For nonprofits, donor retention often plays second fiddle to the more glamorous task of donor acquisition. However, the importance of holding onto existing donors cannot be understated. The entire team must prioritize and understand that robust donor retention strategies are not just beneficial but essential to meeting fundraising goals.
In the hustle to attract new donors, nonprofits can inadvertently neglect their existing supporters. The result of this oversight is evident in the numbers: a staggering 81.4% of those first-time donors never come back to make a second donation.
It’s time for a shift in perspective. We urge your team to place donor retention strategies at the forefront, addressing the rising attrition challenge. In this post, we’ll guide you on actionable steps nonprofits can take to bolster their donor retention rates.
Navigating Donor Retention Challenges in Nonprofits
Nonprofits can get tunnel vision, often focusing too much on donor acquisition. When they do this, they’re not taking into account their donor attrition rateโhow much money is lost by not re-engaging lapsed donors. Attrition affects nonprofits’ donor retention rates in a big way.
A recent Giving USA report reveals a concerning trend: In 2022, charitable donations amounted to $499 billion, marking the first decrease since the pandemic’s onset. Despite this 10.5% drop from 2021, it’s worth noting that the past two years saw record-breaking generosity, with overall donations still surpassing 2019 figures.
Given this backdrop, nonprofits face the challenge of sustaining and even growing their fundraising revenues. This becomes even more daunting when confronted with the reality of donor attrition.
Data from the Fundraising Effectiveness Project underscores this challenge: In 2022, donor retention in 2022 stood at 42.6%, meaning that nonprofits are losing 57.4% of current donors.
This scenario underscores the need for a holistic approach to grow donor retention.
While a multifaceted fundraising strategy is essential to cater to all donor segments, it’s equally crucial to engage first-time donors effectively. By leveraging proven donor retention strategies, nonprofits can transform these one-time contributors into enduring supporters.
5 Effective Donor Retention Strategies
Nonprofits need to recognize that donor retention hinges on meaningful communication. Our guide to donor retention emphasizes this.
Every touchpoint with a donor should resonate with authenticity and appreciation. It’s not just about acknowledging their donation with a receiptโit’s about offering genuine value. Making donors feel integral to a cause is paramount.
Let’s delve into the core strategies to effectively boost donor retention.
1. Send Multiple Thank-Yous
At a minimum, you’re probably already sending a receipt after each donation. You’re also likely sending a thank-you letter to major gift donors. However, to be truly responsive in your fundraising efforts, you should ensure that every donor receives a thank-you letter immediately following their donationโno matter the gift size (remember: small gifts can foster lasting relationships and be made regularly, like setting up monthly contributions for consistent support). Send an email separate from the receipt to make it more personal and engaging.
“Nonprofits should analyze their gift acknowledgment processes and ask the following question: Are our gift acknowledgment letters being sent out in a timely manner? If an organization forgets to acknowledge a donor or acknowledges their donation at a much later date, the organization will likely lose the donor. Development staff should be sending gift acknowledgment letters to their donors within 48 hours of receiving a donation.”
Mike Esposito, CFRE, Director of Growth and Strategy of Hudson Ferris
Understanding the donor journey is essential to turning first-time donors into repeat donors, and guiding them toward making more meaningful contributions.
For example:
- Start with a simple follow-up email from your nonprofit, spotlighting the tangible difference their donation made. Opt for a plain-text emailโit feels more intimate, as if someone from your team penned a heartfelt note just for them.
- Then, send a direct mail piece with all your favorite pictures capturing your previous year’s achievements.
- And lastly, if they’re open to it, give them a nod on social media. Making donors feel seen and valued can make all the difference.
Automated Workflows
If the thought of sending individualized touches to each donor feels daunting, there’s a silver lining: automated workflows. With Virtuous, we’ve streamlined the process for nonprofits to improve donor retention. Our platform offers pre-configured workflows, from welcoming newcomers to celebrating donors when they reach significant giving milestones. Making personal connections has never been more efficient.
The result? This frees up staff time but helps you make progress toward increasing donor retention.
For organizations like A Kid’s Place Tampa Bay, automation plays a key role in helping the team maintain and strengthen donor relationships. Understanding donor segmentation is critical to developing personalized outreach strategies. Through consistent and curated communication based on thoughtful donor segmentation, they provide unique and engaging donor experiences.
โTalking to your donors more and keeping them informed helps bring in more money. By using a platform that easily sets up emails, and getting into a more repetitive or regular communication with our donorsโwhether thatโs a phone call, letter, or emailโwe keep that same story going,โ
Samantha Mellon, Director Development of A Kid’s Place Tampa Bay
For many nonprofits, rolling out a parade of thank-yous might be a stretch, given their resources. And thatโs perfectly fine, but to retain donors, we must always strive to improve. It’s not about how often you reach out but the depth and sincerity of your message. The goal? Ensure donors know they’re valued. Reinforce that they’re not just members of your nonprofit circle, but vital contributors to the solution. Highlight real-world impact stories of how their kindness is driving your organization’s positive impact.
2. Showcase Impact to Increase Donor Retention
Nonprofits often share data to illustrate how donor generosity drives real-world change. These figures offer a snapshot of the organization’s impact, even for those just skimming the content. But capturing attention is only half the battle. To forge lasting bonds with donors and encourage long-term commitment, it’s crucial to pair these statistics with compelling stories.
“Share impact. Let your donors know why their gift matters and the impact they are having on your programs. Reporting back should be done consistently and regularly.”
