How to Retain Donors: 7 Expert Donor Retention Strategies
Acquiring a new donor for your nonprofit is no small feat, especially if they’re a major donor, but the work doesn’t stop there. Once a first-time donor makes a gift, it’s up to your organization to effectively steward them so they feel like a valuable part of your nonprofit’s community and want to give again in the future. This is where your donor retention strategy comes in.
With a strong strategy for retaining donors, you’ll be able to build relationships that last and create a loyal base of support your nonprofit can count on. This guide will help you improve your approach to donor retention by covering everything you need to know, including:
Retention is a crucial part of fundraising, and the right donor retention strategies and support can propel any organization to new fundraising heights. Let’s dive in so your nonprofit can hit the ground running with a new and improved retention strategy.
What is Donor Retention?
Donor retention measures the number of donors who give to your nonprofit for consecutive years. If a supporter who donated last year gives again at any time this year, your organization has retained that donor.
More broadly, donor retention also refers to the strategies your nonprofit uses to try to retain donors. Monitoring donor retention tells you how successful you are at engaging donors. Keeping your donors involved will encourage them to continue their support of your cause over time.
Why is Donor Retention Important?
Every nonprofit needs donors who are committed to their cause long-term. These donors help sustain your organization’s work and become ambassadors of your cause to others. Having a thorough donor retention strategy allows you to cultivate and maintain these crucial relationships, providing reliable support for your nonprofit year after year.
Donor retention is also key to a sustainable fundraising strategy. Acquiring donors is expensive, and most organizations can’t afford to spend all of their resources on marketing to donors who only give once. Focusing on retention, on the other hand, is more affordable and helps you upgrade donors to higher giving levels over time. Plus, the funds you save by focusing on donor retention can be allocated toward more mission-critical activities and services, allowing you to help even more beneficiaries.
Finally, retaining a strong base of donors builds credibility for your nonprofit. When prospective donors see that your organization has a large number of engaged, loyal supporters, they’ll be more likely to believe in your nonprofit and your ability to further its mission.
Understanding Donor Retention with Metrics
Now that you understand what donor retention is, it’s time to take a closer look at where your organization stands. To do so, you’ll need to calculate the following donor retention metrics:
Donor Retention Rate
Your organization’s donor retention rate measures the percentage of donors you’ve retained from one year to the next. To calculate your donor retention rate, use the following formula:
(Number of returning donors in year 2 / All donors in year 1) x 100 = Donor retention rate
For example, say that your nonprofit is calculating your retention rate from 2023 to 2024. If you had a total of 452 donors in 2023, 230 of which donated again in 2024, your retention rate would be (230 / 452) x 100 = 50.89%.
Your retention rate tells you how successfully you’re engaging donors and is a major indicator of your organization’s fundraising health. According to the Fundraising Effectiveness Project, the current average donor retention rate is 30.7%, but this is lower than in previous years. Typically, a donor retention rate around or above 40% is considered healthy.
Along with calculating your total donor retention rate, you can determine average retention rates by giving level to get a better understanding of how effective your engagement strategies are for each group. Compare your donor retention rates to the following averages:
Micro donors (less than $100): 21%
Small donors ($100 to $500): 37.9%
Mid-level donors ($500 to $5,000): 48.6%
Major donors ($5,000+): 51.1%
What constitutes each giving level for your nonprofit may vary depending on your organization's size and donor base. For example, a smaller nonprofit may qualify any gift above $2,500 to be a major gift while large organizations may consider major gifts to be $10,000+.
Donor Lifetime Value
Donor lifetime value (LTV) gives you an approximation of how much an individual donor will give to your nonprofit throughout their lifetime. This metric helps you prioritize donors or groups of donors to focus your retention efforts on.
