Have you ever wondered why you put so much effort into getting new donors, yet they never stay? The answer might be your donor retention strategy.
Donor retention refers to how many donors continue to give to your nonprofit year after year. Tracking and optimizing your donor retention efforts is a crucial fundraising strategy.
Donor Retention Rate
Your donor retention rate tells you what percentage of last year’s donors still give today. It’s a key indicator of how well you build relationships with donors.
Here’s the simple formula to calculate it:
Donor retention rate = (Number of returning donors ÷ total donors from last year) × 100
Example:
If your nonprofit had 1,000 donors last year and 250 donated again this year, your retention rate is:
(250 ÷ 1,000) × 100 = 25%
That means 75% of your donors didn’t return, a sign that your donor retention strategy needs work.
The Fundraising Effectiveness Project (FEP) says the average donor retention rate is 30.7%. If your rate is below that, it’s time to take action.
First-Time Donor Retention:
Most first-time donors never give again. That’s why first-time donor retention rate is a critical metric.
Formula:
First-time donor retention rate = (number of first-time donors who give again ÷ total first-time donors from last year) × 100
Example:
If 100 people donated for the first time last year and only 19 donated again, your retention rate would be:
Retention rate = (19 ÷ 100) × 100 = 19%
FEP data shows that, on average, only 19% of first-time donors give again.
If your percentage is higher, you’re doing a successful job engaging new donors! If not, you need to improve your follow-up and engagement strategies.
Donor Attrition Rate:
Donor attrition rate tells you the percentage of donors who stop giving each year.
Formula:
Donor attrition rate = ((Total donors last year – Total donors this year) ÷ Total donors last year) × 100
Example:
If you had 1,000 donors last year and 700 this year, your attrition rate is:
((1,000 – 700) ÷ 1,000) × 100 = 30% attrition rate
If your attrition rate is rising, you need to refresh your retention strategy
Now, let’s look at some key statistics about donor retention.
Donor Retention Statistics
Retaining donors can be up to 5x cheaper than acquiring a new one.
In 2023, revenue from monthly donors rose by 6%, making up 31% of all online donations.
Research shows that 45% of online donors say email inspires them to give again. Email also increases retention for offline donors by 29%.
Research shows that 51% of donations come from women, and they give 63% of contributions on Giving Tuesday.
A recent campaign shows that easy payment methods boosted revenue by 80%.
Proven Strategies to Boost Retention
Personalize Communication:
Sending personalized messages to donors makes them feel needed and appreciated. Use your ideal donor profile to personalize the messages.
Show Impact:
Donors stay where they matter. Share stories of how their donations saved lives. Show them that they matter to your organization.
Recurring Giving:
Encourage recurring giving. Use pop-up prompts on your websites to get your donors to join your recurring donor programs. Note that 94% of recurring donors prefer to donate monthly.
Use Fundraising Software:
Fundraising software like Lamp automates strategies 1-3, including easy payment.
A strong donor retention strategy is key to your nonprofit’s success. It gives you stable funding, deeper donor relationships.