Donor Retention Ideas and Best Practices for Nonprofits

As a nonprofit professional, you understand the power of cultivating strong relationships with donors. Their passion and generosity make your mission come to life.

That being said, it takes significant effort to preserve these connections over time and secure consistent fundraising revenue. Having a robust donor retention strategy in place will help you deepen your donor relationships and achieve sustainable growth. In this guide, we’ll discuss these fundamental aspects of donor retention:

• Donor Retention FAQs
• Donor Retention Best Practices
• Creative Ideas to Boost Donor Retention

By following these tips and tricks, you’ll be equipped to retain more donors while expending less effort and money on your strategies. Let’s begin!

Donor Retention FAQs

Whether you’re a new nonprofit founder or a seasoned professional, you might have some questions about donor retention fundamentals. Let’s get on the same page by answering these frequently asked questions.

What is donor retention?

Donor retention is the process of encouraging donors to continue giving to your nonprofit over time. This involves deepening your personal connections with donors and demonstrating their gifts’ impacts on your beneficiaries and the greater community. 

Why is donor retention important?

Compared to donor acquisition (the process of identifying new donor prospects and convincing them to donate for the first time), donor retention is more:

• Cost-effective: It’s more affordable and efficient to keep existing donors than it is to attract new ones. After all, donor acquisition requires researching prospects, launching extensive marketing pushes, and building a case for support. Existing donors already know your nonprofit’s mission and have already provided you with their contact information, negating additional research and outreach.
• Sustainable: Retained donors provide a reliable and predictable source of income, which is better for the long-term financial health of your nonprofit. 
• Personal: While donor acquisition requires building relationships from the ground up, effective retention relies on deepening existing donor relationships, which takes less time.

While both donor acquisition and retention are important to fundraising success, retention is a more feasible and efficient approach to maximize donations and increase supporter loyalty.

How is donor retention measured?

There are numerous significant donor retention metrics that your nonprofit should think about tracking as key performance indicators (KPIs), such as: 

• Donor retention rate measures the percentage of donors that give again after their initial contribution. Use this baseline metric to set donor retention goals.
• Average gift size helps indicate whether retained donors are giving more or less over time. You could use your average gift size KPI to adjust your initial ask account to reflect your donors’ current ability to give.
• Frequency of giving measures how often donors contribute to your organization. You might prioritize promoting your monthly giving program if your frequency of giving KPI is lacking.
• Donor lifetime value measures the total value of a donor’s contributions following their initial contribution. 
• Donor retention cost measures how much you spend on outreach efforts to maintain existing donor relationships. By comparing this to your cost to acquire a new donor, your nonprofit can evaluate how effective and valuable your retention strategy is and adjust it accordingly.

All of these metrics provide data that you can use to optimize your donor engagement strategies from many angles. 

What are the common reasons donors stop giving?

Understanding why some donors stop giving can help you proactively prevent churn and secure more repeat donations. While each donor is different, here are the most common reasons why they might stop contributing: 

• Lack of communication: If a donor hears radio silence after contributing, they might feel unappreciated or unsure that their gift had any real impact.
• Too many fundraising appeals: While a lack of communication is problematic, you also don’t want to inundate donors with appeals or irrelevant, generic communications.
• Poor donor journey: Donors may stop giving if they experience roadblocks in their donor journey, such as an unoptimized online donation form.
• A shift in financial status: Your donor might cancel their gift if their budget has changed.
• Loss of interest: If your nonprofit doesn’t keep your donors engaged, they might lose interest in your mission and stop contributing
• Negative publicity: Controversy surrounding your nonprofit, its staff, or board members can yield a loss of trust from your donors.
• Lack of financial transparency: If your donors don’t understand what their gift is being used for and your organization’s financial practices, it might lead them to distrust your use of their funds.
• Competition: Donors may find another organization that better engages them or aligns with their values and decide to contribute to them instead. 

Fortunately, your nonprofit can combat these reasons for churn and create a more connected and passionate donor community with the rest of the tips in this guide.

What are some important donor retention statistics?

