The State of Donor Retention in 2021
It’s no secret that the landscape of online fundraising has shifted dramatically post-pandemic, yet one challenge remains the same—donor retention. While online fundraising as a whole grew by 10% in 2020—donor retention rates saw one of the largest declines in recent years, dropping to a record-low of 43%. That means nearly 60% of new donors aren’t returning to nonprofits for a second gift.
The good news is nonprofits now have more tools and technology at their fingertips to re-engage with lapsed supporters and forge authentic connections. Virtual and hybrid event adoption are exploding across the sector—with 73% of nonprofits planning to hold a virtual or hybrid fundraising event in 2021. This presents a new opportunity for nonprofits to reach more donors across new geographies and demographics.
With peak giving season on the horizon and planning mode in full swing, now is the time to map out a game plan to pivot your traditional approach and reimagine how to retain these new supporters with unique experiences like virtual and hybrid events.
A New Way to Re-Engage: Virtual Events & Fundraisers
Virtual events were bred out of necessity as in-person events were put to a screeching halt in the wake of COVID-19. But the value has proven to extend beyond a short-term solution, to serve as a long-term means to drive growth. As nonprofits are leveraging the flexible technology to maximize stewardship, education and retention opportunities.
Even as we shift back to in-person fundraising events, investing in a virtual solution is important to consider for a few reasons:
- Donation Potential
Accessibility—move beyond location and time barriers and reach a global audience. In addition, as donors transition out of a post-pandemic giving landscape, some may not feel comfortable engaging in-person. Offering a virtual or hybrid option keeps your cause accessible to all of your donors and gives you an opportunity to expand into new communities.
Cost—Budget is a constant pressure for any nonprofit. When you invest in the in-person experience, what you gain in rapport you lose in actionable insight. So many of the valuable engagements and conversations from the day get lost in the shuffle. With a virtual component you capture these key moments, and leverage valuable engagement data from the event to enhance stewardship efforts. With live chat, Q&A, polls, breakout sessions, and networking tools you’ll gain strategic insights into your donor’s activity to help inform your retention tactics. At a high level these are the key areas you’ll cut corners on budget when transitioning to virtual events:
- Venue—Location is everything, and the right venue can make or break the success of an onsite event. Make the experience accessible for all and scale the virtual experience to meet your needs—whether you have an audience of 50 or 500.
- Staff—Cut down the total number of staff you need to support and execute an engaging onsite experience. If you’re a nimble team, exploring an all-in-one virtual solution will give you access to powerful tools and resources to create, manage and host events so you can scale programs for your donors.
- Travel—Save money on flights, hotel rooms and travel accommodations for your staff and make the event more accessible for donors to join regardless of their budget.
The money you save by going virtual can be reinvested back into your donor’s and attendee’s experience to make for a truly unique and engaging event. Put those dollars towards virtual contests or giveaways for your community.
Donation Potential—If you’re not incorporating a virtual fundraising component to your event strategy, you’re leaving money on the table. With virtual tools like donor leaderboards, mobile bidding and real-time donations, you can gamify the experience, build competition and bring the excitement of the in-person event to your virtual or hybrid attendees.
Engagement—Zoom fatigue is real. Why put your time and resources into planning and hosting a lackluster event? Virtual and hybrid tools give you the opportunity to integrate engaging elements like live donor leaderboards, networking, mobile bidding, and real-time progress bars to build competition, showcase top donors and show impact the moment it’s made.
The secret to harnessing the power of virtual to drive retention? Be unconventional. Get creative. Think outside of the box. Your donors are unique and the success of your event depends on tapping into their minds. How often do they engage? What motivates them to give? What do they need to feel recognized?
Driving Retention With Virtual & Hybrid Events: Segment for Success
If you’ve held virtual events on Zoom before, chances are you’ve noticed declining attendance rates and overall lack of engagement among your donors. And all of the above makes it hard for nonprofits to forge authentic connections, garner attention and engage with their online and virtual supporters in a meaningful way.
It’s noisy, it’s crowded, it’s distracting—to drive authentic interest, you need to make sure the experience you craft is relevant, entertaining and engaging.
To get there, you must start by cultivating a deep understanding of who your donors are. Start by segmenting and diving deeper into the data to understand how to best target these audiences and craft experiences that bring value and break through the noise. At a high level, I suggest mapping out the following five segments:
- First-time donors
- Lapsed donors
- Annual/Yearly Donors
- Monthly Donors
- VIP Donors/Major Givers
We’ll break down each of these donor segments further for insights you need to brainstorm creative events or experiences to captivate, engage and motivate them to stay connected to your cause.
