Can your non-profit organization quantify your social impact compared to the universe of charitable options?
Whether you are an executive director, board member, employee or volunteer, you have a direct responsibility to both the mission impact and financial viability of your organization. And it’s not just about programs and fundraising, it is about Donor Loyalty.
Are you the Best Available Charitable Option (BACO) for your funding sources? How do you know? What would your donors say? How do you demonstrate, measure and communicate this value? How accessible is the “story” of your positive impact, including meaningful data? This may be the most critical factor to your financial viability, your mission impact and, therefore, your organization’s sustainability.
Knowing how you measure up as a Best Available Option is a critical indicator of Donor Loyalty, a primary metric overlooked by the majority of organizations – and most likely a critical strategy being overlooked by your organization.
Do you have a Donor Loyalty Strategy? If your answer is, “I think so,” well, you probably don’t.
Non-profits are typically caught up in assessing “donor satisfaction” to one degree or another. But there is a difference – a BIG difference – between donor satisfaction and donor loyalty. Donor loyalty proves to be a far better predictor of future behavior than donor satisfaction. Donors are loyal because they are emotionally attached to their current charitable alternative.
Non-profit leaders typically assume that high levels of satisfaction translate into donor loyalty when, in fact, donor satisfaction ratings are more closely linked to your donors’ perceptions of your service attributes rather than to the value gained by those services. Focusing on and measuring satisfaction, while it cannot be forgotten, rarely translates into improved financial viability.
Satisfaction is a measurement of, “I expected it and I got it; therefore, I’m satisfied.” If this were translated into a grading system, satisfaction could easily translate into a grade of “C” on any report card. The desired score is obviously an “A” and “A’s” always equate to loyal donors. “A’s” imply that donors got more than they expected and their expectations were exceeded in some way. Based on what is truly important to donors, they received more value from you than from your competitors. A loyal donor will come back to you much more readily than a satisfied one.
To create and sustain loyal donors, it is necessary to consider every contact with each donor as an opportunity for you to provide value – every time! Every service point is critical, and every service point has a level of expectation from the donor that must be understood and managed. We call these contact points, “Points of Connection.”
Research by such reputable sources as the Gallup organization, Accenture and many others demonstrate that no satisfaction measure, regardless of the number of points in the rating scale, can adequately indicate the true health of a donor relationship. Further, employee loyalty is a key factor of customer loyalty, since employees are directly or indirectly responsible for every point of contact with donors. If you have no Donor Loyalty Strategy, including a plan to improve employee (board, volunteer…) engagement and a process to continually improve points of contact with donors, then the likelihood of becoming or remaining the Best Available Charitable Option with your funding sources is tenuous at best.
The function of a non-profit organization is to best serve their community. To effectively serve their community, non-profits must be financially viable. Most non-profits today rely on donors as a significant part of both their funding and their workforce (volunteers). Therefore, if the reason for non-profit organizations to be in business centers on the community they serve, as your organization’s leadership team, managing and measuring your donor interface becomes one of your most important functions. Making certain that your donors get what they want is of critical importance to the long-term success of any organization. All factors that impact negatively on the donor, must be identified and corrected if you wish to compete effectively now and in the future.
When you understand the alternatives to the work you are doing, it becomes far easier to measure your work, and to value it.