2018-05-07 10:04:21 Nonprofit Funding English Win back your lapsed donors and learn methods to keep them from lapsing in the first place. It's all about building relationships with your... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/04/Woman-Calling-Lapsed-Donor-Funding.jpg https://quickbooks.intuit.com/ca/resources/nonprofit-funding/prevent-lapsed-donors/ What Causes Lapsed Donors and What Can You Do to Prevent It?

What Causes Lapsed Donors and What Can You Do to Prevent It?

4 min read

To carry out its mission, your nonprofit needs members who faithfully pay dues and make donations. You probably have a marketing plan to attract new donors and new members. But what about lapsed donors — those who used to give, but no longer do? Here’s what you should know about lapsed donors and how to bring them back on board.

What Is a Lapsed Donor?

A lapsed donor is someone who once gave to your organization but hasn’t done so recently. How long must pass for a lapse to occur? That depends on your membership structure. Say your members renew yearly. Then a person who doesn’t renew or give for one year becomes lapsed. After three years, many nonprofits reclassify lapsed donors as former donors.

Lapsed donors are important to your marketing outreach. You know they believe in your mission, or at least they once did. Otherwise, they wouldn’t have donated in the past. You also know they gave relatively recently — within the last year, two years, or three years. That makes them easier to win over, at least compared to a new donor or someone who hasn’t given in years.

You can usually find out why a donor stopped giving. Maybe life got crazy and it simply slipped their mind to renew. Once you know what happened, you can set about winning them back.

Why Do Donors Lapse?

Why do donors stop giving to causes they once supported? In 2017, a software company called Community Brands set out to answer that question. It conducted a survey called the Member Loyalty Study, reaching out to lapsed nonprofit donors and asking what happened.

The study identified six main reasons why nonprofit donors stopped giving

  • It was too costly.

Of the respondents, 34% of respondents listed money as their top reason. They stopped giving because they were concerned about the cost.

  • The value was too low.

About 26% claimed they no longer saw the value in donating or being a member.

  • They changed industries or employment.

Many donors support causes related to their industry or employment. Teachers, for instance, often give to educational causes. When people change industries, they sometimes shift their charitable giving, and 19% listed this as their main reason.

  • They forgot to renew.

According to Community Brands, 13% said renewing simply slipped their mind. What does this mean? It means your nonprofit should be communicating with donors, trying to remain fresh in their minds.

  • Their employer stopped donating for them.

Some employers donate to causes on their employees’ behalf. 9% of respondents said they stopped giving because their employers quit paying.

  • The quality of benefits declined.

Another 9% felt they weren’t getting what they once did for the money.

Note something interesting from the stats above. The top two reasons, plus the bottom reason, are all about value. More than two-thirds of lapsed donors stopped giving because they didn’t think the value for the money was enough.

Preventing Donors From Lapsing

What’s even better than winning back lapsed donors? Keeping them from lapsing to begin with. Here’s how successful nonprofits keep members current and active.

  • They stress value.

Successful nonprofits make sure donors know what they’re getting for their money. A childhood literacy nonprofit, for instance, might show its donors how much reading test scores have improved thanks to their help.

  • They communicate with members.

Remember the Community Brands survey? Nearly one in seven respondents stopped giving just because they forgot. That signals a lack of communication by the organization. People usually don’t forget about those they’re in close contact with. Top nonprofits keep the lines of communication active with emails, letters, postcards, and the occasional phone call.

  • They build relationships with employers.

You already know some employers donate on behalf of employees. Smart nonprofits foster relationships with these companies. They team up for public events that are a win-win. The company gets exposure, and the nonprofit gets a loyal donor and partner.

  • They thank their donors — often.

This is Occam’s razor at work — the simplest solution being the best one. Successful nonprofits know sometimes all it takes to keep a donor on board is thanking them for their help.

Winning Back Lapsed Donors

Despite your best efforts, donors lapse from time to time. But that doesn’t have to mean losing them for good. Here’s how successful membership organizations win back lapsed donors:

  • They personalize their outreach.

Smart nonprofit owners don’t send generic form letters. Those find their way quickly to the circular file. Instead, they write a personalized letter or email or reach out to a lapsed donor with a phone call.

  • They don’t solicit money right away.

Instead, they ask how the person is doing and if they have any concerns or issues that made them stop giving. They realize that maybe the donor is suffering financial woes. Maybe there’s another extenuating circumstance. A savvy nonprofit owner knows that donors appreciate someone who cares about them and not just their money.

  • They remind them of the difference they’ve made.

People like being made to feel valuable. Successful membership organizations know this and take advantage of it. If a donor has lapsed, they make sure the person knows how much their past contributions helped.

  • They ask for their support again.

Ultimately, getting a donor on board, whether a new or lapsed one, is a sale. The best salespeople aren’t afraid to ask for the business.

With a little legwork, you can make lapsed donors current donors again. The key is to provide value and let them know the value they’re providing you.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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