Maintaining a healthy donor retention rate is one of those really important things nonprofits just can't afford to ignore. Getting people to donate once is difficult, but keeping them engaged enough to donate again and again is where things seem to fall to the wayside for many nonprofits. But improving donor retention is your gateway to building a larger donor base and raising more money. Plus, by retaining more of your current donors, your nonprofit will be able to save money on acquisition costs for new donors.
Saving money while raising more money? Sounds like a winning recipe to us!
Unfortunately, the in 2019, the Fundraising Report Card reported that the average donor retention rate for nonprofits is 37%. To bring some clarity to that number, if you brought in 100 donors in 2018, only 37 of them will donate to your organization in 2019. If this were grade school, that would equal a big, fat "F" in nonprofit retention class. A fundraising optimist might try to twist this into an "F" for e(F)fort. Not on our watch.
Your nonprofit needs a plan if it's struggling with retaining donors year-over-year. We've got some strategies and tips to help you go from a grade "F" to at least a "B"!
Donor Retention Strategies
Calculate your donor retention rate
As with most things in fundraising, you need to know your baseline metric before anything else. That means you need to calculate your donor retention rate before you can embark on your donor-retention journey.
To calculate this number, you’re going to need to pull two numbers from your fundraising CRM. First, pull the total number of donors who gave in 2019. Next, pull the number of donors who gave in 2019 and gave again in 2020. Or 2020 and 2021. Or, basically, your last full fiscal year and the year before it. (Wave if you're reading this in 2175!)
To calculate your donor retention rate, divide the number of donors from the most recent year by the number of donors in the previous year and multiply by 100. Voila! That’s your donor retention rate. Here it is for all y'all that need to see it in numbers: (2021/2020) x 100. (...Think we wrote that right? We're writers, not math-ers.)
Clean up and dig into your data
Now that you’ve got your retention rate in hand, you can dig into your data. If you're going to make your donor data work for you, you've got to make sure that it's squeaky clean. Imagine getting an email saying, "Joan, with your help, we can save the rainforest!", when your name is Danny. That can turn off a donor for good and it could have been prevented with the right processes in place. (Don't get us started on Mr./Mrs./Ms./Dr. personalization.)
Once the data’s squeaky clean, start looking through those records. Look through some of the records of donors who gave in 2020, but didn't give again in 2021. If they primarily received communication by email, are they still subscribed to your email list? Has their email address bounced? If you communicated with some of those donors by snail mail, do you have the correct address for them? These are practical considerations that can impact your donor retention rate.
Schedule a regular database audit. We suggest taking a quarterly or annual dive into your data to ensure all information is up-to-date and that it follows the most recent rules and regulations. We know it's tedious work, but it's work that will pay dividends if it's done consistently (and if, like us, your busy brain is soothed by doing data maintenance once in a while, it'll be an infrequent treat.)
There's tremendous value in showing up when you say will, time and time again. In fact, consistency is considered one of the most powerful tools of persuasion. That's why staying in front of your donors regularly is one of the best donor retention tactics.
What does consistency look like when it's aligned with the goal of retaining donors? It looks like weekly, monthly, or quarterly newsletters. It looks like annual thank-you events. It looks like scheduled direct mail appeals. It looks like keeping a repository of success stories and outcomes that you share with donors and supporters on a monthly or quarterly basis. Whatever method of engagement you choose, do it consistently so your donors know what to expect.
Bonus stats! According to the 2019 Global NGO Technology Report, even though the average American/Canadian NGO has over 21,000 email subscribers, 18% of US and Canadian NGOs don't send out email newsletters and 34% don't email donors about their fundraising appeals. But with American adults spending up to 5 hours per day in their inboxes and 76% of NGOs touting the effectiveness of email communication, your nonprofit needs to integrate email into your marketing plan.
Get with your marketing department (or have a nice coffee date with yourself if you are the marketing department). Whip out your annual calendar and identify how many times throughout the year you're sending appeals to your supporters and donors. Then, fill in the gaps throughout the year with marketing activities (newsletters, success stories, organizational updates). This will ensure you're maintaining a consistent touchpoint with your donors and they're never surprised when they receive an appeal.
