- Fundraising ideas
- Guided Fundraising
As a general rule, retaining existing donors costs less than acquiring new ones. Current donors have already expressed an interest in your nonprofit organization’s purpose and have demonstrated a willingness to act on it. This means for most nonprofits, reducing donor losses—and increasing donor retention—is the most affordable strategy for sustainable fundraising.
In this guide, we’ll explore the current state of donor retention, including reports on the average donor retention rate and strategies for improving your own efforts. But first, let’s answer some common questions.
Why is donor retention so important?
Donor retention is an important metric for nonprofits to measure, as it can have a big impact on their overall fundraising success. Organizations with higher donor retention rates tend to have more stable and predictable sources of funding and are therefore better equipped to meet their fundraising goals in the long term.
What is a good donor retention rate?
A good donor retention rate for nonprofits is generally considered to be around 60% or higher. However, the average donor retention rate across nonprofits is typically much lower, hovering around 40-45%. This means that a significant portion of donors feel less inclined to give year after year.
Donor retention statistics to keep an eye on
According to the most recent Fundraising Effectiveness Survey Report, nonprofits’ overall donor retention rate dropped by 3.5% from 2021 and the number of active donors decreased by about 6%.
Not only are nonprofits struggling to retain donors, but some donor segments are trickier to keep than others. In 2022, micro donors (who gave less than $100) decreased by 14.9%, and small donors (who gave between $100 and $499) decreased by 8.4%. Additionally, the retention rate for new donors dropped by 16.9%.
While these donor retention statistics may seem daunting, there is room for improvement through more targeted and strategic engagement efforts. By focusing on building strong relationships with donors, your nonprofit can create a loyal base of supporters who will continue to give in the future.
5 ways nonprofits can improve donor retention rates
If your nonprofit wants to reduce its reliance on costly donor acquisition and build a solid foundation for long-term donor retention, follow these tips:
- Track your retention rates. A surprising number of nonprofit development departments aren’t sure what their current donor retention rate for the year is. Staying updated on the status of your program’s retention is the first step to improving it.
- Start with a donor stewardship program. Building donors’ loyalty to your organization means engaging them in a variety of ways outside of fundraising asks. This includes hosting donor appreciation events, sending personalized thank-you letters, and offering opportunities for continued engagement, such as volunteering or participating in surveys.
- Automate recapture and renewal efforts. Don’t leave it up to already-busy staff to remember when recapture and renewal outreach should start. By automating the process, you can send donors a personalized message as soon as they begin to lapse, which will create a seamless experience for everyone involved.
- Appeal to donor preferences. Collect and analyze information about donors to identify patterns in their preferences, interests, and motivations for supporting your cause. Then, tailor your communication and engagement efforts accordingly. Taking the time to get to know your donors will make them feel valued and, in turn, inspire their continued support.
- Emphasize the importance of a donation. Donors want to know how their contributions are making a tangible difference. Provide regular updates on how their donations are being used to reinforce their commitment to your organization. For instance, an animal shelter might send a first-time donor the following personalized email: “Thanks to your $100 contribution, we were able to provide free medical care to Luna, a German shepherd puppy who was suffering from parasites. Because of generous donors like you, our furry friend is wagging her tail again.”
It can be helpful to have a designated individual or team responsible for overseeing donor retention efforts, tracking retention rates, and implementing strategies to improve retention. This team can work with other departments, such as marketing and development, to ensure that donor retention is a priority throughout your organization.
A final note about donor retention
While securing new donors is important, retaining existing supporters is equally vital and can lead to sustainable growth over time. By taking the current state of donor retention into account and adjusting your strategies accordingly, you can grow your dedicated base of supporters and increase their impact in the communities you serve.