What is donor retention?
Donor retention measures how well and how long nonprofits maintain relationships with their supporters. Most fundraising leaders consider this metric crucial to organizational longevity, and we’ll help you understand exactly why that is.
Acquiring a new donor is no small feat, but the effort is worth it when that donor continues to give again. Donor retention showcases a strong rate of return supporters compared to those who only give once.
While technically, donor retention means seeing repeat gifts, forward-looking nonprofits see even more potential. Donor relationships that last beyond a single donation can also grow to support volunteer work, event attendance, advocacy, and widespread campaign involvement.
Why is donor retention important?
In recent years, donor retention has become a necessity for many nonprofits. Donors have more choices about where to spread their generosity, and online fundraising capabilities broke down geographic barriers between supporters and organizations.
Your ability to secure a donor and watch that individual continue to take action year after year is a crucial element of a sound fundraising strategy. Below, we’ll explain a few reasons why.
Cost efficiency
Retaining a donor who has already contributed to your nonprofit's mission is typically less expensive (and easier) than acquiring a new one. A donor acquisition plan can involve a lot of marketing costs, so giving lulls can help to lean on donor retention instead.
Investing time to nurture relationships within your existing donor network can also continue to maximize the acquisition costs you've already incurred. Your return on investment only grows with each year you can keep an individual donating to your cause.
Long-term relationships
An essential component of donor retention is the experience you offer an individual and how involved they feel with your cause. Many people give passively or once to support a timely need.
The donors who get involved on a deeper level and become loyal to a single organization, or cause have strong relationships that pull them to do so. Nonprofits who keep in touch with thoughtful email updates and show they care about their supporters can see more of them stick around.
Sustainable funding
A robust donor retention strategy will include opportunities like membership programs and recurring donations. That's because these reliable fundraising methods help nonprofits predict income each year.
Retaining your donors' loyalty with meaningful relationship-building that helps them feel their value only entices them to stay involved. Pair that with regular invitations to get involved throughout the year, and you build sustainable funding to weather any storm.
Advocacy and support
A donor who's been involved with a nonprofit for a few years is far more likely to share their experience with friends, family, and co-workers. That level of advocacy can open new potential for donor acquisition, peer-to-peer fundraising, and corporate giving opportunities.
Advocating for your cause can also be an alternative to financial commitments for donors who want to continue to show support in hard times. Tapping into your loyal community for testimonials, outreach, and social media interactions can also help you attract new, like-minded supporters.
The current state of donor retention
Donor retention is more important than ever. Overall giving levels have been stagnant at best as the economy fluctuated, and individual income levels felt the impact.
Nonprofits who can keep their supporters engaged through uncertain times are in the best position to reach their fundraising goals.
Donor retention statistics
Luckily, new reports show that giving increases are ahead for 2024 and 2025. Donor retention will undoubtedly remain a part of a secure fundraising strategy.
- The Fundraising Effectiveness Project found that donor declines and retention continued challenging nonprofits throughout 2023.
- A OneCause 2024 outlook report found that only half of nonprofits surveyed met 2023 budget goals, and 81% noted donor retention as a top challenge.
- The Lilly School of Philanthropy's 2024-2025 outlook report predicts that giving levels will increase by 4.2% in 2024 and another 3.9% in 2025.
How to calculate donor retention rate
Understanding how to calculate donor retention rate will indicate where you are today and how things evolve. You can calculate donor retention over any period that helps your nonprofit measure growth and effectiveness.
- Donor retention rate formula: [(Current # of donors- # of donors acquired over a specific period)/ # of donors at the start of a specific period]/100
- Monthly donor retention rate: [(# of donors at the end of the month- # of donors acquired during the month)/ # of donors at the start of the month]/100
- Quarterly donor retention rate: [(# of donors at the end of the quarter- # of donors acquired during the quarter)/ # of donors at the start of the quarter]/100
- Annual donor retention rate: [(# of donors at the end of the year- # of donors acquired during the year)/ # of donors at the start of the year]/100
Why does your donor retention rate matter?