The effectiveness of your consistent efforts goes out the window if you're not providing information that's relevant to your donor base. When communicating with donors and supporters throughout the year, give them the stuff that you know will delight them. Specifically, be sure to provide positive reinforcement by celebrating past gifts and updating donors on their continued impact.
The best way to know what engages your donors the most is by looking at your data. If your donor CRM is connected to your email marketing platform, use the data to determine which of your past marketing and fundraising campaigns were the most effective. If you're reviewing your email marketing campaigns, look at things like click rate to determine what the most captivating communications were. If you're looking at your fundraising campaigns, see how much money was raised with each campaign. Identify your most successful campaigns and find a way to replicate them. If your donors were receptive once, they're likely to be engaged again.
Make giving easy
If donors have to jump through hoops just to give you money, that experience may prevent them from donating again in the future. You've got to make donating to your nonprofit as easy as possible, like with simple and intuitive donation forms. If you're already using a dynamic donation form, make sure it has a recurring giving option on it. This is one of the best ways to retain donors—automate their giving so they never have to think about it again. Research confirms that retaining existing donors costs an organization significantly less than acquiring new donors. And contrary to popular belief, establishing a recurring giving program takes less effort than you think. It's time to get on board and start getting guaranteed revenue for your nonprofit.
Start promoting recurring giving in your marketing and fundraising communications. Some donors will be relieved at the idea of giving regularly to an organization they care about. If you're not comfortable making a hard ask to join your recurring giving program, add a line to your email signature, or put a subtle banner at the end of every newsletter. The smallest act can have a huge impact on your donor retention rates.
If you want more valuable insights on recurring giving, check out Funraise's convo with charity: water about their wildly successful program.
Test, test, and test again
We’ve alluded to testing strategies for winning back lapsed donors already. It’s also important to test strategies and tactics for keeping donors in the first place. Here are some examples of retention strategies you can test.
- Thank you phone calls to donors. You can test whether or not a phone call impacts giving.
- Impact updates and stories. You can test whether or not sending an update impacts giving, as well as the frequency of sending updates.
- Personalized stewardship touch points. You can test different types of stewardship touch points, including things like mission-driven gifts or even an out-of-the-blue thank you.
- Giving circles or giving clubs. You can test whether offering this kind of “status” impacts donor retention.
Keeping your donors in the loop about the inner workings of your nonprofit can be a great donor retention tactic. It builds trust with your donors and creates a culture of transparency. Also, people love getting the inside scoop—especially when they've invested in something. Maintaining transparency can include publishing an annual report or having a page on your website about recent happenings and news. It can also include reaching out to donors to let them know about the outcomes that have come from their donation, or even better, lining up some success stories that show the impact of their donation.
Host a quarterly Twitter or Facebook chat to engage supporters and donors. You can draft a list of questions to ask your followers to get insight on what they want from your nonprofit, as well as encourage your supporters to ask you questions. If you're a nonprofit that deals with controversial issues, consider having your PR or communications person on hand in case any challenging questions arise.
Bonus action! Use the new wave of social fundraising to your benefit as you target transparency: stream your quarterly chat live and ask for donations while you livestream. If you've integrated your social platform with Funraise, you can follow up on donations right from your Funraise account.
“Gratitude is the sign of noble souls," according to the ancient Greek storyteller, Aesop. While nonprofits are familiar with the fine art of thanking their donors once they've donated, it's important to continue that attitude of gratitude throughout the entire year. Invite donors to a thank-you cocktail hour at your office. Or plan a social media thank-a-thon and shout out all your donors who've helped move you closer to your mission. Whatever you do, make it memorable, and make it more than a form letter that's automatically sent out with each donation.
You know that marketing and fundraising calendar exercise we suggested earlier? Add some thank-you events to the calendar. They don't have to be in-person events, but make it a point to delightfully thank donors throughout the year to show that you care (because you do!).
You can also go through your follow-up process for online and offline donors to document the kind of touchpoints they receive from your organization. If certain donor segments receive some touchpoints but other segments do not, are you seeing any differences in retention and giving behavior between the segments? Asking this question can lead you down the path of what’s working in your stewardship and acknowledgement process.
We understand that retaining donors is a lot easier said than done, but these tried-and-true pillars of donor retention will help you get closer to closing the gap. You got this, fundraiser. And as always, we're here to help!