• The average donor retention rate for nonprofits is 40-45%. (GiveSmart).
• The cost of bringing in a new donor is often double or even triple the amount of their initial donation. (Instil)​.
• A 10% reduction in donor attrition can yield up to a 200% increase in projected value. (Instil).

Donor Retention Best Practices

Now that you understand the importance of donor retention, it’s time to implement retention best practices into your organization’s daily operations. Consider adding the following practices to foster a donor-centric culture:

1. Segment donor communications.

To keep donors engaged enough to keep giving over time, your team must personalize your outreach efforts as much as possible. Donors respond better to communications crafted with their own interests and priorities in mind, but don’t worry—you don’t have to spend all of your time painstakingly personalizing messages. Using segmentation techniques allows you to send customized messages efficiently. 

Using your donor database, separate your donors into groups based on certain criteria, such as:

• Profession: Donors in stable careers are more likely to have money to donate. Plus, their workplaces might have corporate philanthropy programs that you can promote for retention and increased giving. 
• Giving history: If a loyal donor who used to make an annual donation has stopped, you could craft a targeted message inviting them to re-engage. 
• Interests or preferences: Donors are more likely to renew their support for campaigns that they’ve shown interest in before.
• Engagement level: This can include factors such as event attendance, volunteer involvement, and other activities outside of simply donating. Suggesting they get involved in another aspect of your nonprofit’s work can lead to higher engagement and another donation down the line.
• Communication preferences: Segment your message delivery based on your donors’ communication preferences, such as email, direct mail, SMS, or phone call.

Segmentation is only possible when your nonprofit keeps thorough information in your database and frequently cleans it out. NPOInfo’s guide to nonprofit data hygiene recommends establishing a regular cadence for deleting duplicate records, appending contact information, and amending inconsistencies in your database. 

2. Demonstrate impact.

Your donors want to know that their investment in your organization has a real effect on your beneficiaries. Win future donations by showing each donor their impact on the pursuit of your mission. You can demonstrate impact and secure recurring gifts by:

• Sending detailed impact reports to each donor. After your campaign has finished, send your donors segmented messages detailing exactly how their contribution made a difference. 
• Creating an annual report. This document provides a great opportunity to present your organization’s progress and how particular donors helped you achieve your goals. Consider adding a donor shoutout section where you list the top donors and the influence of their contributions.
• Introducing them to beneficiaries. Organize a donor beneficiary meet and greet (with permission) where donors can learn about their gifts’ impacts straight from the beneficiaries. This allows your supporters to forge a personal bond with beneficiaries and better understand that their actions significantly change lives. 

No matter which strategy you take, ensure you demonstrate more than monetary impact to donors. They’re aware of how much they gave, but they might not know what the gift provided.

For instance, a food bank might tell a donor that their gift provided 30 families with meals for the rest of the month. This gives your donors a unique perspective on their own philanthropic practices and can inspire them to increase their engagement going forward.

3. Prioritize transparency and accountability.

To sustain the satisfaction of your donors, your nonprofit needs to win and keep their trust. Emphasize your commitment to transparency by:

• Publishing your Form 990. Your organization’s Form 990 is publicly available and provides all financial and personnel information to potential supporters. Post your Form 990 on your website for easy access.
• Regularly auditing data. Your nonprofit has a responsibility to your beneficiaries and stakeholders to keep accurate records. Integrate data hygiene into your daily operations by periodically reviewing important data and being accountable for any discrepancies.
• Encouraging feedback. Ask donors and other stakeholders for their feedback on your nonprofit’s direction, effectiveness, and other considerations. 

Allow your donors to rest assured that they’re supporting a reputable nonprofit by maintaining transparency throughout the fundraising process.

Creative Activity Ideas to Boost Donor Retention

Now that you understand the overall best practices you should integrate into your daily operations, it’s time to put them into action and pursue donor retention. Consider the following activity ideas that can help improve donor retention:

1. Provide ongoing involvement opportunities.

There could be any number of factors impacting your donors’ giving habits. Keep supporters engaged no matter their financial situation by offering numerous ways to get involved with your nonprofit’s mission, like:

• Volunteering
• Sharing your social media posts
• Attending your nonprofit’s events

Unfortunately, once a donor’s pattern of giving is changed, it’s a slippery slope to them churning and losing their passion for your cause. Avoid this outcome by keeping their enthusiasm alive with other ways to contribute to your cause. They’ll be more likely to start giving again once they’re able to!

