Improving Donor Retention – Why It’s Important and 3 Ways to Fix It
Why do donors stop giving? If you want your organization to last, you need to know the answer to improving donor retention.
Of course, the solution may vary from organization to organization. But one thing is certain: improving donor retention is the most pressing challenge facing nonprofits today.
Thankfully there are a number of strategies to maintain relationships with donors and keep them active supporters of your cause. But first, let’s examine why donor retention is so vital and why nonprofits are struggling to address this issue.
Why is improving donor retention so important?
There’s an undeniable truth that the most successful organizations have always followed: it’s easier – and cheaper – to keep current customers (or donors) than it is to get new ones.
This age-old idea of customer retention is built on a deceptively simple principle: acquiring new customers is expensive and difficult, because they need to be convinced to commit to your cause.
In contrast, once someone has taken the leap and given to your organization, they’ve selected you over other options, and they’re more likely to stick around and donate again.
Additionally, many nonprofits actually lose money or just break even when they initially acquire a new donor. With overhead of website creation and paying your staff’s payroll, It’s not until that donor contributes several times that the organization has actually seen a return on their investment from acquiring that donor.
In a nutshell, this is why improving donor retention is so important. Organizations simply cannot grow at a sustainable rate without retaining customers.
As evidence, just consider that in 2015 the Association of Fundraising Professionals found 63% of repeat donors are retained (subsequently give again) compared to only 19% of first-time donors.
Creating a process to move donors beyond a one-off contribution is critical.
3 things you can do to keep donors
Churn, or the loss of customers, happens in every industry and to every business. But what are the causes? That question can yield a myriad of answers, but most reasons can be classified in 2 ways:
- The product or service doesn’t solve the problem the customer thought it would
- The customer doesn’t feel strongly connected to the organization
For the purpose of nonprofits, the second reason is the most important.
People rely on their emotions to make decisions, both personally and professionally. So the secret to increasing donor retention is to make sure your donors are happy. That means you need to create a plan that makes them feel emotionally invested in your organization rather than just financially invested.
Here are 3 ways to accomplish that goal and improve donor retention.
1. Create an outstanding welcome experience
You can’t redo a first impression. So after a new donor makes their first contribution, you need to roll out the red carpet.
In practical terms that can mean sending a welcome email series to introduce them to your nonprofit’s goals and operations.
In addition, you also need to ensure that your welcome message (whatever medium it’s delivered in) emphasizes the importance of the gift you received from the donor.
Think about it: when someone contributes to your organization, they’re in the best possible state of mind regarding your cause. You need to reinforce this feeling by validating the effect of their contribution.
Never assume donors know how their contributions will be spent. Be specific about why they’re making a difference. Show them how you’ll use their gift to further your cause. If you can nail the welcome experience and create an emotional connection, you can significantly increase your chances of retaining donors.
2. Invest in ongoing education and engagement
Once someone donates, it can be easy to forget about them until it’s time to start fundraising again. But by that time, they’ve already forgotten about your nonprofit, and aren’t likely to be inspired again.
The core principle of establishing a relationship with your customers is consistency. Especially consistency in your communication. Luckily, there are multiple ways to reach your donors online.
Social media is probably the first idea that comes to mind. While it’s important to maintain an active presence on social, building a strong email list will benefit you the most in the long run.
Email is still the best form of communication and marketing. You can easily launch a weekly email newsletter that keeps people informed about what’s going on with your organization, and why it matters to them.
The most important aspect of this donor retention strategy isn’t the fact that you’re emailing people every week. It’s the value of what you’re sending that matters.
An effective engagement strategy will tell your organization’s story through updates and content. Photos of your team hard at work in the office. Videos thanking donors and celebrating a new milestone. Blog posts about what your organization is doing in the field are all pieces of content that can create a personal connection between you and your supporters.
In this way, you can tell the day-to-day story of your organization and remind donors of the feeling they had when they first contributed to your cause. A compelling nonprofit email will boost engagement.
3. Be systematic about following up with unengaged donors
Using email also provides another important benefit: a reliable data source to measure the engagement of your donors.
If you send a weekly or bi-weekly newsletter, you can see open and click-through rates, indicating how often people interact with your brand. When someone doesn’t interact with your brand for a while, it can be an early indicator that they’re losing interest. There are a number of ways to respond to this indifference, but some type of personalized outreach, like an invitation to a donor lunch, is usually a good first step.
Of course, you don’t want to overreact if someone didn’t open your last 2 emails. But when a donor starts disengaging over the course of several months, it can be a telling sign that you need to work on your relationship.
A system for improving donor retention
In the longterm, you should develop a system to spot disengaged donors. Email is the most straightforward method, but you have other options available. However, you choose to proceed, having a system in place to proactively address donors who are at risk of churning can be an invaluable tool.
More broadly, putting all 3 of these strategies into practice will help you improve donor retention, and grow your nonprofit.