Your retention rate showcases the relationships you can form and how likely donors are to stay loyal to your cause. This universal metric can help you benchmark against the social sector averages and your goals.
The average donor retention rate for nonprofits remains steady between 40 and 45%. Once you know where you stand, you can set specific goals for your donor retention efforts.
What causes donor lapse?
A lapsed donor is a supporter who stops giving. It's a natural part of running a nonprofit as people's lives and priorities change. While there are certain reasons you can’t control, there are many you can with a strong donor retention strategy.
Donor lapse can happen because of:
- Financial changes and inability to give
- Reprioritizing donations for other causes or nonprofits
- Lack of communication or relationship with an org
- Lack of updates about how donation money is being used
- Mistrust or reputation damage to the organization
- Lack of acknowledgment and appreciation
- A negative donor experience
- Health shifts that change lifestyle priorities
- A shift in age and generational donation habits
Donor retention can prevent lapse from being a norm for individuals who want to stay involved. Next, we'll talk about the specific strategies your nonprofit can implement to build relationships that make people want to stay.
9 strategies to increase donor retention
1. Gain clarity about what makes a loyal donor
In the same way you think about ideal donors to inform donor acquisition efforts, successful retention starts with some clarity. The good news is you already have a leg up with far more information about your current donors than new ones.
It’s helpful to start by tapping into your donor management system to create specific segments of supporters to engage. This will give you the best chance of inviting them to take action again.
A few donor segment ideas to start organizing within your supporter community and build specific outreach around include:
- First-time donors: Anyone who's just given their first donation to your organization
- Recurring donors: Anyone who's signed up to give on a scheduled basis for a certain time (monthly, annually, etc.)
- Major donors: Anyone who's given over a certain dollar amount that far exceeds your average gift size
- Event participants: Anyone who's attended an event you've held
- Volunteers: Anyone who gave their time and skills to support your mission without pay
- Corporate donors: Any business or organization who's donated to your cause or sponsored an event
- Generational donors: Anyone that falls within a specific age group, helping you identify lifestyle priorities and giving patterns
- Mobile donors: Anyone who's given through a mobile device
Dividing donors into segments will help you tailor your communications and engagement strategies to match each donor segment's giving characteristics and communication preferences.
2. Make each donor feel personally seen
Your supporters take their contributions personally. Maybe they have a connection to your cause or have chosen your nonprofit for a particular reason. Whatever the reason, it’s important for you to tailor communications to individual donors by acknowledging their past contributions, expressing gratitude for their ongoing support, and sharing personal stories.
People return to give when they feel valued as individuals instead of just another wallet. It's easy for people to pick up on mass email communications or generic messaging.
You can approach each donor segment more meaningfully as you gather key information about what makes them unique.
Personalization might look like:
- Adding the donor's name
- Referencing the donor's last interaction with your organization
- Speaking directly to the stage of life the donor may be in
- Noting the impact of the donation type the donor last gave
While tools like ChatGPT can be helpful to save time on your emails and social media captions, be sure to plug in these small details that go a long way in how a donor will receive your message.
3. Establish consistent stewardship programs
You'll want to establish a rhythm as you know who you're contacting with highly personal communications. Without consistency and cadence, messages and updates can feel haphazard and unintentional.
That's where your stewardship program can help. A strong communication strategy is used to plan when and what you will say to your donors. Regularly communicating with donors through email, newsletters, social media updates, and personalized messages will help keep them engaged in your nonprofit’s cause.
Here are a few questions your program should answer:
- How many donor segments will you create retention strategies around?
- What are the specific segments to build into your program?
- How often will you reach out?
- What content is most relevant to each segment?
- How far between should updates and outreach be sent out?
- What channels will you use to share updates and include various touchpoints?
-> Dive into everything you need to know for strong donor engagement.
4. Engage donors at events
Fundraising events can help you improve your donor relationships by introducing your cause, team, beneficiaries, and loyal supporters to your donors. Consider building events into your retention strategy as a great call to action for anyone looking to get more involved.