Jocelyn Kwok, Principal Consultant of jskwok consulting
When keeping donors in the loop about their contributions, it’s essential to strike a balance. Blend hard data with the human touch. Feature stories from your team, showcase photos of those benefitting from the donations, and pepper in video snippets from the heart of the action when possible.
Remember that serious work doesn’t always require serious stories. If you capture a funny situation or a moment where everyone is having fun, don’t be afraid to show it off to your donors. Not only will they connect to the stories, but it may encourage them to further their activism and become advocates of your cause by creating a peer-to-peer campaign as well.
3. Collaborate on Future Goals
Some challenges, like curing a disease, are vast and can make it hard for donors to stay engaged, especially when progress isn’t always visible. It’s natural for donors to drift when they don’t see immediate results.
To keep their interest alive, be transparent about upcoming objectives. Collaborate with your team to set achievable short-term goals, like raising $100,000 for new drug research. After setting these targets, send a quick survey to measure donor enthusiasm. This not only keeps them informed about your mission but also emphasizes their importance in shaping it. By inviting their feedback, you make them feel integral to the change you’re driving.
Plus, this approach ensures you’re not investing in initiatives that might miss the mark with your supporters. Being in the loop about immediate plans might even inspire them to commit as monthly donors, furthering your efforts to increase your average donor retention rate.
4. Personalize the Donor Experience
You have a lot of information about your donors’ activity right at your fingertips that you can use to personalize their donor journey with your organization. Virtuous’ responsive dashboard gives your team a birds-eye view of donor behavior, gleaning rich data insights on activity level and helping you make evidence-backed decisions on how to personalize communications.
You can increase donor retention by using this data to celebrate important milestones. Call your donors to celebrate their anniversary of giving. Send a card when they’ve donated $1,000 in their lifetime. Create friendly, regional competitionsโhighlighting top donors in a few major cities across the country.
Taking these extra steps in personalizing the donor experience will show that you are listening, connecting, and learning about donors, and can suggest the next steps they should take with your organizationโall a part of the responsive framework that centers around the donor.
5. Meet Donors Face-to-Face to Increase Donor Retention
If you’re ready to go all-in to build real, authentic relationships with donors, find opportunities to connect with donors in person. While donors will appreciate the personalization and consistent cadence of communications that include emails, phone calls, and letters in the mailโno connection is stronger than one that is built face-to-face.
Fundraising events aren’t just about raising money; they’re about building connections. They are pivotal in guiding donors along their donor journey, from the first donation to becoming lifelong supporters. Here’s why hosting an in-person event can be a game-changer for your nonprofit:
Boosted Revenue: Offset your event expenses by charging an entry fee. Aim to set your ticket sales target a notch higher, say 20% more than your event budget, ensuring a healthy profit margin dedicated to your mission.
Instant Donor Acquisition: Attendees often bring along friends and family, broadening your donor base. It’s a ripple effect where one engaged donor can lead to many more.
Empower Advocacy: Beyond just attending, give your supporters a chance to champion your cause. Consider introducing fundraising tools that allow them to rally funds on your behalf.
Deepen Donor Relationships: Events, whether they’re 5K races or chili cook-offs, offer a unique setting to interact with and understand your supporters. A successful event can leave attendees feeling invigorated by your mission and eager to hear more about the change they’re facilitating.
Long-Term Donor Retention: Use your event as a platform to promote your monthly giving initiative. Highlight the lasting impact of consistent contributions to encourage more donors to give. The immediacy of an in-person pitch can be a catalyst for your recurring donation program.
And to make event registration seamless, Virtuous offers custom-branded registration pages. Once supporters register for an event, they’ll get automated registration email confirmations and receipts. Plus, on the backend, you’ll gain access to real-time event data and donation tracking that your team can use to create personalized donor journeys for every attendee.
Bonus: A Quick Donor Retention Strategy To Get You Started
While some of our recommendations might be on your horizon, there’s one tool every nonprofit, regardless of its scale, can harness now: the art of a heartfelt thank-you letter. Let’s delve into the components that elevate a simple acknowledgment into a compelling message, sparking both loyalty and intrigue.
Nail the Basics
Start with the essentials. Clearly mention their name and the exact donation amount. But don’t stop there. Personalize the message as much as you can. Don’t email a thank-you from a generic email account (nothing feels more impersonal than getting an email from ‘[email protected]’). The goal is to express gratitude and to ensure they know that they aren’t just another transaction for your team.
Showcase the Difference They Make
Detail how their contribution is utilized. If there’s a specific breakdown, share it. For instance, if 60% goes to administration and 40% directly fuels the cause, let them know. Honesty fosters trust.
Consider collaborating with a designer to represent the impact of varying donation amounts visually. If a $100 donation equates to 100 water bottles, depict that. This type of clarity not only helps donors understand their impact, but might also motivate them to graduate to the next giving level for their next donation.
Offer Additional Giving Opportunities
Many nonprofits hesitate to approach their donor base frequently. While it might seem counterintuitive to pitch another ask in a thank-you note, consider this: Donors who have just given are your most engaged audience. They’re ready to champion your cause. They just need direction.
In your thank-you note, suggest non-monetary ways they can further support. Maybe they can spread the word by sharing an info packet or posting about your cause on social media. Perhaps there’s an upcoming event they can volunteer for. By offering a next step, you’re not only showing them the breadth of your initiatives but also guiding them on how they can help. It’s a fitting continuation to a heartfelt thank-you.
A Better Donor Retention Rate Awaits
Retaining loyal donors requires a sophisticated communications plan with touches of personalizationโit’s imperative to your success as a nonprofit. Check out our Donor Retention Playbook to learn more about how you can foster deeper donor relationships at scale.
