Increasing Your Fundraising Success by Retaining Your Donors

Donor Retention Rates

When we conduct a fundraising audit/planning study there are at least 27 different reports that we request. One of the most important elements we obtain is a report on donor retention.

More specifically, we review donor retention rates over a three-year period. We are looking to see both how that compares to the national rate of 46% and what the non-profit organization might do to improve donor retention.

Of course, retention rates vary depending upon the kind of institution it is. For example, retention rates in private higher education average closer to 70% while social service agencies tend to have lower retention rates.

Acquiring New Donors is Costly

Why do we analyze this? Well first, according to Giving USA, acquiring a new donor is about 5 times as costly as it is to retain a current donor. Second, the actual return from newly acquired donors is about 1/3 of what it costs to acquire them in the first place.

Simply stated, acquiring new donors is much more costly and time consuming than keeping them. One of our higher education clients had a retention rate of just 34% over a three-year period. That means that each year 66% of their donors had to be recruited. The task was overwhelming for the development staff.  They had to raise over $4 million in unrestricted funds annually, and a good portion of that came from new donors.

Tips to Enhance Donor Retention

So what could be done and as fundraising consultants what did we tell them? The following are a few tips that will enhance your donor retention and should also increase your annual giving:

  1. Be thankful to and for your donors, and acknowledge their gifts promptly. I have found organizations that take one or two weeks or even more time to acknowledge gifts. Right off the bat you are telling donors their gift isn’t very important. We suggest that our clients acknowledge gifts within 48 hours and encourage them to move towards 24 hours.
  2. Be accountable to your donors as good stewards. Tell them how much you raised and for what purposes you used the funds. People want to know that their gift makes a difference. Show them how they have been a partner with you in your work. Share stories of lives that have been touched.
  3. Communicate with donors on a regular basis. How? A good communication program includes direct mail, newsletters, social media, information receptions, telephone calls and more. Remember, it is much more to your advantage to keep a donor than it is to lose one and have to recruit another.
  4. Pay attention to what projects your donors support and target your requests for specific purposes. Not all people are motivated by the same projects, so the requests should vary.
  5. Seek to engage donors in meaningful ways. One of our theatre clients did an excellent job of creating community with donors. For example, they regularly invited top donors to visit with playwrights prior to the opening of a show or the creative director before the season opened. In addition, they would invite selected donors to provide reviews of certain live performances. They also sent donor welcome packs to new donors.  These strategies were key in increasing donations and improving donor retention.

These are just a few strategies, but together they can make a significant improvement in your funding. Measure your donor retention rate and then work to improve it. That is really where the action of caring and building strong relationships begins!