Donor Insight. Fundraising Action.

Metrics That Matter #4:  Donor Retention

Posted by Caity Craver on 07/2018

How many donors will you lose this year? Calculate your donor retention today.The days of the seemingly infinite pool of new donors available to quickly and inexpensively replace those who’ve stopped their support are long gone.

Today, as more and more donors abandon ship, the cost of replacing them has grown so great as to be no longer affordable for many nonprofits.

It doesn’t have to be this way.  Consider this:

  • The average nonprofit has a 60-70% chance of obtaining additional contributions from existing donors.
  • A 20-40% probability of securing a gift from a recently lapsed donor;
  • But less than a 2% chance of receiving a gift from a prospect.

With figures like these, you’d think we’d be pouring the bulk of our marketing and fundraising dollars into retaining, rather than laying out huge sums to acquire more and more new donors.

EVEN WORSE … the failure to pay attention to donor retention is costing the nonprofit sector tens of millions of $ each year as donors head for the exit.

  • The national average for retention of first-year donors is 23%. This means 77 out of every 100 new donors won’t stick around to be of any help to you in the second and subsequent years.
  •  And the national average for retention of multi-year donors (those who have been with an organization 2 or more years) is only 42%. Meaning that 58 out of every 100 donors will become inactive or disappear.

If there’s any number in your fundraising bank account you need to be alert to, it’s your organization’s donor retention rate.  Understanding and acting on basic metric is the key to your organization’s future success.

The Donor Retention Metric should be regularly evaluated among two distinct populations:

New Donors:  A donor who has made his/her first gift to your organization last year.

Existing Donors:  Donors who’ve given in a least the two previous years to your organizationsDonor Retention Calculation.

As you’ll see from the graphic i, it’s quick and easy to calculate the Donor Retention Rate for both these donor populations.  AND…it’s important to stay on top of these metrics on a a regular basis.  So, start today by determining  your New and Existing Door Retention Rate and then check on it regularly.

PLUS … the DonorTrends team is happy to calculate your Donor Retention rates for you and  let you know how your organization’s retention stacks up with other nonprofits in your sector.  Or you can do it yourself by giving our DonorLytics Dashboard a FREE try.

Caity

P.S.  Once you have your retention rates in hand, we’ll be happy to send you a complimentary copy of Roger Craver’s Easy Retention Wins for Everyone.  Roger is part of the DonorTrends team and these easy-to-implement and inexpensive tips are taken from his classic, best seller, Retention Fundraising: the art and science of keeping your donors for life.

Topics: Retention, Retention Rate, benchmarks

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We know how many capes you have to wear. Fighting the good fight, trying to raise money to fund critical programs. We're here to help. We're using this space to collect tips and trends that will help strengthen your fundraising superpowers.  Together, we'll fight Fundraising Foes like donor attrition, downgrading, and rising costs. 

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