There’s good reason why donor retention is a hot topic in fundraising. Encouraging existing donors to give again is far less expensive than attracting new supporters and can lead to a long-term payoff for nonprofits.
Yet donor retention is on the decline.
A 2014 study by the Urban Institute and the Association of Fundraising Professionals reported that the average annual donor-retention rate at nonprofit organizations is just 43 percent.
What does that mean in terms of dollars? For every $100 a charity raised from new donors in 2013, it lost $92 from existing donors who gave less or stopped giving entirely.
A well-run organization that focuses on holding on to donors should have a first-year retention rate of around 40 to 45 percent and a multiple-year retention rate of 75 to 85 percent, says Roger Craver, author of the book Retention Fundraising: The New Art and Science of Keeping Your Donors for Life and contributor to The Agitator blog.
Just a small uptick in the number of people who become repeat donors can have a big impact over time. Improving retention rates by 10 percent can increase the total amount of money donors give over the course of their relationship with the charity by 150 to 200 percent, according to Adrian Sargeant, a professor of fundraising and director of the Centre for Sustainable Philanthropy at Plymouth University.
To keep donors in the fold, organizations need to make time for building relationships, say fundraising experts. That includes timely and personal gift acknowledgments, continuing communication with supporters, and recurring-donation programs, all of which can improve the odds that donors will keep giving year after year.
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