To calculate LTV, you’ll need to first determine a donor’s average annual giving amount and estimate how long they’ll have a relationship with your nonprofit (based on organizational averages). Then, use the following formula:
Average annual donation amount x Number of years with your nonprofit = Donor LTV
So, if a mid-level donor named Sally gives about $2,500 to your nonprofit on average, and you expect her to continue giving for at least 7 years, Sally’s LTV would be $2,500 x 7 = $17,500.
Donor Attrition Rate
If you want to calculate the reverse of your donor retention rate (i.e., how many donors lapse each year), you can find your donor attrition rate using the following formula:
((Total donors last year - Total donors this year) / Total donors last year) x 100 = Donor attrition rate
This calculation gives you a percentage of the donors you lost between one year and the next. If you notice your attrition rates getting higher over time, this is an indication that you may need to refresh your donor retention strategies and renew your efforts to retain donors.
Top Donor Retention Strategies
The relationship between donors and your nonprofit is defined by the ways you communicate and the experiences you offer them. To improve your donor retention rates, focus on making donors feel valued, important, and appreciated. Let’s explore the top strategies you can use to do so.
1. Evaluate Your Methods
Before you move ahead with creating and executing a donor retention plan, you need to know where you stand. Start by using your donor database to determine how many donors you’ve retained, acquired, and lost in the past few years.
Then, analyze your past fundraising campaigns and retention efforts to identify any gaps or factors that may be contributing to low retention rates. For instance, you might notice that you never updated donors on the impact of their donations after your last campaign or that several mid-level donors indicated that they didn’t feel appreciated enough in a post-event survey.
It can be difficult to undertake this process on your own since your staff members don’t have an objective view of your fundraising campaigns. Consider working with a fundraising consultant instead who can give you their professional, unbiased opinion. These experts can assess all aspects of your fundraising strategy, helping you identify opportunities for growth and potential challenges across multiple facets of your organization.
2. Offer Multiple Ways to Give
When you allow donors to give in the ways that are most convenient for them, they’ll be more likely to donate regularly. This is especially true of recurring giving programs, which allow donors to give a regular amount to your nonprofit each month through automatic payments.
Not only does recurring giving help you retain donors by making it easy for them to give repeat donations, but it also makes giving much more convenient and affordable for donors. For instance, instead of giving a one-time donation of $300, a donor could give $25 each month—and they still only have to fill out your donation form one time!
If you don’t have a recurring giving option on your donation page already, adding it should be your first step. Then, consider any other payment options that might appeal to your donors. For example, some high-capacity donors may want to donate noncash gifts like stocks or cryptocurrency while others would rather give in-kind donations of items your nonprofit needs.
3. Thank Donors Often
Thanking donors should be part of every fundraising plan you make to encourage retention. From the initial thank-you email you send immediately after someone donates to a celebratory thank-you message at the end of the campaign, you should thank donors often and in a variety of ways. This might include thanking donors via:
Letters and handwritten cards
Videos featuring staff and beneficiaries
Small gifts like branded stickers
Public recognition like social media shout-outs
Showing donors your appreciation should go beyond the scope of your fundraising campaigns, as well. Consider thanking donors on special occasions such as a donor’s birthday or the anniversary of their first donation to show them how much you value their individual commitment to your cause.
4. Personalize Outreach
Personalizing your communications is another great way to share your appreciation with donors and make them feel like valued members of your organization’s community.
Personalize both fundraising appeals and non-appeal outreach with donors’ names, engagement histories, and other details like the amount of their last donation. These details show donors that you’re paying attention to their contributions, increasing the chances that they’ll feel valued and want to stay involved with your nonprofit.
Plus, personalizing messages helps you get donors’ attention. For instance, an email subject line that reads “Jo, join us for our annual auction in May!” is more likely to make an impression on your donor than a generic message like “Announcing our upcoming fundraising auction.”
