Retaining new donors is a challenge for nonprofits striving to fulfill their missions. While acquiring donors is vital, nurturing strong relationships with them over time is equally – if not more – critical for long-term success. This article is full of tips and best practices to help you create a new donor retention strategy that works.
Typically, only 40 of every 100 donors will give to your nonprofit again next year. A 40% retention rate is not sustainable for many nonprofit organizations, but what can you do about it?
There isn’t a one-size-fits-all solution for new donor retention. Nonprofits must learn the best ways to cultivate and retain new donors and establish relationships based on their interests and passion for their mission.
In this article, we’ll discuss more about donor retention, how to measure it, and how to retain more new donors to grow your nonprofit.
Donor retention measures the number of donors who give more than once to your organization. High donor retention is critical for the financial sustainability of a nonprofit. After all, it’s easier to solicit someone who knows your organization and its mission than someone who doesn’t. So, why do so many nonprofits struggle to hold on to these donors?
Unfortunately, many nonprofits treat donors like an ATM. But the adage that fundraising is all about relationships is true. If you don’t take the time to build relationships and connect with donors personally, they will not continue to give.
Donor relationship-building requires a well-thought-out strategy that addresses each level of the donor cultivation cycle. Nonprofits willing to invest in effective donor management tools and form a moves management process for each donor type will develop a lasting and robust donor base.
New donor retention can be tricky since you have fewer details and connections to build upon, but a little research can help you define how each donor should be solicited and who should make the ask.
Donor management is especially essential to your research. As you develop a detailed communication plan for donors, your donor management system can play a key role in:
Retention metrics help organizations identify important KPIs, including donor retention rate, donor lifetime value, average gift frequency, and donor acquisition. Details like these provide a better understanding of how donor cultivation is working and what outreach efforts are seeing the greatest success.
If your new donor retention has decreased recently, a breakdown of how each donor was introduced to the organization may help identify critical areas of communication that must be addressed.
Pro tip: Run a report on last year’s fundraising events. How many first-time donors returned to each event the next year or gave again during the year? Determine which event is more likely to see a greater return of donors. After you learn these numbers, discuss how your donor solicitation differs from event to event and what may need to change.
Before developing a relationship with new donors, you must understand why they were initially interested in your organization and how they’ve reacted to additional communication. Segmenting donors in the following ways can help separate new donors from existing donors and reveal crucial insights:
Segmenting can also help with new donor retention by enabling you to better target each supporter with the right message – we’ll talk more about this later.
Donor management systems allow nonprofits to easily track first-time donors and provide storage and notification features to maintain consistent communication. Record all donor communication in donor profiles, noting details like inbound and outbound communications, communication channels, and more to keep everyone on the team in the loop.
With Donorbox Moments, nonprofits receive notifications when a donor performs a particular activity, such as making their first donation or changing their recurring donation plan in their Donor Portal!
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Monthly, quarterly, and annual retention reports are a must to monitor the effectiveness of your organization’s communication and donor solicitation. Periodic analysis can inform you when donor dollars increase or decrease, how many new donors you’ve received, and when.
If your nonprofit regularly runs these reports, you’ll also have a greater chance of learning which donors are in danger of leaving and can reach out with a personal email or phone call.
Pro tip: Use templates – like those provided by Donorbox – to make running new donor reports quick and easy.
Conducting a donor survey is a great way to connect with new donors and receive feedback. Plus, donors appreciate it when nonprofits communicate without asking for a donation.
Donor surveys can eliminate the guesswork, allowing you to extract critical feedback and get the answers to a few simple questions, such as:
Donors’ responses to these surveys can be priceless. Be sure to integrate this donor feedback into your fundraising and communications strategies, which will help you address any issues and concerns and build stronger donor relationships.
Donor communication is about more than soliciting donations. How you react when donors click on a social media post, open an email, or attend an event can do more to retain new donors than anything else.
Create and monitor strategic CARE points to track donors’ engagement. As you learn when and how donors respond to your communication efforts, you’ll have a better chance of responding in a way that addresses donors’ needs. Donor relationships and gifts will improve when your organization keeps its focus on the donor.
Learn more about CARE points and how to better engage your donors in this webinar.
Periodic analysis – mentioned above – allows nonprofits to address issues and potential donor losses immediately. Long-term analysis, on the other hand, provides an overview of retention trends.
Run and track donor reports to see how donors have responded to thank-you receipts and donor acknowledgments, newsletters, impact reports, and other communication tools over longer periods of time. Are your reactions to gifts and CARE points having the desired impact? If not, it’s time to develop a strategy to better transition new donors into loyal supporters.
New donors do not have years of knowledge or experience with your organization. If you don’t connect with these donors immediately, the chance of seeing a second donation is significantly low, especially with the number of competing charities. The following new donor retention tips can help your nonprofit develop a strategy to retain first-time supporters next year and beyond.
