Marc Chardon knows that when he talks about the “flight to quality,” he has to explain himself. “When I say ‘flight to quality,’” he says, “I’m talking about the observable trend of donors deciding to support fewer organizations, consolidating their giving with those that mean the most to them and treat them well. . . . I see it happening everywhere,” reports Chardon, who was head of Blackbaud, the leading global provider of software and services for nonprofit organizations, until he stepped down in 2013. He adds that when it comes to cultivating and keeping donors, nonprofits need to realize that “surface relationships just don’t cut it.” 

Professional fundraiser Claire Axelrad agrees: “Don’t treat your donors like gumballs,” she advises nonprofit managers. “Don’t stick ‘em in your database to save for later.” In the current environment, she warns, in which the competition for every charitable dollar is becoming increasingly fierce, they probably won’t be there later. Frank Barry, Chardon’s one-time colleague at Blackbaud, argues that nonprofits need to devote at least as much energy to retaining the donors they have as they do to prospecting for new donors. “Nearly three out of four new donors,” he points out, “leave and never come back.” Where do they go? “They flee to quality,” says Chardon, “to the places where they feel the most connected and the most valued.”

From a financial standpoint, the imperative to hold onto donors is particularly pressing. According to Adrian Sargeant, director of the Centre for Sustainable Philanthropy at England’s University of Plymouth, it costs a fundraising organization five times as much to attract a new donor as it does to maintain a relationship with an existing donor. The cost of recruiting the new donor will also amount to two or three times more than the value of the donor’s first donation. Sargeant’s research also indicates that the typical nonprofit will lose 10–20 percent of all donors annually, but he hastens to add that “even small improvements in the level of attrition can generate significantly larger improvements in the lifetime value of the fundraising database,” with a mere 10 percent improvement in attrition yielding up to a 200 percent increase in database value 

Chardon believes that “donors are just like Amazon customers, expecting service and recognition that nonprofits know who they are and how they are unique.” Likewise, Sargeant is convinced that at least “some donors will consciously evaluate the service provided by a nonprofit and compare it to what could be achieved ‘in return’ for their donations elsewhere.” Both argue that donors value certain types of relationships with the nonprofits that they patronize, and Sargeant contends that “donor satisfaction” is “the single greatest driver of loyalty.” In turn, he says, donor satisfaction depends in large measure on “delivered service quality.” 

So what—in a practical sense—constitutes “service quality” in the mind of a donor? Not surprisingly, it all comes down to “touches”—the contacts that the nonprofit makes with the donor. And according to a 2018 survey by Abila, a provider of software and services to nonprofits, the quality of touches is more important than their quantity (i.e., frequency). Donor communications specialist Lisa Sargent confirms the argument for “rich content” in contacts in her account of the efforts mounted by an unnamed client:

They created a terrific donor welcome pack and special new donor thank-you; send hand-signed thank-yous promptly and make them as personal as possible; publish a donor-driven, story-focused newsletter four times yearly; invite donors to engage with their organization in ways that don’t always include a monetary gift; and continue to invest in a quality donor communications program [that includes] a longer newsletter [about] legacy programs, monthly giving, and major donors 

The organization’s donor file, she reports, quintupled between 2008 and 2018, when it broke the 70 percent “retention barrier.” 

Case Questions 

1. Compare and contrast the roles of operations management, quality, and productivity between for-profit and not-for-profit organizations. 

2. Are manufacturing and production or service operations techniques more relevant for fund-raising organizations? 

3. In what ways do fund-raising organizations address product–service mix and capacity questions? 

4. Have you ever been solicited to donate money? How would you assess the nature of the request from a quality perspective?