A Look at Donor Retention

A recent report* suggests that retaining donors remains challenging for many organizations. The report examines the 2013 – 2014 fundraising results of 8,025 U.S. nonprofit organizations — most of them small to midsize organizations — averaging $833,475 in annual giving. Among the findings:

  • The median donor retention rate in 2014 was 43% (meaning only 43% of 2013 donors made repeat gifts to participating nonprofits in 2014)
  • Year over year, there was a 3% net loss in donors (3.615 million new and previously lapsed donors compared to 3.713 million lapsed donors)

Overall, gift dollars grew by $173 million. However, for every $100 gained in 2014, $95 was lost through attrition (i.e., reduced gifts and lapsed donors). For purposes of the analysis, funds raised include cash gifts, pledge payments, recurring gift payments, gifts of marketable securities, and the gift portion of special event income.

* 2015 Fundraising Effectiveness Project Survey Report, Association of Fundraising Professionals, 2015

Keep Them Giving

Raising money from new donors is important. But turning those donors into repeat donors is also critical to the long-term success of an organization’s fundraising efforts.

Typically, an organization spends more money to attract a new donor than to encourage an existing donor to give again. As a result, the positive financial impact of improving donor retention rates can be significant over time.

Strategies To Consider

Organizations that strive to build ongoing relationships with their donors are more likely to be rewarded with continued support. The suggestions that follow may prove helpful.

Say thank you. Acknowledging each gift the organization receives with a personalized communication — and doing so promptly — gets the donor relationship off to a good start. In addition to sending written acknowledgments, organizations might consider phoning at least some of their donors to thank them for their contributions.

Engage and inform. Opportunities to interact with donors and let them know about the organization’s work and upcoming events have proliferated. Whether it’s through social media, e-mail, traditional mailings, or a combination, organizations should have a plan to keep their name in front of donors and enhance engagement — without being viewed as intrusive.

Watch timing. Along the same line, organizations should be cautious not to solicit contributions from past donors too often. Instead of motivating donors to give more, asking for money too frequently could have the opposite effect and only serve to alienate them.

Encourage regular giving. Having a monthly giving program in place that interested donors can sign up for voluntarily helps avoid this problem. To help get the word out, an organization should highlight its giving program at every opportunity.

Connect with younger adults. They may not be able to make big cash contributions now, but the Millennials are a large generation with significant potential as a future funding source. Establishing a connection with them now can be a smart long-term strategy.

Organizations that view fundraising in a positive light — as an opportunity to promote and support their mission — are likely to have more success than those that see fundraising as a drain on their time and resources. When mission and values come first, donor relationship building becomes a shared responsibility, involving everyone from executives and board members to staff and volunteers.

Organizations should identify a clear message they want to convey to donors about their mission and values. Taking steps to ensure that everyone involved in donor communications understands and is on board with that message can avoid any confusion in the minds of donors that might make them hesitant to commit more money to the organization.

 

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