Donor Retention: A Comprehensive Guide + 9 Strategies

When nonprofits grow their donor base, they gain access to more revenue that can be used to launch new initiatives, expand current programs, and generally advance their mission. Growth requires acquiring new donors, but effective growth also means keeping current ones.

Nonprofits with high donor retention rates are sustainable nonprofits, and with that sustainability comes the ability to grow, try new projects, and weather setbacks. 

With retention rates for both new and existing donors falling, now is the time to reassess your nonprofit’s retention strategy or create one if you haven’t yet. In this guide, we’ll answer essential questions nonprofits have about donor retention before diving into our top strategies for retaining donors.

Donor Retention FAQ

What is donor retention?

Donor retention measures how many donors who previously gave to your nonprofit continue to do so. Your donor retention rate is the percentage of donors who continue to contribute to your organization. Calculate this percentage by dividing the number of donors that gave this year by the number of donors that gave last year and multiplying that number by 100. The average repeat donor retention rate for nonprofits is 45%.

Donor Retention Rate = ((number of donors at the end of a period – number of new donors at the end of a period) / donors at start of the period) x 100

Donor retention is also useful for determining how financially healthy your nonprofit is. While nonprofits with poor finances can have a higher-than-average donor retention rate and vice versa, nonprofits that maintain their donors generally have the stability to expand their operations, make reliable fundraising estimates, and recover from financial setbacks.

How does donor retention fit into the donor lifecycle?

Consider your nonprofit’s view of the donor lifecycle. Is it a process wherein donors become familiar with your nonprofit, learn more, donate, and then are finished? Or does the cycle repeat?

Retained donors will go through the process of giving many times throughout their engagement with your nonprofit. Let’s compare the lifecycle for one-time donors, which even nonprofits with high retention rates will always have, and retained donors.

• Donor acquisition involves marketing your nonprofit to prospective supporters and guiding them to make their first gift. This usually involves creating and maintaining outreach materials, such as your website, social media posts, flyers, and letters. Prospective supporters use this information to learn about your nonprofit and eventually navigate to your donation page to give.
• Donor cultivation is the process of building relationships after their initial gift. From their first donation, you now have their contact information and can reach out to them to thank them for their support, invite them to participate in other activities, and provide updates on the campaign they contributed to.
• Donor upgrade refers to when donors who have given to your nonprofit several times in the past increase their support level. For the average supporter, this usually entails a slight increase in their routine donations. However, this is also where donors you’ve identified as prospective major donors may begin to make major gifts.
• Donor lapse occurs when a donor no longer gives to your nonprofit. Many supporters are interested in only giving once and will lapse immediately after their first gift. Nonprofits can take steps to retain more of these donors, but even the most sophisticated, donor-focused nonprofits won’t have 100% retention rates. Donor lapse is primarily a concern if many of your previously recurring donors begin to drop their support.

Nonprofits have the term “the golden rule of donating,” which refers to securing a second gift from donors. This is because, on average, only 20% of donors give again after their first gift, whereas 60% of donors continue giving after their second gift. This means donors who give multiple times are the most likely candidates for continuing to give far into the future.

Why is donor retention important?

We’ve already touched on a few positives of donor retention, and there are essentially no downsides to continuing to collect donations from the same supporters repeatedly.

However, there may be even more benefits to donor retention than you first assumed. Let’s look at just a few reasons nonprofits should focus on their retention rates:

• It’s cost-effective: Consider how much it costs to acquire a single donor. This includes the expenses of buying advertising space, creating marketing materials, and spending time reaching out to prospective supporters. Ultimately, it’s much cheaper only to spend the cost of acquiring a donor once and continue to receive support from them than spending it again and again to find new donors to replace lapsed ones.
• It prepares your operations for the future: When donors consistently give to your nonprofit, you can rely on their support as a regular revenue source. This makes planning your monthly budget easier as you can accurately predict how much you’ll bring in through donations. Plus, in the event of a setback, such as economic turbulence, you can likely hang on to the donors who are already committed to your cause.
• It supports a positive reputation: Your donors don’t just give your nonprofit money; they also give you a positive reputation. Each supporter has the power to enhance your outreach through word-of-mouth marketing. When it comes to marketing channels, recommendations from friends and family are the most trusted source, with 93% of consumers choosing word-of-mouth as one of their most trusted sources of information. This also applies to nonprofits since individuals looking for good causes to support are likely to ask their friends and family for advice.

