This two-part series will share the key elements to overall donor relations: finding and keeping your donors. Before we talk about finding new donors, you need to make sure you are keeping the ones you have. Don’t put more water into a leaky bucket!
Donor retention statistics over the last 20 years paint a sobering picture: Fewer and fewer donors remain active. Retention has gotten more challenging as giving has fundamentally changed. On one hand, giving is easier than ever. One click of a “donate now” button is far simpler than writing and mailing a check. On the other hand, donors have changed. They’re more informed and more discerning. They don’t give like their parents; they need to be truly inspired.
More money is given year after year by fewer people. Large gifts can often obscure the truth about the health of giving overall, which is that 80% of first-time donors will likely not give again. It’s understandable why donor retention is one of the greatest concerns for nonprofits.
As it can cost five times more to acquire new donors as opposed to renewing them, keeping the donors you have is much more cost efficient. In addition, because major donors often start as small first-time givers, retention of these donors has a positive ripple effect over the years. Studies show that improving your retention rates by only a few percentage points can increase fundraising revenue by 30-50% over time.
If you want to increase donor retention rates, your organization should master the basics of donor relations by creating an effective donor retention plan and implementing it in a disciplined way.
Establish and Track Key Donor Retention Metrics
In order to improve donor retention, first you need to know your numbers. Creating a retention dashboard can help you understand where you are, define where you want to be, and track your progress between those two points.
Consider tracking the following retention metrics:
- Overall retention rate
- First, second, and third-year retention (these groups behave differently!)
- Number of new donors
- Retention by segment (broad based donors, middle donors)
- Average gift size
- Number of in monthly donors
- Number of donors that move up to middle or major givers
- Number of personally thanked donors, in addition to thank you letter within 72 hours of receiving gifts (this can be a call from staff, board, or other key volunteer)
Anyone with responsibility for donor retention should have access to and understand these metrics. It’s wise to tailor your dashboard for your key audiences: your executive director, development director, annual fund manager, and board (if they see this level of detail). For example, a high-level, interactive online dashboard may be more appropriate for an executive director or a board member. Detailed, data-rich reports may be better for the annual fund manager and anyone responsible for doing the day-to-day retention work.
Get to Know Your Donors
Donor retention is about more than paying attention to a collection of metrics on a dashboard. Don’t forget, these are people, not simply numbers on a report. And people don’t think of themselves as “acquired or retained donors.” They are mothers, sports fans, introverts, extroverts, animal lovers, and so on.
Use Prospect Research Tools
You are likely familiar with tools like DonorSearch, iWave, ResearchPoint, or Boodle. These applications can help you learn more about your donors. What are their interests? Do they have children? What other organizations do they support? How do they lean politically? The more you know your donors, the better you can be at communicating with them and that will lead to improved retention.
Give Your Donors a Voice
One of the easiest and most cost effective ways to better understand your donors is to listen to them via surveys. When you conduct focused donor surveys, you gain understanding of their motivations — and their satisfaction with giving to your organization. These need not be long (in fact, they shouldn’t be!). Consider a few basic questions that you ask all the time:
- What inspired you to give to us?
- I feel my gift has made a difference (score 1 to 10)
- How does our nonprofit rank in your giving priorities? (scale 1 to 10)
- I am a committed donor to your organization (score 1 to 10)
In addition to providing meaningful and actionable information, people who take the time to answer your survey are demonstrating their affinity. They care enough to give you feedback and sometimes even advice.
Adopt a Customer Service Mindset
A customer service mindset means that everyone on your team should be willing and able to field a donor phone call. But don’t stop there. Ensure that somebody on your team makes sure you follow through.
Designating an individual responsible for attending to donor questions and concerns guarantees you stay on top of donor communication. A message taken and given; a question asked and answered; a request made and granted — these are things that can sustain the relationship between you and your donors.
Use first-party (your data) and third-party data to inform how you segment appeals and communications. With that data, you can create a matrix that shows which communication will go to which donor category, who will send it, and when.
Your communications matrix can help you be thoughtful about the content you share with donors. Not everyone will be inspired by the same appeal. What works well for someone who has kids may not work well for a person who doesn’t. What works well for someone politically right-leaning may not work for someone left-leaning. Your message can — and should— be customized to your donor audience.
The same is true for recognition of donors. Depending on the situation, a welcome packet or a warm, personalized email may be more suitable than even a personal phone call might be.
Keep Your Donor Data Clean and Current
Improving donor retention requires good data hygiene. You can’t communicate with someone if you have an old address or the wrong email. Bad data will lead to bad feelings: sending the same piece of mail to someone two or three times, sending an appeal to someone’s deceased spouse, soliciting someone who asked not to be solicited, using the married name of someone who is now divorced. You get the picture.
In addition to using third-party vendors and applications that can update addresses and emails, there is also internal work to do. Create a data hygiene dashboard to surface anomalies. Appoint a data hygiene Czar(ina) to take ownership of resolving anomalies and keeping the data as clean as possible.
Collaborate, Evaluate, Learn, and Improve
There are a lot of good ideas when it comes to improving donor retention. We’ve shared a few in this article but good ideas are only as good as the execution and follow-through. The secret to good follow through is discipline and good old-fashioned project management.
Improving your donor retention is possible with a simple, disciplined system. Once you know what success looks like (the metrics on your dashboard), establish regular, quick check-ins (not less frequently than monthly) where you ask the following questions:
- How are we doing on what we said we wanted to accomplish? Are we on track or off-track?
- What’s working? What’s not?
- What issues have we identified?
- How should we adjust?
And then quarterly, take a deep dive and ask:
- What do we want to accomplish in the next 90 days?
- What issues have we identified that we need to address?
- What have we learned that might affect our plan?
No matter how big or small your nonprofit is or how limited your organizational resources might be, you can make meaningful improvement in donor retention. It simply takes time and devoted effort. Like a planted seed, your retention rates can grow with careful and consistent care.