Donor Retention: 5 Strategies to Earn and Retain More Donors

Getting a donor is half the battle; the other half is keeping them. 

Keeping your donors engaged year after year is a constant challenge. Donor retention is the key to long-term success. It's more than just securing a one-time donation; it's about fostering meaningful relationships that inspire continued giving. 

Efforts in donor retention focus on stewarding donors, building loyalty through effective communication, acknowledging donation impact, and developing long-term relationships with supporters. A donor management software is often used by nonprofits to manage donor information, track fundraising events, and maintain relationships with donors. 

High donor retention indicates that an organization is maintaining a solid relationship with its donors. Low donor retention might hint at underlying issues such as donor dissatisfaction, or a disconnect between the nonprofits mission and donor values. 

Donor retention strategies: how to earn and retain donors?

Retaining donors is often more cost-effective and sustainable for nonprofits than acquiring new ones, as the cost of recruitment and the uncertainty involved in first-time donor commitments can be higher. Here are a few donor retention strategies that you can implement to create long lasting donor relationships. 

• Choose the right donor management software
• Make the most of your donation tools
• Leverage corporate giving opportunities
• Implement smart prospect research methods
• Focus on getting the golden donation

Let's dig deeper into each of these donor retention strategies and learn how we can implement them. 

1. Choose the right donor management software

As you build up your donors, you’ll want to have a database that stores all their information in one central location. This makes accessing information quickly a breeze. Donor management software is a central hub for personalized information about each and every one of your donors. Nonprofits of all sizes can benefit from using this type of software.

While most nonprofits only include the information donors submit in donation submissions, some organizations include each donation amount. Even though this is a great first step, there’s so much more you can do.

Some additional important donor management software features to look for are:

• Donor documents. Save various external documents that relate to each donor. This puts access to usable and personalized info at your fingertips.
• Segmented donor groups. Take note of donors’ demographic information on their profiles. By doing this, you can call on certain people for certain tasks such as a location-specific project.
• Relationships. Track your relationship with each donor, as well as their relationships with one another and other organizations. For example, if someone is an executive for another nonprofit, take note. Knowing this helps with future outreach coordination.
• Notes. Adding notes to a donor’s profile can be a simple, but powerful, reminder of meaningful interactions – either positive or negative. This could include an event incident, meeting notes, or a phone call.

When all of your donor data is in one central location, it’s easier to pull this information when planning your fundraising strategies. Your software should offer several tools to create a positive, customized donor experience. By using these tools, you can even expand your online fundraising plan. Discover what tools to look for in your salesforce donor management software. 

2. Make the most of your donation tools

An effective donation software can improve donor retention by helping you coordinate outreach. Nonprofit CRM software helps your nonprofit raise more money with less effort, freeing up time and money that can be used on the fundraising campaign itself.

By making the most of your donation tools, you’re one step ahead of the competition.

Not only is using donation software a great way to revamp your fundraising approach, but you can also improve the donor experience with appealing campaign pages, easy-to-use forms, and much more.

3. Leverage corporate giving opportunities

Corporate giving programs are a mutually beneficial opportunity for nonprofits and corporations. These programs are an easy way to boost your organization’s funds, double your volunteers’ contributions, and engage your supporters.

There are 4 main corporate giving programs you should be aware of:

• Matching gifts essentially double eligible donations. After a donor makes a contribution, they can submit paperwork to their company. If the donation and your nonprofit are eligible, they’ll send a check for the same amount as the initial donation. An estimated $4-to-7 billion in matching gift funds goes unclaimed per year, so be familiar with these opportunities. While it’s up to donors to submit the paperwork, your nonprofit can help move the process along by educating your donors about these programs. 
• Volunteer grants are sums of money that companies give to an eligible nonprofit after one of their employees has volunteered a certain number of hours with the organization. There are individual volunteer grants, which reward one employee for their efforts, and team volunteer grants, which are made after a group of employees volunteer for a nonprofit. Volunteer grants can double volunteers’ contributions. Don’t overlook your volunteers; their free time is worth an average of $24.14 an hour.
• Corporate grants are donations companies give to an eligible nonprofit of their choice. To receive a corporate grant, nonprofits send grant applications and companies choose from a pool of applicants. Otherwise, companies may simply select a nonprofit on their own.
• In-kind donations are products or services that a company offers to nonprofits. Typically, in-kind donations can be along the lines of food and drinks for events, equipment for a project, or free or discounted services relevant to the organization. These donations typically come from companies that have an existing relationship with an organization.

Corporate giving programs are often underutilized due to lack of awareness by donors, volunteers, and even nonprofit professionals. Educating your supporters about these overlooked opportunities maximizes the return of their efforts. Making use of such programs multiplies their contribution and makes them feel more vital to the success of your organization.

These programs don’t require much more effort from supporters aside from brief paperwork. When supporters know their contribution is valued and significant, you re-engage them and form stronger, more loyal, relationships – keeping them for years to come.

4. Implement smart prospect research methods 

Prospect research is the process of learning more about your donors from publicly available data and is essential for identifying potential high-impact donors. 