Nonprofits often prioritize donor acquisition and not without good reason. By attaining new donors, the nonprofit can increase revenue, gain more attendees for events, and have more supporters out in the world spreading awareness of their cause.

However, don’t think of donor acquisition and retention as opposites. Nonprofits don’t have to focus exclusively on one over the other. Rather, the two supplement each other to grow your donor base overall.

Key Donor Retention Metrics

Along with donor retention rate, your nonprofit should keep an eye on a few other metrics to ensure you are maintaining your donor base.

In particular, let’s look at two key measurements: donor lifetime value and donor attrition rate.

• Donor Lifetime Value (DLV) calculates the projected total value of a donor’s contributions over their lifetime. It considers average gift size, donation frequency, and length of donor relationship. Nonprofits use this metric to identify high-value donors and determine when to request a donation upgrade.

DLV = Annual Donation Amount x Length of Relationship

• Donor Attrition Rate measures the number of donors lost within a specific period as a percentage of the total number of donors at the beginning of that period. To find your attrition rate, you must first determine how many donors were lost over the course of the measured period. If this calculation results in a negative number, you have actually gained donors. However, be conscious that just because growth outpaces attrition does not mean donors are not lapsing.

# of Donors Lost = # of donors from last year – # of donors from this year

Donor Attrition Rate = (# of donors lost / # of donors from last year) X 100

Incorporate these metrics into your fundraising goals. Beyond raising a certain amount, set specific objectives related to decreasing attrition or raising donors’ lifetime value. For instance, you might set a goal of hosting more annual engagement events to strengthen donor relationships and encourage a certain percentage of existing donors to give more.

9 Strategies to Increase Donor Retention

1. Provide more ways to give

Offer donors a choice for supporting your nonprofit. This makes it more convenient for donors to give and provides them with more agency in the decision-making process, increasing retention rates. Select a payment processor that allows donors to give via credit and debit card, ACH check, PayPal, Apple Pay, and other options.

Additionally, consider different ways supporters can contribute to your nonprofit outside of normal donations. Expanding your giving opportunities helps retain supporters who may be unable to make regular donations while also creating methods to increase support value for those who can give more.

For instance, you might discuss planned giving with older donors who have been with your nonprofit for several decades, or you can promote real estate and stock donations to high-value donors.

For the average donor, take time to educate them about matching gift opportunities. Matching gifts are a form of corporate philanthropy in which companies match their employee’s donations at a 1:1 ratio. This can increase each donor’s impact and propel your nonprofit to new fundraising heights.

2. Offer recurring gifts

Recurring giving options make it simple for donors to become long-term supporters. Donors agree to make these gifts automatically on a recurring basis, usually monthly.

If your organization doesn’t already, offer a recurring giving option on your donation form, so new supporters can easily opt into making multiple donations without going through the donation process each time.

Try using these strategies to encourage supporters to become recurring donors.

• Create suggested giving amounts. Encourage donors to choose a recurring gift rather than a one-time donation by creating suggested giving amounts for both options. Recurring giving options will be significantly lower than one-time amounts, subtly pushing donors towards recurring gifts. Consider how research on donor behavior found that when presented with multiple suggested giving amounts, the majority of individuals pick the second lowest option.

• Make opting in easy. The process for becoming a recurring donor should be as easy as possible. On your initial donation form, provide a checkbox or button that allows donors to join your recurring gift program in a single click.
• Provide perks. Recurring donors are your most reliable donors, and you can keep them around by showing your appreciation. Provide them with early access or discounted tickets to events, free merchandise, or even just a unique name for their group to make them feel special.

Not all donors will be interested in a recurring giving program right away, and that’s ok. Look for donors who have already given to your organization annually or on an irregular basis. Then, reach out to them with information about your recurring gifts program, including all of its perks.

