The State of Nonprofit Donor Retention (And What To Do About It)
As a general rule, retaining existing donors costs less than acquiring new ones. Current donors are a curated universe who have already demonstrated a belief in your organization’s mission, and willingness to take action toward it. As such, for most nonprofit organizations, pursuing strategies to reducing donor losses is the most affordable strategy for increasing net fundraising gains.
Unfortunately, across the nonprofit sector, donor retention rates are low and getting worse. According to the 2018 Fundraising Effectiveness Survey Report, the average donor retention rate was 45.5% in 2017, slightly lower than the rates in 2014–2016. Less than half of all donors return to nonprofits each year, leaving organizations in a perpetual scramble to attract dwindling numbers of new donors. The chart below illustrates the fluctuations in average donor retention over time:
Nonprofits continue to lose donors at an alarming rate, catching them in a losing cycle of constantly spending time and money on costly donor acquisition, only to lose most of that investment. Although low donor retention is endemic across the nonprofit sector, individual organizations can and must take steps to distance themselves from the crowd.
What should nonprofits do to rise above the retention slump?
- Track your retention rates. A shocking amount of nonprofit Development departments couldn’t tell you what their current donor retention rate for the year is. Staying updated on the status of your program’s retention is the first step to improving it.
- Start with a donor stewardship program. Building donors’ loyalty to your organization means engaging them in a variety of ways outside of fundraising asks. The time that you spend on donor stewardship pays off with donors that stay with your organization for the long run.
- Automate recapture and renewal efforts. Don’t leave it up to already-busy staff to remember when recapture and renewal outreach should start. By automating the process, you’ll save staff time and create a more timely and seamless experience for your donors.