Data & Donor Retention: The Perfect Combo for a Thriving Nonprofit

KindfulJune 21, 2016

Data & Donor Retention: The Perfect Combo for a Thriving Nonprofit header image

How much time do you spend everyday thinking about how to cultivate new donors? How much time do you spend dreaming up new fundraising campaigns or planning events geared directly to new audiences? Is it a few hours every day? Half your day? Even your whole day?

Believe it or not, there’s a better way to achieve nonprofit fundraising success – and it’s actually easier and more sustainable than looking for new donors! Say hello to donor retention. Donor retention is simply the act of securing donors who will give continuously to your organization on a regular basis. When you start shifting your focus away from donor acquisition and towards donor retention, the sustainability of your organization inevitably increases for a few key reasons:

You can stop spinning your wheels, always looking to score more new donors and larger major gifts.
You can think long-term, as you have a better idea of what donations will be coming in on a regular basis. Most importantly, you can focus, not on the simple transaction of an online donation, but on the person at the other end of that gift. You can starting building relationships with your donors, inviting them deeper into the story of your nonprofit and nurturing them to be a lifelong partner in your work.

But how do you go about the business of building a thriving nonprofit through targeted donor retention? Of course, the first step is to get people in the habit of giving on a regular basis. But the second (equally important!) step is to measure your donor retention strategies so you can track what works and always be tweaking your strategy for maximum success. Let’s break it down:

Step 1: Donor Retention 101

Donor retention is simply about nurturing the relationship with a first-time donor so that they feel motivated to continue giving. Some of the best methods include appreciation, education, and communication.

First, always, always, always say thank you! You can do this with gifts and rewards, but sometimes it’s the most personal methods that speak best. A simple handwritten note or 5-minute phone call to express gratitude is a great way to open the line of communication for future donor engagement.

Second, make sure your donors stay educated on current events tied to your work. Your donors got involved because they saw how your nonprofit could accomplish real good in the real world. You can keep that fire alive by communicating ways in which your mission stays relevant and your work is needed everyday. Keeping donors updated can be as easy as sending out periodic news alerts via email, creating a current events section on your website, or even cultivating your Twitter account to share breaking news related to your cause.

Last but not least, make sure to keep your donors in the loop. If you have a new campaign, don’t overlook them when it’s time to ask for donations. Are you starting a sister organization in another county? Let them know how their history of giving has contributed to your growing presence in the region. By keeping donors informed, you show real-life examples of how their continued support strengthens your continued work.

Step 2: Measuring for Maximum Impact

Discovering your donor retention methods are only half the battle. Because, how will you know what’s working if you’re not tracking it? The good news is that clean data makes everything easier.

First, get all your donor retention processes set up and tracking in your donor database. Train your development officers to enter the right data in the right places. Create templated reports that will show you how many donors are responding to various retention methods (and with a nonprofit CRM like Kindful, schedule these reports to be sent to you automatically). Just remember – clean data equals happy data…data that will always tell you what you need to know!

Second, apply some simple equations to your data. You may not have used math since high school, but believe us, these formulas (when applied to clean data!) will make measuring your donor retention success easy.

To measure your yearly donor retention rate:

[# of donors you had last year] divided by [# of donors who gave a second gift this year]
Helpful Hint: Nobody has a perfect score, so don’t get discouraged if you’re not at 100-percent right away. Anything above 50% is nothing to scoff at…and if you can make it to 70% you’re a certified winner!

To measure first-time donor retention rate:

[# of first-time donors] divided by [# of those donors who donate again]

To measure recurring donor retention rate:

[# of donors who have donated 2 or more times] divided by [# of those who continue to give]

To measure the average gift amount of your donors:

[# of total annual gifts] divided by [# of annual donors]
Helpful Hint: Work this equation for the past three years and compare.

Pretty simple right? With just a few methods tested and tracked over time, you can increase your donor retention and the overall sustainability of your organization.

Looking for a way to retain donors through strategic email cultivation? Check out our free guide!

Schedule a live demo with our partner Bloomerang, and we’ll show you how easy it is to create and automate reports, utilize online and offline fundraising tools, quickly integrate and access all your data, and ultimately create more time to engage your donors.

Filed Under:   Donor Management