12 Effective Strategies to Boost Your Donor Retention Rate
Why is Donor Retention so Important?
We get it. Fundraising is hard. In order to survive, your nonprofit needs fresh, consistent donors. There’s no better place to find these donors than in those people you already have under your wing. You have spent time building a relationship with them, and in turn, they have invested in your projects.
Just like a new customer, winning a new donor costs you time and money. A one-time donor may actually mean a loss of investment. Donor retention, just like repeat customers, are the key to the success of your nonprofit.
Donor retention is hard too, and COVID made it harder. In 2020, donor retention was about 43% -- a 4% drop over 2019 (AFP Global). That means if someone donated to your organization in 2019, there was a 57% chance they didn’t donate again in 2020.
In 2021, some sectors saw donations drop due to COVID. However, according to a report by the Fundraising Effectiveness Project’s (FEP), 2021 donor retention did quite well. 2022 numbers could also be better than expected.
Although the number of donors is down, donor retention among new donors (those who gave to an organization for the first time in 2020) is very strong, up 26%. This is in contrast to the overall number of donors, which could not keep pace with 2020, and is down 5.7%. (GivingTuesday)
How to Develop Permanent Donors
A large base of loyal donors is the goal of every nonprofit organization. Why? Donors are committed -- just like shareholders are to a business. Advertising costs per donation are particularly low among loyal donors, too.
So how can one-time donors be developed into permanent donors?
Retain Donors by Understanding That Your Nonprofit is a Business
Donor Retention Tip 1: Gain and Retain Trust
People who trust you are more generous and more forgiving of any minor hiccups that may occur. So make an effort to gain the trust of your donors. And do it again and again. For example, by publishing success stories, disclosing your figures, or having local celebrities stand up for you.
Donor Retention Tip 2: Be a Strong Part of Your Local Community
We often forget what is all around us. Local support and donors are just as important as those out of state. Local activities and donors show trustworthiness, transparency, and accessibility.
Donor Retention Tip 3: Incorporate Donation Motives
People who are sympathetic to your organization may not want to rethink which projects to support each time. Offer them longer-term commitments, e.g., through sponsorships, memberships, or volunteer work. It’s best to find out the needs of your donors in a personal conversation, too.
In order to achieve the greatest impact, nonprofits must invest in their companies – just like a business would. (Flipcause.com)
Retain Donors by Understanding that Donors are Customers
Donor Retention Tip 4: Understand Your Donors
Understanding your donors enables you to better care for them. Why are people donating? What is their goal? Are they private or corporate donors? People’s interest or willingness to donate may be reflected in the fact that they have experienced a difficult life situation themselves.
The amount and type of donations is a critical classification criterion and audience persona:
Prospective donors
First-time or one-time donors
Multiple donors
Permanent donors
Major donors
Of course, the long-term goal of all activities is to move each person from one level to the next.
Tip: The personal care of potential testators requires a great deal of time and care. Dedicated, older volunteers are best suited for this task. In communications, continually call attention to the possibility of a bequest to your organization.
Donor Retention Tip 5: Tell Stories
People see tragedy in the suffering of a single person or family, while they are much less affected by the suffering of thousands further away. Tell stories of those in need and show how your organization has made a difference in their lives, and in the lives of your donors.
Stories bring facts to life, and everyone has a story. From new homeowners and brides-to-be to donors: The stories behind Donors may involve different characters but the moral of the story is no different from attracting donors to getting Baby Boomers into their retirement condo. (Andrews Wharton)
Donor Retention Tip 6: Recognize Your Donors and Express Gratitude
Donors voluntarily give away time, possessions, or a part of their financial assets. They do not expect anything in return. Nevertheless, show your donors how much you appreciate their contributions with special gestures. For example, by listing them on donation boards, inviting them to events, or featuring them in your publications.
By donating, donors are showing you their trust. If they don't hear anything afterward, they will probably wonder whether the donation actually achieved its goal. Therefore, thank them for every donation - via letter, e-mail or telephone. And do so before you send out the next donation request.
Perhaps prominent supporters of the organization could also co-sign the thank-you letter to emphasize the importance of the donation.
Donor Retention Tip 7: Enclose Small Gifts
Mailing inserts work and are appreciated on several levels:
They arouse curiosity through haptics and thus increase the opening rate.
They attract attention when opened.
They keep your organization present for a long time.
People feel obliged to respond.
Actively address possible donation motives in your fundraising campaigns, for example, through real statements from a donor.
Donors are also consumers. When people give, they aren’t purchasing a physical item or even a service—but they are making a hopeful investment. And just as a consumer reflects on a purchase, a donor will often deliberate over a gift. (Benefactor Group)
Retain Donors by Ensuring Your Processes Work
Donor Retention Tip 8: Communicate Transparently and Credibly
People who donate want to be sure that their money is benefiting those affected. Is their money being used to help a specific sea turtle? Which one? Disclose the amount of the donation generated and how it will be used. The best way to do this is to show how you have been able to make a difference.
People like to donate to a specific project. Clearly communicate what you are raising funds for, then use it for that exact purpose and report on your successes.
Donor Retention Tip 9: Issue Receipts and Certificates Quickly
This goes hand in hand with transparency. Provide your donors with a donation receipt for their tax records. This way they can easily prove their donations.
Donor Retention Tip 10: Continue the Dialog
Personal mailings, letters, and magazines are the best way to keep your donor community informed and connected. Other media include newsletters and the telephone. If you are aiming at a broad group, you can also use social media and blogs.
Report on challenges and successes and invite your community to voice their opinions and advocate for your causes and shared values.
Donor Retention Tip 11: Keep Contacts and Addresses Up to Date
Sending donor campaigns to invalid addresses is a waste of marketing resources – at best. The postal address as well as the email address must be correct so that your messages reach your donors. Therefore, check bounces after each email dispatch and keep all contacts up to date. Make it easy for donors to notify you if they move too.
Most of our email lists are full of people who may not donate anything more, which means we are spending a lot of time and money emailing them for no reason. You can make your email lists better by removing either uninterested or inactive people. If you can identify which people are interested in actually donating, you maximize your email ROI. (Andrews Wharton)
Donor Retention Tip 12: Communicate with People but Automate Processes
You would never use an automated telephone service to ask for pledges. This is best left to people. However, you won’t be doing anybody favors if you send out 1,000 donation receipts per email individually. From issuing tax receipts and thank you emails, to registration sign-ups and change of address cards, automated processes have their place.
By automating fundraising campaigns, donors can be individually addressed on an event-based basis. The prerequisites are maintaining donor data with all information from contacts and donations, intelligent software, and thoughtful planning with exact rules for each event.
Fundraising is Hard. Let Us Help You Make it Easier.
​​We’d love to help your foundation or nonprofit expand its donor base with recurring donors. We’ve curated a data set of donors educated on social, wildlife, and even political causes whose average donation is over $100. These donors are in the top 10% and believe in charity.
Andrews Wharton is known for sourcing data across the entire marketplace and curating it for your unique needs. We understand the importance of accurate, verified, and compliant data. We literally built a company on it! You can Be Certain, we know how fundamental data is to the future of your business.
