# Phil psych meets donor loyalty

- Link: https://fundraising.co.uk/sponsored_posts/phil-psych-meets-donor-loyalty/
- Published: 2022-07-11T17:19:53+01:00
- Author: Howard Lake

**For almost thirty years I’ve been championing the importing from the commercial
world of satisfaction, commitment, and trust as relationship measures that can help
nonprofits manage loyalty. But it’s long past time to stop our reliance on our for-
profit colleagues and begin to create new models and perspectives for ourselves.**

For sure satisfaction, commitment, and trust have a good pedigree. Donors who are
very satisfied with the quality of service they receive from the fundraising team,
for example, are considerably more likely to renew than those that are merely satisfied.
When I last looked at the numbers in 2010, “very satisfied” people were twice as
likely to be giving next year than those merely “satisfied.”
 In almost every study
I have ever conducted on loyalty, donor satisfaction has been a significant factor.
So too, the notion of commitment. And in our sector, that’s commitment to the mission
or passion for the work of the organisation. Usually, commitment correlates very
strongly with intentions to increase or continue giving but, of course, whether 
it is a predictor of actual future behaviour or value is more open to doubt.

## Trust connects donors with their impact

Finally, trust has been important because for most donors it connects them with 
their impact. If I give you a donation of £100 today and you tell me you will use
it to vaccinate ten children, I really have no idea whether you took my money and
did that or not. But if I have a higher level of trust that you did what you said
you would do, I will be significantly more loyal. Interesting though, that trust
is usually the weakest of the three factors.
 However, all these measures come from
work conducted in the for-profit space and from the domain of relationship marketing.
Marketers now understand that relationships are experienced through these three 
variables and so it makes sense to track them and reward marketing managers for 
what they are then able to deliver. In our sector, there is now increasing awareness
of these factors, but very few fundraisers are routinely rewarded for performance
against these metrics.

## Which factors drive actual future behaviour?

But before we get too enamoured with a game of catch-up to our commercial colleagues,
are these truly the right metrics? Should we just be transplanting ideas in this
way? At IFSP we would now argue not. We are just beginning to see the results from
our new two-year study of donor loyalty and retention focused on the factors that
drive actual future behaviour. Essentially, we matched responses from an initial
survey with actual future behaviour and tracked it over time; a methodology that
allows us to see exactly what was indicative of future giving.
 It’s important to
understand that most work on retention and loyalty has attempted to predict **giving
intentions** (i.e., I intend to continue giving or upgrade). We were able to find
few studies that attempted to predict **actual future behaviours**. And, of course,
it turns out that what predicts giving intentions is broadly **NOT** what predicts
actual behaviour. What might be? Rather than start with commercial drivers of loyalty,
perhaps we might build our own set of indicators that are unique to our sector, 
unique to the nature of supporter relationships, and possibly even unique to our
own organisations.

## What have we learned from our new study so far? 

So far, the factors that predict whether an individual will still be giving next
year are satisfaction (which we would expect from my previous work), but also supporter
wellbeing and identity – ideas all drawn from the emerging science of Philanthropic
Psychology or PhilPsych. What is great about this early set of results is that these
are also factors that we have shown to be powerful in the here and now. So, we can
manage for loyalty in a similar manner to how we can manage for **substantive growth**
in annual giving.
 One of the issues with satisfaction, commitment, and trust and
other measures such as net promoter scores, is that they are often not diagnostic.
They might tell you your score is (say) 5.1, but they deliver little sense of what
one might do with that information. The great thing about these new metrics is that
they are, at their core, diagnostic. One can understand immediately from a supporter
survey what factors need to be addressed and how. We also learned that benchmarking
in this space may offer limited utility. Yes, we may understand that aspects of 
wellbeing and identity drive loyalty, but the contribution that different charities
might make to supporter wellbeing will also be different. So, in using PhilPsych
metrics to predict and measure loyalty, they have to be tailored to the particular
circumstances of the organisation. We believe that benchmarking will continue to
offer utility but would now focus this internally, by tracking trends and rewarding
staff for significant changes they are able to deliver to performance.  **Our new
science of loyalty report will be released in September 2022. **

[Please sign up to receive a personal copy](https://bit.ly/science-loyalty)

_**Professor Adrian Sargeant**_