Donor Retention

What Is Donor Retention?

Donor retention entails engaging existing donors so that they continue to give to the organization each year. By doing so, you have retained that donor. Retention efforts include encouraging a donor to give on a set schedule and interacting with them regularly so that they feel valued.

Why Is Improving Donor Retention Important?

Bringing clients and donors into the organization is only the first step to securing financial capital. A lot of time, energy, and resources goes into marketing and networking to turn connections into donations. The retention phase is important because retaining clients as donors year after year means these efforts aren’t wasted, and they continue to serve the organization for years to come.

In terms of your organization’s investment, it’s also easier and more affordable to keep current donors than it is to get new ones. 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.

There’s also a psychological benefit: Once someone has given to your organization, they’ve already made the decision to select you over other organizations. That means they’re more likely to stick around and donate again, saving you money to acquire new donations.

Organizations simply cannot grow at a sustainable rate without retaining customers. According to the Fundraising Effectiveness Project, donor retention rates have hovered around 45% for the last decade. For repeat donors (those who subsequently give again), that rate is around 60%. For first-time donors (given once but not twice), it’s around 20%. That’s why creating a process to move donors beyond a one-off donation is critical.

What Causes Donor Lapse?

When you fail to secure another donation from a donor in a certain period of time, that’s called donor lapse. There are a variety of reasons why your donors lapse. The most important factor is emotions. 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. There are a variety of donor retention strategies to ensure your donors stay happy.

Bottom Line

Donor retention ensures that nonprofits don’t waste the hard effort it took to bring new donors to the organization and that financial capital continues to come into the organization.