{"id":17683,"date":"2020-01-31T18:28:36","date_gmt":"2020-01-31T18:28:36","guid":{"rendered":"http:\/\/www.causevox.com\/?p=17683"},"modified":"2024-05-15T17:05:00","modified_gmt":"2024-05-15T17:05:00","slug":"donor-retention","status":"publish","type":"post","link":"https:\/\/www.causevox.com\/blog\/donor-retention\/","title":{"rendered":"Donor Retention: Statistics, Strategies, and Best Practices for Nonprofits"},"content":{"rendered":"\n

Fundraisers spend a lot of time and money recruiting new donors to their nonprofits and charities. At first glance, you can\u2019t deny that focusing some of your efforts on first-time donors is a great (and essential) strategy to bring fresh energy and new dollars to your cause.<\/p>\n\n\n\n

At the same time, it takes a lot of resources to recruit and the return is statistically quite low. In fact, it can take upwards of 2 or more years<\/a> to recoup typical donor acquisition costs.<\/p>\n\n\n\n

This is why the Fundraising Effectiveness Project (FEP), a joint project between the Association of Fundraising Professionals and the Urban Institute, is so helpful for development professionals. This annual report gives us a thorough look at current donor retention trends<\/a> to help us develop new strategies for retention and engagement.<\/p>\n\n\n\n

Not surprisingly, the 2015 FEP reported that 19% of first-time donors were retained by nonprofits, compared with 63% of repeat donors.<\/p>\n\n\n\n

What does this mean for your nonprofit? It suggests that your first priority should be retaining your current, active donors.<\/p>\n\n\n\n

Before we dive into calculating your rate, let\u2019s look at some donor retention basics.<\/p>\n\n\n\n

What Is Donor Retention?<\/h2>\n\n\n\n

Donor retention refers to the number (or percentage) of donors that return to give another gift in a specific time period. Most nonprofits and charities measure donor retention year over year.<\/p>\n\n\n\n

Why Is Donor Retention Important?<\/h2>\n\n\n\n

A high retention rate indicates that a nonprofit has a healthy support system. Here are some other reasons why donor retention is so important to nonprofits and charities.<\/p>\n\n\n\n

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  1. Donor Acquisition Costs Are High: Nonprofit professionals focus on donor retention because of the high initial cost of recruiting first-time donors. As mentioned above, it can take 18-24 months for nonprofits to recoup the amount of money they spend to attract a first-time donor, as most gifts are generally 2 to 3 times less than the marketing\/recruiting<\/a> cost.<\/li>\n\n\n\n
  2. Gain Access To Bigger Networks With People Fundraising: If you\u2019ve impressed your donor enough to warrant repeat donations, then there\u2019s a chance that donor may be recommending your cause to friends and family\u2014which is the basis of People Fundraising<\/a>. Thus, that relationship is leveraging additional donations.<\/li>\n\n\n\n
  3. Potential For Larger Gift Amounts: The 2015 FEP found a direct correlation between retention and gift size. Returning donors of gifts less than $100 were retained at 53% while retention was 76% for those gifting $250 or more. This could mean that as your nonprofit grows along with your donor, their gifts are likely to increase over time.<\/li>\n<\/ol>\n\n\n\n

    Now that you know more about donor retention, it\u2019s time to establish your retention baseline. If you haven\u2019t been tracking donor retention, then now is the perfect time to start. Follow these steps:<\/p>\n\n\n\n

    “If you haven\u2019t been tracking donor retention, then now is the perfect time to start.”<\/em> <\/i>tweet this<\/span><\/a><\/h3>\n\n\n\n

    Measuring Donor Retention<\/h2>\n\n\n\n

    1. Capture The Data<\/h3>\n\n\n\n

    It\u2019s impossible to calculate your retention rates without tracking your donors and gifts. While there are a number of ways to do this, remember that the decision to use one method over another is determined by your nonprofit\u2019s size and resources.<\/p>\n\n\n\n