3 Ways to Increase Your Donor Retention Rates

Non-profit organizations face stagnate or shrinking pools of potential donors with increasing competition from other non-profits. Rates for retaining first time donors, and even recurring donors, continue to be low across non-profits, with the majority of organizations only retaining approximately 40%. The Urban Institute has done extensive research in this area with several effective charts.

When looking at the financial implications, not only is the cost of acquiring new donors greater than the cost to retain current donors, but also, research indicates donor retention has a compounding effect on your organization’s fundraising. As noted in a 2013 article from the Non-Profit Quarterly , research indicates that increasing retention by 10% can increase the lifetime value of your donor database by 200%. Donor retention is also critical to weathering economic downturns and other major events where you need to be able to rely on a stable income base.

The good news is that you can take some easy steps to improve your organization’s retention rate. It starts with thinking about giving as being rooted in relationships. Your approach to retention should be considered through the lens of building and strengthening relationships.

Increase your rates and improve your donor relationships

The first, and perhaps easiest, step after thanking your donors in a timely manner is to thank them again and again. Pay attention to how they like to be communicated with and honor that preference. Expressions of gratitude matter. One increasingly popular trend is to host a “thank-a-thon” around Thanksgiving. Staff members break up donor lists and call every single donor with one message–“we are grateful for your support.” No solicitations are made and no donor is left off the list.

Another effective step is to let donors know about the impact of their donations. Don’t just tell impact stories when soliciting for support or filling content in a newsletter or on a website. Communicate with donors like they are stakeholders in the work your organization is doing. Be specific to the donor about the impact and value of his gift as well as key programmatic efforts you are undertaking. Provide them organizational and social context for their giving.

And finally, for the relationship to truly work, communication needs to happen in both directions. Connect with your donors. Ask them questions. Why did they give to you? What has their experience interacting with your organization been like? Do they want to get involved in with your organization in other, non-financial, ways? The caveat to seeking information and input from your donors is that you need to be prepared to act on that input. Follow through is essential.