How to Increase Donations From Your Current Donors
Once you’ve followed our top tips for donor retention, you can set your sights a little higher and move on to increasing donations from your current donors.
Think about it this way: Your current donors have already proven they want to support your organization and that they care about the work you do. You’ve just identified your nonprofit’s biggest fans and found the perfect place to start maximizing donations. Here’s how you can earn more per donor right away.
Find patterns within your donor data
Take a look at your donor analytics, with info like where they live or the timing of their donations, and start looking for patterns. Your goal is to find similarities within your known donors so you can make groupings. Put all the donors who supported a certain project on their own list. The donors who gave on Giving Tuesday can go on another list. It’s ok if donors are grouped into more than one list (just don't send all the emails to anyone on multiple lists)!
Now that you’ve created groupings of similar donors, message each list with a personalized follow-up.
Here’s an example: You have a project coming up that’s similar to a program you ran in the past. Email the group of donors who gave during that past program and say something like, "If 50 of our supporters contributed $10 each, we could accomplish our goal!"
Bonus: By grouping your donors, you also avoid committing the sin of sending out generic marketing emails. Uncovering patterns beyond just the Amount Given is a great way to recognize your donors and make sure they feel seen.
Maximize your wealth screenings
Analyzing the background data you have on your current donors will only get you so far. If you really want to customize your donation ask, wealth screenings are the way to go. Once you know the true worth of your donors, you can figure out a reasonable amount to ask from them.
It’s true, they gave a low amount last year, say $5, but you know they have a higher-than-median salary. Asking for $10 this year—or even $50—won’t sound outrageous to them. If a donor has a lower or mid-range net worth, ask for something small, like a $1 increase, or suggest they cover transaction fees (see below) to maximize their contribution.
Let's say you find a real shocker: a donor with a crazy high net-worth. Don't be afraid to give them a call. Ask them what they think of your programs. Get their feedback. Then tell them about the great new project you're starting. Even better? Take them out to coffee if you can. It's an industry secret that donors will give 10 times more after a hyper-personalized ask than a generic one.
Give them the option to cover transaction fees
Payment processing fees—can’t get around ‘em, amirite? Especially when it comes to online giving. Fees vary but usually range between 2% and 3%, which means a gift of $5 is really a gift of $4.85. Multiply that by a jillion, and that’s a lot of lost donation money.
An easy way to recoup payment processing costs is to ask donors if they’d cover the transaction fee. Funraise offers a unique Donors Cover Fees model that means we take on the risk of transaction costs, not you.
To go one step further, think about adding platform-hosting costs to the percentage. Explain to donors that by donating 5% more—$.25 cents on top of that $5— they’ll help cover technology expenses. Remind donors of the importance to your org to provide easy online giving options; wouldn’t they prefer to see 100% of their base donation go toward your cause?
Lots of donors will accept the cost since it’s so nominal. Plus, anytime you make it easy for your donor to say ‘yes,’ you increase their feelings of generosity (and your donations)!
Increase your ask before their credit card expires
Credit card expirations are such a nuisance! If a donor doesn’t take the time to update their payment information, the result to your organization is lost dollars. Set up a reminder message to go out before their card expires and simultaneously use it as an opportunity to challenge them to give more.
Thank them for their previous gifts, describe the good that’s already come as a result of their generosity, and inform them of what a slight increase in their gift would help accomplish. If you can, add a link or button asking them to “Increase your donation by $x.” One thing will lead to another… and bam! More donation dollars.
Encourage donors to look into employer donation matching
Who remembers everything HR tells you when you’re onboarding at a new job? Hidden in those insurance documents and benefits opt-ins is one of your best secrets to increased donations: employer donation matching! Your donors may be eligible to have their donation dollars matched by their employer, so make sure they check. This is free money for you and them, and an easy way to increase your donors' contribution and their pride.
Humblebrag: Funraise makes it easy to find donation matching information through our matching gift integration with Double the Donation. Donors can look up their employer right in the donation form. It's a simple way to increase donations right away.
Challenge your donors to increase their giving amount
It seems obvious; you won’t get more unless you ask. But, once again, it’s all about using your donor data. Here’s when you group donors by the amount they usually give. Focus on smaller donations and challenge these donors to increase their gift by a relatively small amount.
