I pronounce it because you create zaps in there.

Katherine Lacefield: I know. By the name Zapier, it sounds fun.

David Pisarek: It’s all good. It doesn’t matter. But it connects, I think, over 5,000 different platforms together.

So for some of our clients, what we’ve done when there’s a new contact created, I’m going to call them onboarding email journeys. So three or four emails over the course of maybe 10 days, 12 days, something like that, so that they understand more about what you’re doing, the impact you have, that thing.

But also, what we’re using it for is when there’s a new blog post or a new news release, you can use this.

And if your site is WordPress, for example, have it automatically create a campaign that you can then go edit. Never have it actually sent out automatically from something like that because you want to review it, but you can have it automatically do that. So you don’t have to go and copy and paste stuff and put images. You can just automate all that and save yourself a whole whack of time.

Zeffy is a free platform. We’re partners with Zeffy, so I’ve got a little bit of the back end there, but they worked out a deal with Stripe, where Stripe covers all the fees.

So even if the donor doesn’t say that they’re going to cover that fee, it’s still free. So that’s their model. How they’re making money is anybody that says that they’re going to check it off, that money stays with Zeffy to help run the platform and all that. So it’s super, super awesome in that way.

There are some of these donation platforms out there that you can actually build smart forms with.

So, for example, Katherine, if you made a donation to this organization for, let’s say, $50, the next time that they send you that campaign, from the organization side, they can set it up where it will automatically increase the default values by 10% or 15%. So it’s, say, $55. Be like, “Yeah, I think I did that last time.” “Okay.” And just by leveraging some tech, you can actually start increasing the donations over time. You don’t want to keep increasing it every single time, but you can figure out when to do that.

And I think it’s a very smart move to have a CRM in place that can detect that stuff and help you make some smart decisions.

Katherine Lacefield: Well, even just having your donor data, obviously, maybe not your credit card information necessarily, but ideally, if you could even say everything’s there, all you have to do is click “Donate.”

Simplifying the process—that’s what stores do. Amazon, you can just make one-click purchases. Why can’t we do this for donations where it just simplifies the process of like, “Okay, you’ve already given. Here’s the information, double-check, all good.” “Oh, yeah, that’s so much easier. It’s already filled out.”

The number of times where I have to fill it out and then I have to change pages and click this. It’s just we live in a very fast-paced world. The faster you can get people to just have it done for them, the more likely they are to succeed in making a donation to your organization.

Also, if you can personalize after a certain amount, let’s say, that you would recommend the next time ask them for a monthly donation instead.

You can personalize your ask. Let’s say they made a donation of $120 last year. You can maybe ask, “Hey, would you be comfortable with making a $12 monthly donation instead?” That way, it’s easier to manage your budget. Also, it gives us the stability that is required for non-profits to actually invest in our longer-term projects.

I love the idea of personalized forms. Really, this is where segmentation can be so helpful. Once you understand who is in your database, then you can target them for different things.

Even if, God forbid, you’re using just your Excel spreadsheets, it’s, of course, a lot more manual work. I’ve done it for many organizations that had 10 years of data, but in 10 different spreadsheets, and I merged it into one huge spreadsheet, and I was able to see, “Okay, this Karen here has given for six years, so she’s going to be segmented as this.”

Once we had all that data in spreadsheets, we were still able to tag them manually into their email management tool.

For example, these are category two or two-star. You can still do it manually if you don’t feel comfortable or don’t have tech privacy. There are things that you can do to support your stewardship and build strong relationships with your donors.

David Pisarek: One little, I’m going to call it a pro tip here.

If you’re using spreadsheets, whether it’s Google Sheets or Excel or whatever, pivot tables will be your best friend because then you can create other lists based on tags, based on dates of last donation, based on whatever it happens to be.

So you can do it. But yeah, Katherine, you’re shaking your head. Reach out to one of us. We can probably help you with the pivot tables if you need some support around that. A 100%. Absolutely. Fantastic. I think there have been some really, really great insights here today.

I hope that people listening to this episode have gotten at least one golden nugget to walk away with to help them in their donor stewardship and fundraising capacity in some way there. If anybody wants to reach out to you, Katherine, what do they need to do?

Katherine Lacefield: They must do a little rain dance outside and call for the fundraising queen. No, I’m kidding.

Of course, I’m very active on LinkedIn. Katherine Lacefield, you can find me. I accept all requests unless they’re really sketchy, and I love answering people’s questions directly on LinkedIn.

If not, on my website, justbecause.consulting, you can find a way to book an exploration call with me. I love just what we did here of like, “Okay, what’s your problem? Let’s find solutions.” My exploration calls are not sales calls. They’re really just like, “Let’s touch base and try to give you some advice in that 30 minutes.” If you still want to continue after it, then we can talk business.

But also, you’ll be able to find my own podcast, Just Because podcast, where I also give advice on fundraising more specifically. But also this will be a collaboration between organizations and help them build up your non-profit.

David Pisarek: Thanks again so much for joining, Katherine. It’s been great having you here on the Non-Profit Digital Success podcast.

To everybody listening, if you want any of the links to some of the platforms or things that we talked about or to Katherine’s LinkedIn or website or whatever, just head over to our podcast page at nonprofitdigitalsuccess.com. This episode is for all the details.

And until next time, keep on being successful.