Want to turn more one-time donors into repeat supporters right from the start? Make it easy for them to set up and manage recurring donations online with just a few clicks. Although each gift may be smaller than a single donation, recurring giving can lead to larger total contributions in the long run and helps ensure reliable income for your organization.
Take a look at how Hydrating Humanity uses Donorbox to promote their monthly giving program through their online donation form. They share the impact each level of giving will have to show how long-term support can really make a difference. Plus, a Donor Portal is automatically set up for each new monthly donor so that they are empowered to manage their own recurring giving plan.
Proper acknowledgment can make all the difference between whether or not a donor gives to your organization again. While sending an automatic tax receipt after each online donation is important, this can’t be the last time new donors hear from you – you need to ensure each supporter feels appreciated.
Customized acknowledgments are a simple way to connect with new donors and increase the chance of receiving another gift. Nonprofits can send acknowledgment letters, postcards, or phone calls, each personalized with details about the gift that was made, the impact it will have, and more. An annual donor appreciation event is an excellent way to meet with donors face-to-face and strengthen the relationship.
Regardless of how you reach out to thank new donors, the time will be well spent.
Donorbox enables you to customize the tax-compliant donation receipts sent to your donors, allowing you to include a thank-you message, images, videos, and more.
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Long-term engagement relies on creating a compelling path for the donor. Don’t just focus on getting the gift itself – develop a full-fledged donor journey that starts with donors learning about your mission, moves through them completing the actual donation, and continues with acknowledgment and ongoing cultivation.
Your process might involve using an effective acquisition tool with prospective donors, cultivating donors with inbound and outbound communications, sending authentic and personalized acknowledgments, and sharing impact through regular updates. Understanding that each stage of the journey has equal importance will help you establish those critical relationships.
Donors need to feel that their gifts are having a real impact to give again. Your organization can provide this by sharing infographics via social media, email messages, or traditional annual reports.
Nonprofits can also offer immediate updates during peer-to-peer and matching gift campaigns. Matching gifts from foundations, major donors, or sponsors can give your organization the chance to educate and excite donors about their impact.
Be sure to keep donors informed about how much your matching gift campaign has raised and how close you are to meeting the challenge. After receiving the gift, post your thanks to the major donor and all supporters who helped you reach your goal.
Facts and figures are essential when conveying a donor’s impact, but stories that share personal accounts have a greater response rate. Donors are certainly more inclined to give when they feel a true connection!
Personal stories from beneficiaries or donor testimonials are the best way to facilitate this connection. Adding an emotive image or video of the beneficiary is even better!
Segmenting donors, as mentioned above, is critical to better understanding them as well as reaching them through the best channel with a message that will resonate.
For example, donors who have shown interest in a specific program, whether by donating to it in the past or engaging in program-specific content, may respond best to an appeal with a story about that program. Or, you might target individuals in a certain location if your program serves their neighbors because many donors are often interested in helping their own community.
You can also use a question field on your donation form to ask about how donors prefer to be contacted, any programs they are interested in, how they heard about you, and more, helping you further refine your segments.
Developing targeted outreach boosts new donor retention by showing you pay attention and ensuring a donor feels personally connected to your organization and those you serve.
New donors who sign up to give recurring donations or become members expect exclusive and exciting content and opportunities. Many nonprofits will send monthly newsletters or regular communication with facts about the donors’ impact and stories from individuals affected by their gifts.
Exclusive events and VIP treatment can also be a perk for members. Donors often appreciate these membership benefits enough to continue long-term support, further boosting your new donor retention rates.
While surveys and polls can be effective ways to collect donor feedback, you should also meet with donors in person or through phone calls. Discuss their observations on programs and donor outreach methods, making it clear that their input matters to you.
These conversations can tell you a lot about how donors are feeling and help you form stronger relationships with them, leading to better new donor retention.
Pro tip: Remember to thank donors for their time and input after phone calls and in-person meetings.
You must take a donor-first approach when communicating with supporters. Donors want to know how their gifts make a difference in the lives of real people, places, or animals – they don’t necessarily care about helping your organization reach its goals.
Through donor-centric fundraising, find ways to tell beneficiary stories with donors as the primary characters while consistently thanking and communicating with them. Whenever possible, use “you” more than “we,” and make sure the donors know they are the ones helping others – not your nonprofit.
The Fundraising Effective Project says new donor retention is down 14.8%, and repeat donor retention is down 5.4%. This article’s tips and best practices can help nonprofit organizations implement effective donor retention strategies and cultivate lasting relationships with supporters.
Are you looking for ways to automate your donor communications so that you can focus on serving your mission? Check out Donorbox’s donor management system and other fundraising features, like Moments, Donor Portal, and customized giving forms, that help nurture new donor relationships.
Plus, check out the rest of the Nonprofit Blog and sign up to receive fundraising and management tips and resources in your inbox.
Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.
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Kristine Ensor