1. Building Donor Loyalty
Adrian Sargeant
Robert F. Hartsook Professor of Fundraising
Indiana University – Purdue University Indianapolis
22-Apr-19

2. Objectives To explain what lifetime value is
To explain what the concept has to offer
To identify what drives lifetime value in a charity context…..
To explain why donors terminate their support
To explore how to plan for retention
22-Apr-19

3. Is Retention An Issue?
Improving attrition rates by 10% can improve revenue generated by
50%
100% %
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4. Defection Curve
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5. What Is Lifetime Value?
“the total net contribution that a customer generates during his/her lifetime on a house list”
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6. Value Segments Value £1000 + £500 - £1000 £100 - £500 £20 - £100
£20 and under
£20 - £100
Value
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7. Perspectives on Value
Historic
Future
Segment
Individual
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8. LTV n LTV = åCi (1 + d) -i i=1 Where
c = net contribution from each year’s fundraising activity
d = discount rate
i = expected duration of each relationship in years
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9. Key Decisions Costs/revenues Duration of lifetime Discount Rates
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10. What can it do for you? Assigning Acquisition Allowances
Choosing media for initial donor acquisition
Setting criteria for donor marketing
Investing in the reactivation of donors
Assigning an asset value to the fundraising database.
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11. What Drives Donor Value….???
So……...
What Drives Donor Value….???
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12. Socio Economic Groups
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13. Why Do Customers Defect?
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14. 50 Ways To Lose Your Lover?
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15. 50 Way To Lose Your Lover Ignore Them Lie To Them
Fail To Return Calls or Answer Letters
Fail To Deliver On Promises
Be Uncivil
Increase Prices
Don’t Turn Up On Time
Etc.
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16. Customer Satisfaction
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17. Will Customers Buy From You Again
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18. Service Quality Perception Expectation Importance And Trends
Competition
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19. So what’s likely to drive donor loyalty?
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20. Only one nonprofit study
Identification negatively correlated with contact with other organizations…
And expectation confirmation
(Bhattarcharya et al 1995)
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21. Reasons For Quitting No longer able to afford support
No memory of ever supporting!!
Still supporting by other means
Feeling that other causes are more deserving
X no longer needs my support
Relocated
Not reminded to give again
X did not inform me how my monies were used
Xs communications were inappropriate
X asked for inappropriate sums
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22. Donor Satisfaction
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23. But what about commitment?
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24. Qualitative Phase
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25. 22-Apr-19

26. Quantitative Phase
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27. Structural Equation Model-
.27
Service
Quality
.27
.20
Passive
Commitment - -
Risk
.10 +
.22
.11
.58 +
.18
.14
Trust
Loyalty +
.21 + +
Shared
Beliefs
.41
.54
.37 +
Active
Commitment
.13
Personal
Link +
.11
Learning
.23 +
Multiple
Engagements

28. Fundraising Products and Audiences for Them
Adoption schemes (adopt a dog)
Low-value donors
Sponsorship schemes (sponsor a child)
Low- and high-value donors
Membership
Service users, low-value donors
Events
Service users, high- and low-value donors, volunteers, activists, lobbyists
Planned giving recognition
High-value donors
Legacy/bequest clubs
Friends schemes
Recognition societies
Monthly-giving clubs
Activist community
Research updates
Newsletters
Service-user group
Merchandise for sale
From Building Donor Loyalty: The Fundraiser’s Guide to Increasing Lifetime Value by Adrian Sargeant and Elaine Jay, 2004, Jossey-Bass.

29. So…….
22-Apr-19

30. Thank You