Segment 1: First-Time Donors
- Who are they? They have given to your nonprofit for the very first time in the past 12 months and haven’t returned to give again.
- What do they care about? For this segment, a little recognition will go a long way. Their relationship with your organization is still new, and understanding how their first donation made a difference and different ways they can continue to support will keep them inspired to stay connected to your cause.
- What types of virtual events resonate with them? Showcasing impact will be the best approach to truly make these donors feel seen. Explore hosting live interviews with the recipients of their donation, and give them the opportunity to share their story and how it’s helped them. You could also take donors behind-the-scenes and give a live tour of your facility, introducing them to the staff and going into depth on key programs their gift is helping support.
Segment 2: One-time/Lapsed Donors
- Who are they? They gave to your nonprofit one time, but never returned to give again (outside of the 1-year mark).
- What do they care about? Reconnecting with past donors is far more cost efficient than acquiring new donors—but this also presents its challenges. There’s a reason they left your nonprofit, and it’s your job to win them back. For this segment, crafting virtual events that focus on authenticity, entertainment and differentiation will be key to truly speak to these stalled supporters and inspire them to reconnect to your cause.
- What types of virtual events resonate with them? These donors have likely already committed their support to a different organization, so it’s critical to craft truly unique experiences to reignite their interest. Focusing on entertainment driven experiences will be key—think virtual or hybrid comedy events, concerts, or cooking classes.
Segment 3: Annual/Yearly Donors
- Who are they? Your tried and true donors—they don’t engage often but when they do, they make it count. They donate just once a year (typically around year-end) and have likely given to your organization over the span of many years.
- What do they care about? For this segment, providing routine updates is crucial. From progress updates to programs changes and campaign plans—while this cohort isn’t giving regularly, they still want to be informed about the bigger picture and know that their major gift is being used to drive growth and expand your mission.
- What types of virtual events resonate with them? Monthly “town hall” type meetings would serve this segment well. Provide updates, challenges and goals and give them the opportunity to feel a part of your “advisory board.” You could also hold a “Year in Review” event—call out key milestones you’ve achieved as a result of their support and turn it into a “highlight reel” that you can share with your community.
Segment 4: Recurring donors
- Who are they? Recurring donors are among some of your most loyal and dedicated donors, as they return each month to contribute to your cause. While their initial donation is typically on the smaller side, these add up over the course of years and constant communication and activation of this segment can reap major benefits for your organization.
- What do they care about? For recurring donors, cultivating a sense of community, making their impact known, and forging connections with other donors and sharing their ideas is what will motivate them to stick around. Give them an opportunity to be in the spotlight—host monthly community forums where they can connect and contribute their ideas and opinions. Be transparent with the donors, bring challenges to the table and make them feel like a part of the solution. Use these supporters to bounce off new campaign or fundraiser ideas as they are some of the most ingrained in your cause and how to tap into the minds of donors just like them.
- What types of virtual events resonate with them? Focus on smaller-scale events that give them the opportunity to engage 1:1 and network with other recurring donors. Think private classes, group sessions, or community workshops.
Segment 5: VIP Donors/Major Givers
- Who are they? Your high-ticket donors, who have likely been involved with your organization for the long haul. You should handle these relationships with care and truly craft personalized experiences that put them in the spotlight.
- What do they care about? This segment of donors is highly connected to the growth of your nonprofit and understanding how their contribution is driving new programs and initiatives to drive greater ROI for your organization.
- What types of events resonate with them? To drive authentic engagement, you should explore intimate “white glove” experiences and events. Think live auctions, silent auctions, and galas. These donors present an opportunity to shift to a higher ticket event where you can drive more donations before, during and after the event. Since ROI is top of mind for this segment, consider hosting an annual virtual or hybrid growth summit. You can use this engagement to give live updates to highlight your nonprofit’s growth and how their contribution helped get you there.
Planning for a Hybrid Future: Map Out Your Year-End Events
No matter your organization’s size or sector, adopting a virtual or hybrid event component to your retention and stewardship strategy will pay dividends. These engaging platforms present a unique opportunity to bring your mission to life, show donors the impact of their gift and authentically connect with them in a crowded online landscape.
Now that you have the framework to segment your donors and ideas to get started, you can prioritize planning. There’s no shortage of creative ideas to explore. In fact, you can get strategic and use these intimate virtual experiences to connect with donors for insights and feedback to inform your year-end campaigns.
Start small, focus on one of your five key segments, and get creative! Don’t overlook the value of your different segments and give them authentic opportunities to engage with your cause. We’re several months out from peak giving days like Giving Tuesday and Year-End and now is the time to test different ideas and hone your virtual strategy so you can end 2021 on a high note.