Nonprofit organizations rely on the generosity of their loyal donors to help them work toward and fulfill their purposes. That’s why donor retention is crucial for the success of your nonprofit. By retaining donors, you’ll guarantee a steady stream of revenue and lasting, deeper relationships with your supporters.
To create lasting relationships with your donors, your nonprofit must plan properly. In this guide to donor retention, we’ll cover the following topics:
- Why is donor retention necessary?
- How to calculate and evaluate your donor retention rate
- 8 strategies for donor retention
- Using eCards to improve donor retention rate
- Conclusion and additional resources
Your nonprofit may already have strategies for donor acquisition, but donor retention is very different and requires a different approach. To fully understand the difference, you’ll need to know the basics and best strategies for retaining your donors. Let’s get started!
Why is donor retention necessary?
While donor acquisition refers to the act of attracting new donors, donor retention refers to the continued engagement of a donor. Much like companies need to motivate their employees to stay, your nonprofit will need to motivate donors to continue their support.
Retained donors are individuals that give to your nonprofit on a regular basis, typically annually. These donors are loyal and fully committed to supporting your cause. Their regular gifts and consistent support provide many benefits to your nonprofit, such as:
- Cost-effective. Donor retention has a high ROI since it costs less to retain donors than it does to acquire them. Additionally, focusing on retention lowers fundraising costs since you’ll need to recruit fewer new donors, making it even more cost-effective.
- Future-proof your operations. Since retained donors make regular gifts to your nonprofit, you can count on them as a consistent source of revenue for the future.
- Stronger donor relationships. By engaging with your donors, you’ll see improved satisfaction and happiness. You’ll also have a better reputation as a nonprofit that truly cares about its supporters.
Ideally, you’ll want high donor retention and low donor attrition. The latter refers to the number of donors that stop giving, such as one-time donors. To help you weigh donor retention and attrition and make the appropriate adjustments to your strategies, you’ll need to calculate your donor retention rate.
How to calculate and evaluate your donor retention rate
To calculate your donor retention rate for the current year, divide the number of donors from the previous year that gave again in the current year by the total number of donors from the previous year, and then multiply by 100 to get a percentage. For example, let’s say you had 500 donors last year, and 300 of them gave again this year. In that case, your donor retention rate would be 60%.
In the nonprofit industry, the repeat donor retention rate is approximately 40%. This means that if your nonprofit has a higher retention rate than 40%, you’re doing better than the average nonprofit.
Having a high donor retention rate means that more of your donors are returning to make a gift to your nonprofit every year. As a result, you’ll be able to raise the same amount of funds as in previous years while attracting fewer donors. To improve your donor retention rate, re-evaluate your strategies and analyze key performance indicators (KPIs) to determine where your current strategy may be lacking.
8 strategies for donor retention
Here are eight easy-to-implement strategies to help improve your donor retention rate:
1. Show gratitude promptly.
When you give a friend a gift, you likely want them to appreciate it! Donors have the same feeling towards nonprofits—they want to feel recognized for the gift they’ve given your organization. And if donors feel valued, then they’ll be more likely to continue supporting your nonprofit.
You can show your gratitude through:
- Phone calls
The key to showing genuine gratitude is promptness. Letting too much time pass will leave donors wondering if their gift was valuable or if you’ve forgotten about them. Send some form of acknowledgment with a donation receipt within 24 hours of the gift. Follow this with a longer thank-you note expressing to the donor what they’re helping you achieve.
2. Share impact stories.
In your communications and thank-you notes to donors, give concrete and tangible details about the impact you’re driving with their gifts. For example, if your nonprofit works to build shelters for those experiencing homelessness, tell donors about the specific community they’re contributing to. Highlight details such as the materials you’ll need and the time it’ll take to give donors a better understanding of your operations.
Also, consider assigning impact labels to different donation amounts. These labels essentially translate donation amounts into specific results that your beneficiaries receive. For example, if your nonprofit works with animal shelters, you could say that $50 covers the food for three puppies for a month.
Aside from sharing the future benefits of donations, you can also share stories about beneficiaries you’ve already helped. This shows donors that your nonprofit is effective and dedicated to its cause and strengthens their trust in you to do the work you claim to do. Your effectiveness and ability to complete your goals will encourage donors to continue supporting you, as they are dedicated to helping you make a change.
3. Improve your communications.
Outside of thank-you communications, you should be regularly reaching out to donors. Mix your donation appeals with other messages such as event invitations and program updates. Being transparent with your donors will lead to stronger relationships and greater satisfaction, which results in a higher donor retention rate.
Additionally, you can personalize your messaging and implement donor segmentation so that donors receive communications that they will be more likely to engage with. For example, you can segment your donors by different demographics—for older individuals, you might send letters or emails. For younger audiences that are more technologically savvy, you could create social media posts.
4. Provide more ways to engage with your nonprofit.
You want your donors to feel valued by your nonprofit outside of their gifts. To achieve that, you can provide them with more ways to engage meaningfully with your nonprofit. Invite them to:
- Volunteer opportunities
- Share their story
For major or well-connected donors, you might consider inviting them to become a member of your board. This gives them the opportunity to directly impact your nonprofit and allows them to oversee and improve your operations, which can be a very fulfilling experience for trusted donors. When donors feel significant to your work, they’ll want to continue supporting your nonprofit.