5. Segment and Automate Communications
To ensure all of your communications are personalized and relevant to donors’ interests, use your data to segment donors based on shared characteristics. You might group them by:
Giving level
Donation frequency
Charitable interests
Involvement history
Demographics
Once you’ve created these segments, you can use your CRM or donor management software to automatically add donors to segments based on their data and send relevant messages. You might send an invitation to a local in-person event only to donors who live in the area, for example. Or, send personalized updates about the progress of your capital campaign to everyone who donated to that campaign.
6. Share Impact Stories
Donors give because they want to make a difference for your cause, and they need to feel that their impact is substantial to continue giving. In fact, not seeing or understanding the impact of their gifts is one of the top reasons donors lapse.
Retain more of your donors by consistently sharing updates about your nonprofit’s work and the personal impact that donors’ contributions make. Share true stories that give donors tangible examples of their gifts’ impact on beneficiaries. For example, you might send the following message to a donor named Darren:
Darren, thanks to your generous $400 donation to our after-school program, we were able to provide brand-new arts and crafts supplies for the hundreds of children we serve. Watch the video below to hear from a student about what donations like yours mean to them.
7. Request Feedback
When in doubt about which donor retention strategies to pursue, don’t be afraid to ask your donors directly. Donors can tell you exactly why they give to your organization year after year or, on the flip side, explain what they’re missing in their relationship with your nonprofit that may cause them to lapse.
Send out surveys periodically that ask open-ended questions like:
What are the main reasons you support our nonprofit?
Do you feel like an active member of our organization’s community?
Which aspects of our cause are most important to you?
Do you feel that your donations have made a difference?
How satisfied are you with your giving experience?
Along with providing actionable insights about what you can do to better engage donors, these surveys will make your supporters feel heard and show them that you value their opinions. Be sure to take all feedback seriously, and thank every donor who fills out your survey.
How Donorly’s Fundraising Experts Can Help
Crafting a comprehensive donor retention strategy from scratch can be a challenge, especially if your nonprofit has limited resources and experience. That’s why many organizations turn to professional fundraising consultants for guidance.
The team at Donorly is well-versed in all aspects of fundraising, including how to help nonprofits cultivate and maintain relationships with their most important donors. Whether you want to overhaul your existing fundraising strategy or increase donor retention rates for your next major campaign, the Donorly team can help.
Depending on your organization’s needs, the experts at Donorly can provide you with the following services to help boost donor retention:
Donor research. In-depth prospect research services don’t just help you find potential major donors. They can also give you valuable insights you can use to cultivate, steward, and retain major donors long-term.
Capital campaign planning. Get expert guidance through every phase of your nonprofit’s capital campaign, from planning to donor recognition strategies that help you boost retention.
Campaign strategy. No matter what size campaign you’re planning, the Donorly team can help you assess your existing strategy and holistically improve it to raise more and retain more donors.
Fundraising training. The consultants at Donorly understand that donor retention is a crucial part of any effective fundraising strategy, and they can train your staff and board members on fundraising best practices to increase your capacity for success.
Development support. Don’t have enough staff to focus your attention on donor retention? The Donorly team can step in to provide transitional staffing and even help you through the hiring process.
Wrapping Up
Prioritizing donor retention when you have new and exciting fundraising campaigns in the works can feel counterintuitive, but it’s a worthwhile endeavor for any nonprofit. The more you work to cultivate positive relationships with your donors, the stronger your nonprofit’s support base becomes.
To learn more about improving donor retention and the rest of your organization’s fundraising efforts, check out these additional resources:
Fundraising Strategy for Beginners: How to Create Your Own. Explore every aspect of a comprehensive fundraising strategy, and learn how to develop one for your organization.
Finding Major Donors: How to Identify & Secure Major Gifts. Donor retention is especially important for your organization’s major donors. Learn more about the entire major donor fundraising cycle, from identification to stewardship.
Free Step-By-Step Fundraising Plan Template for Nonprofits. Not sure how these donor retention strategies fit into your next campaign plan? Use our free fundraising plan template to cover all your bases and see the full picture.