It gives you additional insight as to who your donors are and what motivates them to give. No matter what your goals are, any nonprofit can benefit from donor prospect research software by saving time and resources and boosting fundraising efforts.

Prospect research tools can measure a donor’s capacity to give, as well as how likely they are to give. These tools go through your donors’ personal backgrounds, measuring individuals’ giving history, wealth indicators, and philanthropic factors.

So, how do you pick the right prospect research software? As with any software, it’s based on your nonprofit’s needs.

These factors indicate affinity capacity, philanthropic interests, and professional stability. When searching for the right prospect research technology, make sure to find one that’s capable of doing a social profile search on current and potential donors.

The more data you gather, the more you’ll know about your donors, including their preferences, affiliations, and so forth. When your donors feel as though you’ve taken the time to get to know them, their loyalty increases, helping you to gain and keep their support.

5. Focus on getting the golden donation 

A golden donation is that sought-after second donation. 

The process for securing a second donation is fairly straightforward and may align with some of your nonprofit’s existing practices:

• Have a first-time donor communications strategy. Welcome your new donors and inquire about their experiences through surveys. Use this feedback to improve your communications strategy, in turn, making them feel respected.
• Thank your donors. The quicker you respond to your first-time donors, the more likely they’ll be to interact with your future correspondences. Aim to respond within 48 hours through an email, a phone call, a text, or social media. To thank in a more thoughtful way, try a handwritten letter or a photograph of the work their money supports.
• Ask for non-monetary donations. People want to put their skills to use, so take advantage of the opportunity. If you have a project that requires non-financial assistance, bring it to their attention by promoting your advocacy opportunities.
• Deliver on your promises. If you say you’ll do something, do it, and do it in a timely manner. If you promise a gift like a mug or t-shirt, make sure they get it within a couple weeks. If you promise to keep donors updated on projects they contribute to, update them regularly. Donors respond well to consistency.
• Ask for the golden donation. If you don’t ask for it, you’ll never get it! Don’t ask too soon because you’ll seem greedy. Don’t wait too long because their contact information may change or you may fall out of touch. Send them the tools they need to donate, and base it on how they donated the first time. Remember to always, always thank them.

How to calculate donor retention rate? 

Donor retention rates can significantly vary across different sectors and types of nonprofits. A good retention rate may also vary depending on factors such as size of the organization or resources. A simple formula to calculate the donor retention rate is: 

Key points to consider: 

• Choose the time frame for your calculation. Most organizations calculate their donor retention rate on an annual basis.
• Determine the number of donors from the start of your time frame. This is the number of unique donors who gave a gift during the initial period you're analyzing (e.g., the previous year).
• Determine the number of those same donors who gave again in the subsequent period. This is your number of retained donors.
• Calculate the retention rate by dividing the number of retained donors by the number of donors from the start of your time frame, then multiply by 100 to get a percentage.

Apart from the donor retention rate, calculating donor lifetime value (LTV) and donor attrition rate helps you get an overall picture of your retention efforts. 

Donor lifetime value (LTV)

LTV gives you an approximate value of how much one donor may contribute to your organization through their lifetime. A simple formula to calculate LTV is:  

The metric can be used to prioritize donors you may want to focus on.

Donor attrition rate 

Donor attrition rate, often referred to as donor churn rate, is the percentage of donors who do not donate again over a specific period of time. Here’s a simple formula to calculate the same. 

The benchmark for a good attrition rate also depends on industry averages, so non-profits often compare their rates against similar organizations to evaluate their own performance. 

Why is donor retention important? 

Donor retention is of significant importance to nonprofit organizations for several compelling reasons:

• Cost efficiency: Acquiring new donors can be a costly endeavor—it requires resources devoted to marketing, outreach, events, and other donor acquisition strategies. Retaining an existing donor is generally more cost-effective than seeking out a new one.
• Donor lifetime value: A retained donor is more likely to continue to give over time, resulting in higher lifetime value. Donors who contribute over many years can be a more stable and predictable source of funding compared to the often one-time contributions of new donors.
• Fundraising effectiveness: A nonprofit that can maintain a high donor retention rate is typically seen as being more effective at fundraising. This can not only boost morale within the organization but can also make it more attractive to potential donors and grantmakers.
• Relationship building: When donors stick around, it indicates a strong relationship between the individuals and the nonprofit. These relationships can lead to increased engagement, larger gifts, and a more profound understanding between the donor and the organization's needs and goals.
• Advocacy: Loyal donors often become champions of your cause. They can play a crucial advocacy role in their networks, potentially drawing in more supporters, which amplifies the reach and impact of the nonprofit's mission.

Banking on your ongoing support 

Remember to choose the right donor management software, use donation tools, leverage corporate giving opportunities, do smart prospect research, and focus on getting recurring donations. Retaining donors is something many nonprofits fail to do properly. Put these strategies to use and you’ll be on your way to keep their support for years to come. 

Learn more about donor acquisition to help ensure that you meet your goals. 

This article was originally published in 2019. It has been updated with new information.