5. Implement recurring gifts.
Recurring gifts are an obvious commitment that donors are making to your nonprofit, signaling to you that they have been retained. These gifts are usually given monthly, and nonprofits usually offer perks to recurring donors. Some perks include:
- Free merchandise
- Discounted tickets
- Early access to purchase tickets for events
- Additional program updates
- Exclusive events or communications
Implementing a recurring gift program helps you incentivize donors to become recurring donors. Consider what type of donors would be interested in this program and select perks that would appeal to them to increase the chances of converting them into recurring donors.
6. Organize peer-to-peer fundraising campaigns.
Peer-to-peer fundraising campaigns allow donors to take on the role of a fundraiser. If donors choose to participate, you’ll know that they’re invested in your nonprofit—otherwise, they wouldn’t post about you or share information about you with their friends and family.
These campaigns also provide your nonprofit with social proof. Your current donors are essentially endorsing your nonprofit to their peers, and other potential supporters will be able to see that many people endorse your nonprofit. In turn, this will encourage them to support your organization.
7. Ask donors for feedback.
When it comes to donor retention, don’t be afraid to go back to the source and ask donors for their feedback. Here are some questions you can ask:
- How long have you been supporting this nonprofit?
- Why did you decide to support this nonprofit?
- Is there anything we can do to improve your experience with us?
- Have you attended any of our events and how was your experience?
- Are you satisfied with the frequency and depth of our communications? What could we do better?
Not only do these surveys provide you with important information that you can use to improve your donors’ experience, but they also show donors that you value their opinion. Donors that are invested in your nonprofit will want to help you improve, so they’ll be happy to give their feedback.
8. Analyze donor data.
Donor data can give you many insights into your donors’ behavior. Examine your already existing recurring donors or long-time supporters to identify patterns. This can help you target your communications more effectively.
You can also use this data to assess donors that are at risk of lapsing. Some warning signs might include:
- Reduced engagement. If a donor that once engaged in your fundraising events, consistently opened your communications, and responded to your attempts to contact them stops doing those things, that is a sign that they are no longer as invested in your nonprofit.
- Decreased giving. If a donor that once made gifts regularly begins to make gifts less frequently or make smaller gifts than before, they may be withdrawing their support from your nonprofit.
- Life changes. Sometimes, donors lapse for reasons out of your control. For example, if a donor loses their job or suffers a family tragedy, they may choose to focus on their life circumstances and not on your nonprofit.
- Negative feedback. If a donor tells you that they don’t feel valued, they no longer feel connected to your nonprofit’s mission, or if they are otherwise dissatisfied with your nonprofit’s programs and communications, they may be at risk of lapsing.
By using the data you’ve collected on your donors to determine if they are at risk of lapsing, you’ll be able to mitigate the risks and encourage them to re-engage with your nonprofit. You can also make changes to your donor engagement strategies to increase donor retention. Even if a donor chooses to stop supporting your nonprofit, you’ll be able to craft targeted communications to convince them to reinvest in your cause.
Using eCards to improve donor retention rate
Sending an eCard to your donors is essentially like sending a physical thank-you note. It can be personalized, customized, and even interactive for maximum engagement, which makes donors feel appreciated and valued. Just like a physical note, an eCard can serve as a souvenir and a feel-good reminder to donors of the positive impact they have made. Furthermore, eCards are very convenient because of their virtual nature, and they are also eco-friendly and cost-effective.
You can send eCards to donors during these times:
- After donations. Ensure that your donors feel valued with an eCard sent just after they make a gift.
- Holidays. Sending an eCard to your donors for significant holidays such as Christmas is a great way to spread holiday cheer.
- Birthdays. Show your donors that they matter to you by sending them an eCard of good wishes on their special day.
- Invitations. You can invite donors to fundraising events, volunteer opportunities, or to other types of events. For example, Vineyard Church uses eCardWidget to allow its members to invite friends and family to church events.
- Anniversaries. Celebrate your donors’ support of your nonprofit by sending them an eCard on the anniversary of their first gift.
Don’t stop at special occasions—you can send eCards at any time! This shows donors that you care about them all the time, fosters a culture of appreciation, and results in a higher donor retention rate. Consider giving donors access to eCards branded to your nonprofit that they can send their friends. Your donors will be able to both endorse your nonprofit and send their peers a heartfelt message.
Conclusion and additional resources
To keep donors invested in their cause, it’s crucial for nonprofit organizations to focus on donor retention and stewardship. There are multitudes of ways you can improve your retention strategy, but keep in mind that your strategy should be unique to your organization and donors. Whether that’s through compelling impact stories or eCards, establish your nonprofit as one that genuinely values its supporters.
To learn more about using eCards, take a look at these resources:
- Charity eCards for Your Nonprofit: A Comprehensive Guide – Charity eCards are a unique way to set your nonprofit apart from others. Learn more about implementing them with this resource.
- A Comprehensive Guide to Great Donor Thank-You Letters – Read more about donor thank-you letters, a popular donor retention and stewardship strategy.
- A Complete Guide to Employee Recognition + Top 10 Ideas – Your donors contribute a lot, but your employees are equally as crucial to everything your organization does! Check out these ideas to keep your employees happy.