Fundraising is no mean feat.
Nonprofits are constantly working to improve their donor retention rate, and program directors often feel as if donor acquisition and donor retention are at loggerheads. Add to that the lingering uncertainty the pandemic introduced into the donation cycle, and the question becomes urgent: will recurring donations stop in an economic downturn – and what about new donors?
Some nonprofits saw COVID-19 as a black-swan opportunity that drove the adoption of new technologies and creative ways to raise money. When Macmillan Cancer Support estimated a £95m drop in donations because of the pandemic, the organization turned to virtual escape rooms and online quizzes to bring supporters back. A wider range of innovative fundraising strategies helped them weather the storm.
Plenty of articles cover ways to lift donor retention. In this guide, we go a level deeper: what motivates donors to give in the first place, and how that ties to retention.
Why donor retention matters
According to the Fundraising Effectiveness Project – research by the Association of Fundraising Professionals (AFP) and the Center on Nonprofits and Philanthropy at the Urban Institute – the average donor retention rate for nonprofits sits around 45%. Roughly half the people who give once never give again.
That number matters because:
- It’s far cheaper to retain a donor than to acquire a new one – nonprofits often spend 2–3× more on acquisition than on retention.
- Retention drives larger gift sizes over time. An integrated marketing and communication strategy that engages your constituents builds trust, and recurring small donations grow into substantial ones.
- A healthy retention rate is a signal of trust. It tells funders, board members, and prospective donors that your supporters keep coming back – which is itself a powerful marketing asset, amplified by your impact reporting.
How to calculate donor retention rate
The formula is simple:
# of returning donors (Year 2) ÷ # of donors in the prior year (Year 1) = Donor retention rate (%)
If you had 400 donors in 2024 and 180 of them gave again in 2025, your retention rate is 45%.
What motivates donors to give
A Indiana University Lilly Family School research on high-net-worth philanthropy, in partnership with the Indiana University Lilly Family School of Philanthropy, gave us data on what actually moves people to give. The top motivators:
- Believing in the mission of the organization (54%)
- Believing that their gift can make a difference (44%)
- Personal satisfaction, enjoyment, or fulfillment (39%)
- Supporting the same causes annually (36%)
- Giving back to the community (27%)
- Religious beliefs (23%)
Tax benefits matter too – high-net-worth donors often give larger amounts in part for tax reasons. Money is its own motivator.
Know your donors
Take the famous Ice Bucket Challenge, which raised more than $100 million for the ALS Association in a single month. A study by Dr. Sara Konrath, Associate Professor of philanthropic studies at Indiana University, looked at how narcissism predicted giving behavior in that challenge. People who posted a video of themselves scored highest on narcissism; people who donated quietly without posting a video scored the lowest.
The takeaway isn’t a value judgment – it’s that different donors are moved by different things. Konrath’s recommendation: think about how to reach egotistically motivated donors, and for altruistic donors, demonstrate clearly how the values and mission of the organization align with theirs.
Get a thorough understanding of your donor behavior. Clarity here drives a winning communication and marketing strategy. For deeper plays, see our guide on donor retention strategies and ways to engage and retain donors.
Why donors stop giving
Funders and other nonprofit stakeholders want to know how their money is moving the needle. The pressure on nonprofits to demonstrate dollar-for-dollar outcomes has only increased.
Savvy fundraisers get this. They listen to donors and consistently communicate data-backed stories of program and mission outcomes – making it obvious why each donation matters.
Impact reporting is essential for donor loyalty. The impact reporting module in GiveLife365 aligns fundraising, program delivery, finance, and operations on a single purpose-built platform – so the story you tell donors is grounded in real data.
Focus on impact storytelling
One of the most reliable ways to lift retention is to put your impact in front of supporters in a way they can feel.
Pair quantitative evidence (KPIs tied to your mission) with qualitative evidence (images, video testimonials, real beneficiary stories). If your mission is youth empowerment, show how donor money moved the dial on counseling sessions delivered, scholarships funded, or graduates placed in jobs.
Three Fs to remember: faces, facts, and figures. Together, they make a compelling case for continued support – and that’s how you turn one-time donors into long-term supporters.
