September 20, 2023
Nonprofit Technology & Fundraising Blog
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By Mallory Erickson
Nonprofit organizations across the world are struggling with donor retention, with the average retention rate hovering around 45%. Of course, donor retention benchmarks vary depending on many factors, including the type of nonprofit.
Retaining donors is essential to the longevity of any nonprofit organization because those returning funders represent stability. Contributors who routinely invest in your nonprofit are assisting you to build and maintain a sustainable organization.
Although every nonprofit will experience one-time donors, it is essential to always aim to retain certain groups of funders for the long haul. At one point, I was able to retain 80% of the people contributing to my nonprofit organization.
With years of experience, I was able to observe what worked and what didn’t when it came to encouraging funders to return for more contributions. Here, I have turned those observations into failproof strategies to help you retain as many donors as possible.
While there’s no one-size-fits-all retention strategy that encompasses all nonprofit business models, these techniques have been proven to make a huge impact across the sector:
When it comes to fundraising, it is essential for all nonprofits to closely monitor metrics to better understand what is working to retain donors. Even more, it is important to pay attention to what may be turning off donors and preventing them from being returning funders.
To lay the foundational benchmark for your retention goal, take a look at the rates of other nonprofit organizations in your field. If you can obtain the information, how many of their donors are they retaining from year to year? If they have a high retention rate, what strategies are they using that can inspire you? Note: You want to make sure that the organization has similar fundraising activities to your organization. For example, if you do walks/runs you might not have a high retention rate for donors being brought in from peer-to-peer campaigns but what’s your rate of retention for your key community members who are doing the peer-to-peer fundraising?
Many nonprofit organizations unintentionally fall into bad habits that result in a low donor retention rate. Things like failing to recognize their efforts or even keeping donors updated on their positive impact may make them lose interest in your particular organization.
If you are seeing that your donors often make one-time donations and then never return, that is cause to reconsider your fundraising workflow. Being willing to adapt and change with the times can be pivotal to your nonprofit organization’s success.
For example, more donors are connecting through social media and video these days than through letters in the mail. If your nonprofit is trying to communicate by snail mail only, you may be losing quite a few of your funders. Check out DonorPerfect’s Digital Fundraising Makeover for Nonprofits to ensure you are staying updated on today’s best practices!
Fundraising barriers can come in many shapes and sizes. For example, fundraisers who are uncomfortable having conversations where they ask for donations can be a barrier for your nonprofit organization.
In addition, failing to find donors who connect to the core values and cause of your nonprofit organization can also serve as a barrier. After all, it is the people who truly believe in your cause that will become repeat contributors. Alignment is everything.
Conduct routine surveys and dig deep to determine who your nonprofit organization’s target audience is. And then, offer your fundraisers, volunteers, and other stakeholders the essential support necessary to aid them in becoming valuable advocates for your nonprofit.
You have two friends. One friend ghosts you until they need something, and then they show up again asking for a favor. Your other friend tells you how much they appreciate you, checks in every so often, and only asks for a favor once in a while. Which friend are you more willing to help out and be there for? You’re probably more likely to assist the friend who seems to care about you, right?
One of the biggest mistakes nonprofit organizations make is failing to build aligned and genuine relationships with their donors. Many nonprofits receive the donations they ask for, give a quick “thanks,” and do not revisit that funder until they are ready for another donation.
This approach will leave donors feeling unappreciated and left in the dark. In addition, it will give your nonprofit the reputation of not caring about those that contribute to their cause. Building a lasting relationship with your funders and maintaining a positive rapport is the key to retention success.
Always aim to create a positive donation experience for your funders. This will give them the lasting memory of making a difference which will encourage them to return to make future donations.
That’s right! There’s science behind what encourages individuals to become repeat funders. According to the Greater Good Science Center, “In a 2006 study, Jorge Moll and colleagues at the National Institutes of Health found that when people give to charities, it activates regions of the brain associated with pleasure, social connection, and trust, creating a ‘warm glow’ effect.”
People enjoy the feeling of knowing they helped out and made a difference. In addition, they feel an even more heightened sense of positivity toward giving when they are recognized for their contributions. To retain donors, it is important for nonprofit organizations to ensure their funders feel appreciated.
In a study analyzed by the New York Times, it was discovered that “donors give more when they have a sense of belonging.” As such, making sure your donors feel included and a part of the team will make them more likely to return for future donations.
Operating a successful nonprofit organization requires the willingness to learn and quickly adapt. Sometimes you have to take a hard look at what hasn’t been working to make the right changes for a higher retention rate. The nonprofit organizations that fail to retain donors are the ones who stay stagnant in their ways, refusing to consider other avenues and workflows.
I’m dedicated to providing you with updated advice about fundraising and building a successful future for your nonprofit organization. Check out the What the Fundraising podcast series focused on donor retention!