The Importance of Donor Retention and 3 Steps to Get There
There are probably a lot of reasons you can think of as to why donor retention is important. For one thing, having a set group of supporters who contribute regularly provides your nonprofit with a strong financial and general community foundation. But, the importance of donor retention goes even deeper than that…
You’ve likely heard or know from experience that acquiring new donors is much more costly than turning current/past donors into recurring ones. This is because retaining donors typically only requires a certain level of displayed appreciation and general relationship maintenance with those donors…Whereas acquiring new ones often involves launching new campaigns, events, and other efforts that require a financial investment with the hopes of getting a return.
A startling figure from The Chronicle of Philanthropy reveals that 103 donors were lost by charities for every 100 that were gained in 2014. Data like this is especially daunting for smaller nonprofits, who typically have less funds to put into acquiring new donors than larger nonprofits do.
Successfully retaining your donors is the most cost effective way to increase your nonprofit’s fundraising returns. Donations from recurring donors and potential increases made to those gifts are much more valuable than contributions from new donors, as they could cost you a lot to receive in the first place. Approximately 60% of donors only donate once, so whatever you invested in order to gain those one-time donors is ultimately a loss on that investment.
Retaining your donors can be as simple as following 3 steps (at minimum):
1. Sending a prompt and meaningful thank you following each donation
2. Allowing for restricted funds
3. Informing donors of how their gift was helpful
So, the main reason donor retention is critical is because doing so has been proven to be the most lucrative fundraising strategy for nonprofits! And right now, it’s even more important because the data is showing that there are fewer and fewer “new donors” each year, making your past donors some of the only donors available!
Our advice? Love your donors! They’re awesome and deserve to be shown that. They’re helping you keep your doors open and they need to know their personal impact, how much they’re appreciated for it, and to be given some power in choosing where their donations are going. All of this spells out R-E-S-P-E-C-T! — Find out what it means to your donors!
Check out more articles about donor retention here.