2. Offer exclusive benefits and experiences.

Simply put, without your donors, your work wouldn’t be possible. Express your genuine gratitude for their contributions by recognizing donors, both publicly and privately. Here are some unique ways to show your thanks:

• Launch a donor loyalty program. Loyalty programs incentivize continued engagement with rewards. For instance, you might offer a small gift basket for donors who renew their annual donation for the fifth year in a row.
• Offer tokens of appreciation. Besides a loyalty program, you can give donors tokens of your thanks for individual donations. For example, you could offer a t-shirt with your nonprofit’s branding for gifts above $200. 
• Organize VIP experiences. Show your donors a good time by extending an exclusive invitation to your events. You could curate a VIP experience for donors above a certain threshold complete with free food, a backstage tour of your facility, and one-on-one conversations with officers or board members. 

Your supporters will be impressed with your nonprofit’s outstanding commitment to donor appreciation and might renew their support to access more exclusive offerings like these!

3. Promote corporate social responsibility programs.

Leveraging corporate social responsibility (CSR) offerings, such as matching gifts and volunteer grants, are a powerful way to renew and increase support for your organization. 

According to Double the Donation’s list of matching gift statistics, 84% of survey participants said they were more likely to donate to a nonprofit if a match is offered by their employer. However, only a fraction of CSR money is claimed each year due to employee unawareness of their company’s matching gift policy. To access the benefits of CSR, it’s up to your nonprofit to spread awareness of CSR offerings by:

• Using a matching gift tool with auto-submission capabilities. Make it effortless for donors to secure a matched gift from their company by integrating a matching gift tool with auto-submission into your giving page. This software allows supporters to request a matching gift from their employers without the tedious work of submitting forms to the company. Instead, they simply input their work email address into the system and the software submits a request on the donor’s behalf.
• Hosting a matching gift Giving Day. By hosting a Giving Day specifically geared towards generating matching gifts, you can activate urgency for your cause and inspire donors to check their employer’s matching gift programs.
• Creating calls-to-action leading to your CSR information page. First, write an informational page on your website explaining everything a donor needs to know about CSR. Then, include clickable call-to-action banners in your email messages that promote the page. 

Empowering your donors to leverage CSR supercharges your fundraising potential and inspires supporters to continue impacting your mission, with the help of their employer.

Send personalized milestone greetings.

Keeping in touch with donors about personal milestones is important for establishing rapport and showing that you care about them as people. Some milestones you could reach out on include:

• Birthdays
• Work anniversaries
• Anniversaries of supporting your organization
• Holidays
• Wedding anniversaries

Using your CRM, keep track of any personal information you gather about your donors through casual conversations with them. Then, set reminders so you can send your custom messages on time. Don’t forget to make your messages pop by using your nonprofit’s branding or by sending an eCard.

Wrapping Up 

Maintaining strong connections with donors over time can be difficult, especially when aiding your beneficiaries is your top priority. But, by incorporating donor retention best practices and activities, you can spark interest in your cause while cultivating long-term relationships and support. 

Plus, your nonprofit has many options for structuring your retention efforts, from sending eCards to offering exclusive branded merchandise. Ultimately, as long as your team shows your authentic appreciation for your donor’s support and demonstrates their significant impact, you’ll have a sustainable donor retention rate for years to come.

Additional Resources

The Beginner’s Ultimate Guide to Nonprofit Marketing. Want to learn how to level up your marketing efforts to acquire and retain more donors? Learn from the experts at NXUnite in this guide.

Upcoming Webinars, Panels, and Discussions with Industry Experts. NXUnite gathers all of the nonprofit professionals in one place for insightful discussions via panels and webinars. Join the conversation by signing up today!

Donor Recognition: A Strategic Guide to Showing Appreciation. Once you’ve acquired or retained your donors, thanking them for their support is crucial. Secure long-lasting relationships with donors by following the unique tips in this guide.