If they gave $5 last year, how about $6 this year? Or maybe $10?
Don’t focus on how little this will affect their financial lives with a comment like, “for the cost of a few Starbucks frappuccinos you can up your contribution.” Instead, describe how an insignificant amount of money equals a significant step in your overall mission.
Don’t be afraid to spell it out for them: Five dollars more is one meal sent to a hungry person or an hour of education spent helping a child read. Keep the numbers relatable and the goals attainable, and you’ll find donors will see how the simple act of a tiny increase can have a real impact.
Hopefully, you acquire a zillion new donors this year, but in the meantime, make sure you’re giving your fanbase donors love and encouragement so they stay passionate about your organization’s mission. With a little strategy and some great communication, you may find your donors are excited to give you more.
The Importance of Transparency in Donor Relationships
We’ve certainly talked the talk about how to build and maintain strong donor relationships. Now, let’s check out an example of a nonprofit that walked the walk. When Drew Friedrich connected with Funraise, COVID-19 was a tiny speck on the horizon and the fundraising landscape was vastly different from what we've come to understand is our new normal.
Drew, Director of Marketing for Orphan's Promise, took some time out of his schedule to join Justin Wheeler, CEO and Co-founder of Funraise, for a lively, Funpraise-filled, account of fundraising and donor relations during those first chaotic COVID days.
One of the overarching themes that Drew returned to over and over was the need for transparency in building donor confidence, and its importance as we lean on one another for support. Below, we've gathered a few of the key points that Drew brought to the table in his expansive conversation with Justin.
Moving away from reliance on face-to-face donor relations
Orphan's Promise, a global nonprofit focused on uplifting the potential of orphaned and at-risk children, builds donor relationships through one-on-one conversations, in-person galas, and global trips to experience their fieldwork firsthand. COVID-19 has stripped all of those opportunities, but the team responded by opening up their communications, giving donors a view inside the organization unlike anything they've seen before.
Contrary to what Orphan's Promise initially expected, this ability to share vulnerability encouraged their core donor base to double down on their commitment to the nonprofit's mission and resulted in needs being not only fulfilled, but exceeded.
Opening new lines of donor communication
Without the usual ways to express their nonprofit love languages to their dedicated donor base, Orphan's Promise found themselves jumping on the Zoom bandwagon. And, again, contrary to their expectations, the Orphan's Promise leadership team made lemonade out of lemons, providing a place for their donors to connect on an emotional level with others dealing with the same stresses and worries. Drew described their first call for us...
"Nobody hung up for like seven minutes. They all were there kind of talking to each other. ...it was kind of one of those like high school relationships, like, I love you more. No, I love you more. You hang up first."
The Windex Effect
We're calling this The Windex Effect because it's the most inspiring transparency cause-effect factor that Drew shared with us. (Also, it sounds cool.)
Orphan's Promise had the happy result of deeper donor relationships and increased dedication to their organization and cause once they opened up. But instead of taking a beat and unshouldering the burden, their donors' support motivated Orphans Promise to double down and commit to working even harder, closing that transparency loop and affecting impact in a truly mighty way.
By letting the light shine through, even on the darkest days, you offer your donors something to invest their hearts in, not just their dollars.
Fundraising friend, we know donor retention can be one of the toughest fundraising nuts to crack. By following the suggestions in this donor retention guide, you can get your nonprofit on the path to figuring it out. Remember: persistence, consistency, and authenticity are your friends when it comes to keeping your donors!
Donor Retention FAQs
What is donor retention?
Donor retention is keeping the same donors year after year. Donor acquisition, on the other hand, is getting new donors.
Why is donor retention so important?
Let us count the ways! Retaining donors is cheaper than attracting new donors or reengaging lapsed ones. As a result, it’s better for budgeting, resource allocation, and overall engagement. In addition, long-term donors tend to recruit other supporters to your organization.
Why do donors stop donating?
Plenty of reasons—some within your control and some not. Donors often stop giving because they don’t hear back after a gift, don’t know how their gift was used, or don’t feel appreciated. Other culprits are too many asks or too many mailings. They might also stop giving due to changes to their financial situation or finding other causes that resonate more.
What’s considered a good donor retention rate?
With an average donor retention rate of less than 40%, anything higher is good!