Here is a peek into some remarkably interesting statistics.
- A 5% increase in customer retention can boost your bottom line by 25-95%.
- Selling to an existing customer is 60-70% likely to convert into a sale as against 5-20% when dealing with new prospects.
- The donor retention rate across non-profits is between 40 to 45%. That means, more than half of your donors will not be coming back next year!
Clearly, there is tremendous value in boosting your donor retention rates. However, there are innumerable non-profits that struggle with donor retention due to several reasons.
So, what can you do to keep your donors coming back and support your cause?
Before we deep dive into the topic, let us start with understanding what is donor retention and why is it important for non-profits.
What is donor retention?
Donor retention in simple terms is the measure of how many donors continue to donate money to your organization. It refers to the percentage of donors that return to donate another gift within a specific period.
Why must you have donor retention strategies in place?
1. Donor acquisition is a costly affair
Ask any non-profit and they will tell you how pricey it is to recruit first-time donors. Various reports suggest that non-profits take somewhere between 18-24 months to recover the amount of money they spent to get a first-time donor onboard.
2. Donors help you gain access to a bigger network
When you impress your donors with your efforts and cause, there are higher chances to get repeated donations. Moreover, they recommend your non-profit and its cause to their friends and family, which adds to your fundraising efforts.
3. Donors’ open potential for bigger gift amounts
Numerous studies have shown a direct correlation between the donor retention pattern and donation amount/size. This means that the cycle of your non-profit’s growth increases with the increase in gifts over time.
Now that you have a clear idea about donor retention, let us help you establish a baseline to work on effective donor retention management.
Before we list down tips to boost your donor retention rate, here is how, to begin with, the process.
1. Capture and track the data
You must keep a clear track of donors that are associated with your organization and the gifts your non-profit is receiving. Without this number, it will be impossible to calculate your retention rates. There are multiple ways to calculate your retention rate and the one that you decide to adopt totally depends upon the size of your non-profit and the resources at your disposal.
| Donor Management Software | Spreadsheet | Fundraising Platform |
|---|---|---|
| Ask any CRM expert and they will tell you to get donor management software. An ideal donor management software like GiveLife365 will help you track donor information, gift amounts, interactions, and a lot more. | Many small-sized non-profits with limited budgets and resources still rely on spreadsheets to maintain their donor records. | There are several fundraising platforms available in the market that you can purchase to track individual donor information along with all the other relevant trends on your personalized dashboard. |
2. Calculate your initial retention
It is simple to figure out your retention rate with the following formula:
Number of returning donors/ Number of last year’s donors = Retention Rate
For example: if 200 donors from the previous year returned to give gifts again the next year out of a total of 300 donors, you retained 66% of your donors.
Once you have established the process to manage the donor data and calculate the retention rate, here are some proven donor retention strategies that will inspire and rally your supporters to come back and donate more.
Tips to increase your donor retention rate:
1. Personalized giving experience
It is important to build a personalized relationship with your donors. Speak with them directly. Drop them personalized emails. Here are a few suggestions:
- Refer to each donor by their name.
- Avoid generic greetings.
- Learn about your donor’s interest.
- Tailor your communication using the information about what they like.
- Invest in CRM software that will enable you to strengthen and grow valuable relationships that will support your mission.
2. Educate donors about your cause
For most non-profits, donors are just a medium to add monetary value to their cause. Do not make the mistake of treating them just like an opportunity. You must inform them why their donations make an impact on society. Encourage them to follow you on social media so they can be aware of your activities. Educate them with relevant information. Once they start believing in your cause, getting gifts from them again, will be easier.
3. Engage with them
In most cases, when an individual donates to your cause, there is a good chance that it resonates with his/her values/belief. With personalized communication, you can develop a trait sheet that can be used in organizing various engagement activities with them. You can request them to become a volunteer or advocate your cause or even become a board member. Here's an interesting opinion published in The Chronicles of Philanthropy on 'A Key to Diversity in Nonprofit Boardrooms: Mobilize Donors to Force Change'. This inclusive feeling deepens their faith in you and there are higher chances of not only them coming back with bigger gifts but bringing in more supporters to back up your cause.
4. Introduce offers to donate often
No one likes to be monotonous. When as a non-profit, you fail to present varied ideas or unique ways to contribute to your program, you are at the risk of losing existing donors. You can share online fundraising pages with them. Create exciting forms to be filled by donors.
Now you know the influence donor retention has on your organization. A healthy retention rate can result in lower fundraising costs. So, it is important that you adopt these tips to get the best out of your donor retention program. But you cannot do that unless you have a clear data tracking tool to help you make informed decisions.
With GiveLife365, you get access to cloud-based Fundraising and Donor Management solution for non-profits. GiveLife365’s Donor Management software improves your organizational efficiency and productivity by automating several important processes, such as creating and sending tax slips. You can connect with experts at GiveLife365 to create and manage the funds, keeping a track of the donor lifecycle and their donations.