3. Thank donors regularly

Not being acknowledged is one of the top reasons why donors churn. It’s not that donors are looking for a pat on the back. Rather, the lack of a thank-you message often causes donors to assume the causes they gave to don’t need their support.

Don’t let that happen! Instead, make an effort to show your appreciation, emphasize that each gift matters, and build relationships with your donors. You can do this through:

• Appreciation emails. Email is the quickest way to get in touch with your supporters after they give. Set up your communication tools to send a thank-you message right after a supporter gives. This confirms the donation was received and gets your appreciation across immediately.
• Mailed thank-you notes. Direct mail still has a place in nonprofit marketing, especially when it comes to your donor appreciation strategy. Send personalized cards and letters that donors will want to hold onto. Then, every time they see it, they’ll think of your nonprofit and potentially be motivated to give again.
• eCards. eCards combine the best of email and direct mail. eCards can be delivered electronically in seconds via email, text, or social media, and they also contain fun, eye-catching designs your supporters will want to save. Partner with an eCard platform that lets you create custom designs that represent your nonprofit.

• Thank-you videos. Record quick videos for supporters. These videos don’t need to be long—between 15 and 30 seconds should be more than enough time. Find a nice background, ensure your audio quality is clear, and record large batches of videos for loyal recurring supporters back-to-back.
• Phone calls. A one-on-one chat on the phone with a supporter can go a long way toward building a connection. Create a script volunteers can use when making these calls, and designate which donors you want to go this extra mile for.
• Donor walls. For your major recurring donors, you need to provide a lasting thank you. Donor walls are permanent physical constructions that express your nonprofit’s gratitude to a select number of donors.

Whatever method you use, be sure to thank donors promptly. Fundraising professionals advise that your first thank-you should be within 48 hours after a gift, usually through a text or email, and your second thank-you should be five to seven days after, often through slower forms of communication like mailed letters. Of course, there are exceptions to this, like donor walls.

 

 

4. Share impact stories

Donors want concrete details about how their gifts are furthering your cause. For instance, if your mission is to build wells to provide clean water for families in need, update donors on how many wells your team has built and how many families have clean water access because of your supporters’ generosity.

Keep your impact stories personal and tangible. Anecdotes you collect from beneficiaries are unlikely to be structured, emotionally resonating stories right off the bat. Use what they tell you to construct stories with meaningful details, a followable structure, and the right emotional response.

Then, check whether beneficiaries approve of the story you’ve written. Editing is a natural part of storytelling, but avoid inventing new details, conflating supporter stories, or otherwise misrepresenting your beneficiaries’ experiences.

In addition to the stories themselves, help donors visualize how their contributions are affecting positive change by adding:

• Beneficiary photos and quotes (with permission)
• Video evidence of your team’s progress
• Statistics showcasing impact

You can include these elements in your marketing materials such as weekly newsletters, social media posts, website pages, and blog posts. Doing so will prove to donors that your team is dedicated to goals, strengthening their trust in you.

5. Invite donors to get involved in your nonprofit outside of donating

Envision a supporter who donates to two nonprofits. Nonprofit A sends them regular requests for donations, thank-you messages for those donations, and little else. Nonprofit B also sends donation requests and thank-you letters but also highlights upcoming events, volunteer opportunities, how their advocacy campaigns are progressing, free workshops they’re hosting, and invitations to check out the latest news on their blog.

Which nonprofit do you think the average supporter has a better relationship with? Most donors will likely prefer organizations like nonprofit B that offer multiple ways to interact and learn more about their cause outside of donating.

In your messaging cadence with supporters, include invitations to explore other parts of your nonprofit. The more a supporter interacts with your organization, the stronger a connection they will feel, and the more likely they are to continue giving long-term.

6. Personalize communication

Your donors are individuals, and they’re more likely to stick with a nonprofit that treats them like they are. Of course, even small nonprofits still building their donor bases will find crafting unique messages for every supporter challenging.

