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Development Dilemma: Asking Donors for Second Gifts

In our weekly column, consultants with decades of nonprofit experience answer your questions about fundraising, boards, strategy and more. To ask a question and be featured (anonymously!) in the column, email your questions to info@twbfundraising.com.

This week’s question will be answered by Anne Smith.

The Dilemma

Should I ask donors who have already given for a second gift? 

Anne’s Response

The short answer is yes. There is a good reason why, but it’s the how that can make all the difference.

Why is Asking for a Second Gift from a First-Time Donor Important?

Research has revealed that only 2 in 10 first-time donors will make a second gift to the same nonprofit organization, but if they give a second gift, they are 63% more likely to give again. They move from giving because of a special event/request or fleeting inspiration to giving intentionally to support your mission.

Retention of a first-time donor averages 23% industry-wide.  It’s a challenge to surpass that rate without a second gift.  Below illustrates how quickly the donor jumps up in retention after their second gift.

(Illustration by Bloomerang: https://bloomerang.co/ and data from Fundraising Effectiveness Project: http://afpfep.org/)

Second Half of The Equation – The Current Donor

Besides the value of a first-time donor giving a second gift, there is also a higher likelihood for current donors to give a second gift within the same fiscal year than any other kind of donor. Therefore, it takes less time and money to raise more from your current donors than to bring in new donors – according to studies, up to 12% less in time and money.

Likelihood of getting a gift:

  • New Donor = 2%
  • Lapsed Donor = 20-40%
  • Current/Active Donor = 60-70%

Where Does This Lead?

This data paints a clearer picture in terms of how attention should be paid.

  • Timely response to giving in as personal a manner as possible besides the acknowledgement letter. As many as you can work into your stewardship program.
  • Engaging the donor besides asking for a gift. This could be an invitation to a friend-raising event, something free, or a special opportunity to engage with the recipients of their giving. Invite them to a focus group to share feedback on a new program or initiative, or interview them regarding a new case for support.
  • Share the donor’s impact. This can be in the form of a special impact newsletter, customized reports for major gifts, or site visit to see the outcome of their giving.
  • If all of these steps are completed, a second ask can be made with a more successful outcome.

Your Second Ask

Some nonprofits play the “numbers game” and see revenue results from including a second ask in the acknowledgement letter. It may result in more revenue, but you can pay the price in relationship-building that might be leaving even more revenue on the table. Many donors are turned-off by appeal letters that are cloaked as acknowledgement letters and will walk away from a nonprofit that practices that strategy. They just want to be thanked. I am of the camp that prefers to keep the acknowledgement a sincere expression of gratitude.

That said, there are several ways to approach the ask for a second gift within the same fiscal year. First, things first – thank, engage, steward, then ask for a second gift for a special reason. There are three ways to go about this:

  • Face to face (This is always most effective)
  • Phone call (after acknowledgement is received)
  • Special campaign or holiday appeal – “Your support this fiscal year has been greatly appreciated. I am asking you to a second gift this year by making a ‘special gift’ to support this initiative.”

A few final tips: Matching gift opportunities perform 22% better in response-rate. Also, if your Board or grant dollars are willing to cover 100% of the over-head, let your donors know that the over-head is paid for and their gift is going to exactly what they want to support. Studies have shown a significant increase in response-rate as well as average gift when using this approach.

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