If you gather a group of nonprofit professionals and ask what their biggest fundraising challenges are, many will likely say they don’t retain enough of their donors. Are you one of them? Do you find yourself asking, “why is my nonprofit struggling to retain donors?”
It’s no secret that long-term, repeat donors help you raise more money. And we know that the average donor retention rate for nonprofits hovers around 45 percent. But why has this number remained flat for years while nonprofits continue to focus on donor retention?
We find there are a few key reasons why nonprofits struggle to retain donors. And you know that no two donors are the same and there is no one-size fits all approach to fundraising. But while the solution for each nonprofit may be different, many are struggling to retain donors for similar reasons.
So why is your nonprofit struggling to retain donors? And what can you do about it?
1. You Don’t Do Enough to Say Thank You
We know what you are thinking, but please don’t get defensive! Most organizations have an automated email set up to thank donors for their gift and provide a receipt when a donor gives. But if this is all you do to say thank you, you’re not doing enough.
An initial automated thank you is important. It lets the donor know that the transaction was processed and you received their donation. However, it’s not enough to make your donors feel special and like they made a difference.
So, if you are doing the bare minimum to thank your supporters, it’s no wonder why your nonprofit is struggling to retain donors.
Instead, follow up with donors several times after they give. Send a post card after that automated email goes out. Show the donor how their money is being put to work to achieve your goals. Use images that demonstrate the impact of your work, and let the donor know they made it possible.
Or better yet, pick up the phone and give donors a call to say thank you. This is especially important for major donors or new donors who give above your average gift size.
Finally, put together an impact report or use your annual report to show donors how continued support helps achieve your goals.
And no matter how you reach out, make sure you express gratitude for every donation and explain that your donors make your work possible.
2. You Don’t Vary Your Communications
You can’t treat your donors like a personal ATM machine. And that’s exactly how they will feel if they only hear from you when it’s time to send an appeal.
So, what messages are your donors hearing in between appeals?
We already touched on the importance of sharing impact and annual reports with your donors. But how else can you maintain contact and keep donors engaged?
First, start by inviting donors to participate in any volunteer opportunities. This gives them a way to give without a monetary commitment. You could also send a donor survey to get a better feel for why they support your organization.
But you should also send communications that don’t require any action from the donor. For example, your data can help you reach out to donors on their birthday or the anniversary of their first donation so you can acknowledge these milestones and say thank you again.
And when someone gives to your organization for the first time, send them a donor welcome kit. Remember, donors who make a second gift are retained at a rate of 60 percent, according to the Nonprofit Recurring Giving Benchmark Study.
3. You Don’t Promote Recurring Giving Options
And according to the same study, donors enrolled in a recurring giving program are retained at an even higher rate of 90 percent! So, it may be time to set up or improve your monthly giving program if your nonprofit is struggling to retain donors.
Monthly giving programs can enable automatic payment processing each month. All a donor has to do is sign up and enter their payment information once. A word of warning, keep an eye on expiration dates of your donors’ credit cards. This way, you can remind them to update their information before they miss a gift!
Signing up for monthly giving allows your nonprofit to raise more while lessening the burden of giving for donors. You’ll raise 20 percent more from someone giving $20 a month than $200 a year. And your donor can easily manage smaller monthly payments.
So, look closer at monthly giving if you’re struggling to retain donors. If you don’t have one, get started by adding the option to make every donation monthly on your online giving page and build a more in-depth program from there.
4. Your Data is a Mess
It’s going to be hard to retain donors and keep them engaged if you don’t have their most recent information.
If your nonprofit is struggling to retain donors, you may need to practice better data hygiene.
Your appeals and other communications won’t do any good if you’re sending them to an address your donor no longer lives at. Plan to reach out periodically to make sure your information is up to date.
If you’ve ever had a big move yourself, you know how much is involved. Remembering to let every organization you support know about your address change is usually low on the priority list.
So, be proactive about making sure your data is current. This also means cleaning up your email list and removing anyone who has not engaged with your organization in years. An overstuffed, out-of-date email list will skew your results and make it harder to analyze your results and make improvements.
Why Donor Retention Matters
You already know that long-term donors are more valuable to your organization that people who make a one-off donation. But did you know the timing of a donor’s second donation can tell you a lot about their long-term value.
According to data from Analytical Ones, a donor who makes a second donation within three months is 58.4 percent more valuable over five-years, than a donor who gives for the second time between 10 and 12 months after their initial donation.
And yes, you’ll often raise less from a donor’s first gift than it costs to secure them.
Is your nonprofit struggling to retain donors? If you’re like countless other fundraisers and said yes, see if any of the four issues we covered are the reason why.