It’s easier to keep them than to find them
Donor Retention is the Key to a Successful Fundraising Program
I’ll be the first to admit that few things feel as good as bringing a new donor into an organization’s family, and why not? It takes months, maybe even years, of focused teamwork – prospect identification and research, meaningful outreach, attentive cultivation – to close that first gift.
It’s hard to get as jazzed up about renewing gifts, and that’s too bad, because donor retention is the key to creating a financial foundation to support your organization’s growth.
Repeat gifts comprise your most resource-efficient fundraising results, allowing your development team to concentrate their efforts on reaching new donors to grow the program. But those hard-won new donors will not be able to make up the deficit caused by loyal donors slipping out the back door.
Yet that is exactly what is happening. Late in 2023 the Fundraising Effectiveness Project (FEP), a research program sponsored by the Association of Fundraising Professionals and the Center on Nonprofits and Philanthropy at the Urban Institute, reported continuing decreases in donors and dollars, including a year-over-year decline of 18.7% in newly retained donors and a 7.4% decrease in repeat retained donors for the same period.
It has been nearly 20 years since Adrian Sargeant, then the Robert P. Hartsook Professor of Fundraising at Indiana University’s Lilly Family School of Philanthropy, quantified the value of paying attention to donor retention: “…it typically costs nonprofits two to three times more to recruit a donor than a donor will give by way of a first donation. It can take twelve to eighteen months before a donor relationship becomes profitable.”
In other words, we have long been encouraged to work smarter, not harder, by including time-tested donor retention strategies in our fundraising programs.
The last thing we want to do is to start over every year with totally new donors. We want to build our donor base, layer by layer, so that each year our community of supporters gets a little bigger. We want to build on as many individual donor relationships as we can, growing their giving from annual gifts to major gifts and, when possible, legacy gifts.
A strong, growing donor pool signals long-term sustainability, a quality that is important to those who see their giving as an investment in the future. It is not unusual for foundation or government agency funding applications to include questions about an organization’s fundraising success.
Here are six strategies you can put into action – quickly and at a relatively low cost – to support donor retention:
Stewardship 101: Timely, thoughtful thank-you letters. Set a goal for acknowledgment turnaround time, and a schedule for regularly updating thank-you messages. No donor wants to receive the exact same thank you letter year after year.
Stewardship 201: Communicate with your donors between solicitations. Nobody wants to feel like an ATM. Touchpoints that are simple and low-cost, such as personal thank-you calls and handwritten notes, can be meaningful. These kinds of activities are also great opportunities to engage volunteers. Focus on sharing the impact of donors’ support.
Create giving habits and routines with a regular schedule of solicitations. Monthly giving that auto-renews is a great way to keep donors on board. Monthly giving can also help you target your major giving cultivation efforts by indicating which donors are most engaged and ready to move up your giving ladder.
How and when you ask influences repeat giving. Which appeals produce the strongest overall results? Individual cultivation plans for major donors should take into account where they are in their continuum. What is going on in their family life? In their career? Envision your solicitation from their perspective.
Multiyear giving is a great way to bring donors along the continuum from annual gifts to major-level support. It is an especially useful strategy to encourage trustees and advisory board members to deepen their commitment to the organization, and it is a great opportunity to move donors from online giving and direct mail appeal responses to one-to-one conversations about their philanthropy.
Get to know your donors. Polls and surveys promoted via email and social media can help you build a large-scale understanding of why people give to your cause. You can use this data to strengthen your communications and outreach, and to drive your segmentation efforts.
The common thread running underneath all fundraising efforts – the timing of appeals, email and direct mail segmentation, major donor cultivation, solicitation timing, stewardship – is the goal to shift your donors’ role from casual supporters to passionate champions of your organization’s vision for a better future.
Make every effort to engage people in real conversations about their interest in your organization’s work. Show them what their contributions accomplish. Your investment in relationships will not only strengthen your organization’s donor base – it might just deepen your own understanding of the impact your organization is having in the community!
The More Than Giving Co. can help you find ways to find your donors, and keep them.
Schedule a call today to learn how we can help.