Fortunately, there are a few personalization strategies any nonprofit with basic communication and marketing software can use:

• Greet the donor by their preferred name. Use your donor database to organize your supporters’ personal information. Then, when you create your thank-you emails or letters, you can pull the correct names and physical or email addresses automatically.
• Specify each contribution’s impact. Be specific about how you intend to use donors’ gifts and how they will make a difference for your cause. For example, a food bank might share how many families were fed, or a medical research foundation might emphasize how every bit of funding gets them closer to a cure.
• Include compelling visuals. Communicating impact through text alone can be challenging, so make your donor thank-you letters more meaningful with visuals. Add infographics and photos related to the specific campaigns they contributed to. For instance, if an animal shelter’s donor specifies they are a big dog lover, they should prioritize sending stories about and pictures of dogs they’ve recently helped and maybe cool down on the number of cats included.

One way you can make personalization easier is via segmentation. Divide your donors into groups based on shared characteristics that are relevant to your messaging strategy. For instance, you might make a segment for new donors who only started giving this year and one for recurring donors.

The new donors would then get messages that focus on introducing them to your nonprofit and thanking them for their choice to support you. In contrast, recurring supporters might receive messages emphasizing brand new opportunities or highlighting how much fun an event was last year, along with being reliable partners your nonprofit can count on.

7. Leverage self-service donor tools

Sometimes donors lapse not out of a desire to stop giving but because their credit card on file expired. Alternatively, they may have moved or changed email addresses. When these life events happen, donors may simply forget to update their information. Plus, if they have to contact someone at your nonprofit to resolve the issue, they may put it off and potentially forget to do so.

One way you can prevent this is by putting the control in donors’ hands. With self-service tools, donors can manage their contact information and recurring giving amounts. This saves your team time updating information manually and enables donors to feel like active agents in how and when they give.

8. Analyze donor data

Your nonprofit fundraising software should integrate with your constituent relationship manager (CRM) to track donor information. With this information, you can better refine your communication strategies, know the optimal time to ask for donation upgrades, identify matching gift-eligible donors, and spot donors at risk of lapsing.

The recapture rate for lapsed donors rests at just 4%, meaning your best strategy is to identify donors and intervene before they make their exit. A few signs to look for in your data include:

• Reduced engagement
• Decreased giving or have not given for several months
• Negative feedback

Use this data to find patterns among at-risk donors. Do they tend to lapse after taking certain actions? Do the donors have anything in common? Have similar re-engagement strategies worked for multiple at-risk donors?

Remember, when reaching out to donors at risk of lapsing, it’s not the time to ask for another donation. Instead, emphasize their importance to your cause and invite them to get involved again in other ways.

9. Ask for feedback

The people who can provide you with the best perspective on what it’s like being a donor for your nonprofit are your donors. Reach out to new and long-term donors alike to request their feedback about how you can improve the donor experience.

Send them short surveys and ask questions like:

• Why did you choose to support our mission?
• How did you first learn about our organization?
• Have you attended any of our recent events, and if so, how was your experience?
• Is there anything we can do to improve your overall experience?
• Are you satisfied with our communication cadence and depth?
• What areas of our mission would you like to know more about?

When your nonprofit surveys your existing donors, it indicates that you value their opinions and will make changes to serve them better. Even if you can’t implement every suggestion, you may get some direction for how to improve your programs.

Additional Resources for Improving Donor Retention

Keeping donors invested in your cause is essential to your nonprofit’s growth. Focus on implementing the strategies we shared to practice careful donor stewardship and engagement tactics. Remember to provide compelling updates and convey genuine appreciation, so you can establish your nonprofit as one that highly values its supporters.

To learn more about improving the donor journey, check out these resources:

• Donor Stewardship: How to Retain Support Effectively. Donors who have a relationship with your nonprofit are more likely to stick around. Discover how to forge connections that will last.
• 7 Key Steps for Championing Your Grateful Patient Program. Hospitals and healthcare organizations rely on retaining donors just like any other nonprofit organization. Learn how to turn grateful patients into lifelong donors.
• Matching Gift Auto-Submission + CSR Platforms: What to Know. The easier your matching gift process is, the more donors will participate. Check out the connection between auto-submission and CSR platforms to enhance your knowledge of this cutting-edge technology.