- Capacity building
- Coordinating social services
- Corporate social responsibility
- Digital communications & marketing
- Employee giving
- Employee volunteering
- Fundraising ideas
- Giving day
- Grant management & grant making
- Medical affairs
- Peer-to-peer fundraising
- Educational institutions
- Financial institutions
- Foundations & grantmakers
- Life sciences
- Public agencies
- Case Management
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 article, 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.
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Why is donor retention so important?
Donor retention is an important metric for nonprofits to measure, as it can have a major 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. And, because the donor demographic shift is underway from baby boomers and the silent generation to Gen X, fundraisers will need to raise the same (or more) funds from a smaller pool of donors — making the retention of existing donors that much more important.
What is a good donor retention rate?
The average donor retention rate across nonprofits hovers around 40-45%. This means that a significant portion of organizations’ existing donors feel less inclined to give year after year. Start identifying a good target donor retention rate for your nonprofit by first measuring your overall existing retention rate and comparing it to the 40-45% benchmark, and setting a goal against it!
Donor retention statistics to keep an eye on
According to the Fundraising Effectiveness Survey Report for the third quarter of 2023 (July, August, and September), nonprofits’ donor retention rates “were boosted early in the year, but started going down again in August”. After adjusting for late data, AFP anticipates retention dropped by 1.3% in Q3 compared to 2022. This is a smaller drop than previous reports have captured: for example, nonprofits’ overall donor retention rate dropped by 3.5% from 2021. Donor participation also fell in Q3 of 2023 by 7.6%.
Not only are nonprofits struggling to retain donors, but some donor segments are trickier to keep than others. In the third quarter of 2023, micro donors (who gave less than $100) decreased by 15.7% year over year, and small donors (who gave between $100 and $499) decreased by 7.9% year over year. Additionally, the retention rate for new donors dropped by 16.9%.
Many of the donors being lost are among the smallest, which means more and more philanthropic dollars are becoming more and more concentrated in the hands of fewer and fewer donors. Some scholars worry about the implications of Americans’ less democratized charitable giving, and they connect growing wealth inequality and other structural causes to this trend. This pattern also contributes to a more competitive environment for nonprofits seeking the support they need to fuel their work — and this can also affect the supporter experience fundraisers give to their donors.
Looking for tangible ways to demonstrate to your existing supporters that you appreciate them? Try this evidence-backed tactic from nonprofit fundraising, engagement, and technology expert Kirstie Kimball of Build Power Strategies!
While the current donor retention statistics may seem daunting, there’s 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 build a solid foundation for long-term donor retention, try 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. This kind of improved supporter experience will help donors reengage with your work in a timely way and save your staff time as well.
- Appeal to donor preferences. Collect and analyze information about donors to identify patterns in their communication preferences, interest in specific projects or initiatives run by your organization, and motivations for supporting your cause. Store that information in your constituent relationship management (CRM) platform, and use it to tailor your messaging and engagement efforts. Taking the time to get to know your donors and offer them a more robust, personal supporter engagement experience will make them feel valued and, in turn, help drive 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 (if not more) important to nonprofits’ sustainable growth over time. By measuring the current state of donor retention, benchmarking your organization against recent data, and adjusting your strategies, you can grow your dedicated base of supporters and work together to increase your impact in the communities you serve.
The right strategies and technology should help nonprofits of all sizes retain more support over time and propel you to your peak impact. Download our guide, Next-level donor retention and renewals, for even more expert tips on a more retention-friendly supporter experience, communication strategies to keep donors coming back, and more!