Events can also be geared specifically toward retention. For example, you can host a donor gala or annual fun gathering to bring your supporters together in one place as a thoughtful gesture of gratitude.
5. Don’t be afraid to ask for another donation
The earlier stages of your stewardship program might involve warming up to donors and gauging their interest in continued involvement. As you create a regular communication cadence, don't hesitate to include a relevant opportunity to give.
It can feel strange to ask for more from someone generous in the past, but this is how you can build awareness of your campaigns and increase retention. As long as your ask is relevant to the donors you're talking to, you always want to give a clear way to grow the relationship.
6. Make it easy to continue giving
Every piece of communication should focus on building a genuine, long-term relationship with your donors. Yes, you can include call-to-actions asking them to contribute but try not to make fundraising the central message of every communication your donors get.
One of the easiest ways to turn a first-time, one-time, or lapsed donor into a loyal supporter is to offer a membership or recurring gift option. Sometimes, people look for the easiest way to give back that won't require them to keep checking emails and looking for new campaigns.
An established program that helps your donors set up a monthly contribution at a cost they can afford is a great way to generate sustainable income. People feel involved even when they can only commit to a smaller amount of time and money, and they always have the choice to increase their impact over time.
<H3>7. Recognize loyalty and repeat donations
We can’t say this enough: it is ridiculously important to acknowledge each donation with a thank-you note or email. Knowing what you're doing matters and that you are appreciated can be a huge motivator to repeat an action.
In addition to an automated thank you letter after a donation, take the time to show donors that their support is essential to your mission. Depending on the size of your nonprofit, you can send a handwritten note, make a personal phone call, or offer a special perk (tickets to your next event, dinner with your founders, etc.).
And, if they’re okay with it, sharing donor stories through well-timed newsletters, annual reports, and events is an excellent way to keep donors connected and engaged.
Here are a few ideas to get creative about:
- Host a donor appreciation event
- Showcase loyal donors on your social media and website
- Celebrate milestones like months of consistent giving, years of consistent giving, and the number of campaigns supported
- Surprise repeat donors with an annual holiday gift to honor their commitment
8. Track your success
From reports on how donor contributions are being used to which communications get the most clicks or inspire the most donations to which fundraising events engage the most donors (existing and new)—it’s essential to include measurable outcomes in your donor retention plan.
In addition to the donor retention rate, the following metrics can fully capture what's working well and where you may focus your attention each month.
- Donor lifetime value: An estimated value that an individual's contributions have on your organization
- Average donation amount: The average gift size you receive over a specific period
- Donation frequency: The average number of donations you receive over a particular period
- Donor engagement: Qualitative measures such as email open rates, event attendance, social media interactions
- Top engagement channels: The places you find the largest response or interactions with your donors (email, Instagram, TikTok, Facebook, LinkedIn, etc.)
By continuously monitoring your donor retention rates and analyzing the factors that contribute to donors' engagement, lapsing, or re-engagement, you’ll be able to refine your donor retention strategies.
9. Enhance insights with donor feedback
You can also go straight to the source and ask your loyal donors what keeps them returning to support you. Feedback can be uncomfortable to hear, but that doesn’t make it less necessary to seek out.
Some donors will give it freely, others will happily provide it if asked, and some may not give feedback. Either way, it is worth asking, and it doesn’t have to be complicated.
Ideas to collect donor feedback and inform your retention strategies:
- Include a comments section on your nonprofit website
- Ask for feedback in the footer of your newsletters and emails
- Call up current or lapsed donors
- Send out a survey
- Add questions to your donation forms
- Host a roundtable conversation
Most people will happily share their thoughts, experiences, and preferences. What you find might be empty, unconstructive, too personal, etc. But asking and actively listening doesn’t mean implementing.
Most donors want to be heard, so engage them in conversations about the organization's goals, challenges, and plans. Hearing from your community can give you more detailed insight that helps you shape donor retention strategies. This way, you're only prioritizing your time and energy on what matters to people who are passionate about your mission.
FAQs to support your donor retention strategies
