Community Brands recently shared donor retention data that reinforced alarming trends that the nonprofit sector has been monitoring for a while. In their survey, they asked nonprofits what their current donor retention rate was: about 60% said they didn’t know and the rest had an average donor retention rate of 45%. On average, donor retention rates increase based on the average gift amount. For donors who give gifts under $100 the average retention rate is 25%.
Donor retention merits priority treatment. On average, it costs five times as much to acquire a new donor compared to keeping existing donors.
The solutions to improving donor retention aren’t rocket science. They are the foundation of sound stewardship which is genuinely acknowledging and thanking donors for their precious gifts of time and money.
As a fundraising trainer/consultant who’s had the privilege of working with a wide range of nonprofits and a diverse group of professional and volunteer nonprofit leaders, I want to highlight ten pragmatic ways that nonprofit leaders can more effectively keep donors happy and even increase the gifts that fuel their missions. These are based on proven principles of the art and science of fundraising, innovative strategies, and best practices.
Here are 10 easy ways for small and mid-size nonprofits to retain their new 2023 donors:
1. Acknowledge and thank donors swiftly and enthusiastically.
If you have the bandwidth, go beyond the traditional form letter and make thank you calls as soon as possible — ideally within 24 hours. This is especially important for first-time gifts or to donors who have significantly increased the size of their gifts.
2. Ask board members to make stewardship calls as well.
Staff might be paid to lead stewardship activities but calls from board members will be an unexpected treat. This is also a good way to engage board members who are reluctant to get involved in the fundraising processes. A lot of times these calls will result in voice-mail messages, but that’s okay because the message will still leave a strong impression.
3. Communicate clearly and consistently on what’s being achieved with gift dollars.
I like monthly e-newsletters that combine brief stories and compelling photos. An essential requirement is fiercely maintaining a consistent and disciplined distribution schedule like the first or last week of the month.
4. Promote monthly giving.
As our esteemed colleague Erica Waasdorp, President of A Direct Solution, is quick to point out: a monthly giving program has the power to nearly double your retention rate. Be sure to highlight monthly giving options on your website, marketing material, and especially in donor conversations.
5. Send mission impact videos.
It’s amazing the results that are possible from phones and other smart devices. There’s nothing like showing the mission in action. These videos can have a huge impact.
6. Host donor recognition events.
There is a lot of positive energy when you bring donors together and they have the opportunity to share personal perspectives on supporting the mission and forge friendships which concretely benefit nonprofits.
7. Highlighting donor gifts on social media.
Photos typically catch more attention. Can you show donors with the recipients of their generosity?
8. Celebrate “donorversaries.”
Sending a card, email, or other message marking donation milestones since the first gift, such as one year, two, five years and so on, makes a difference. Experts emphasize the huge importance of getting donors to support you for a second year in maximizing lifetime donor value.
9. Send handwritten notes.
They don’t have to be fancy or long. You receive plenty of form letters and email, but how many handwritten notes do you receive through the mail? This will definitely help your organization stand out in the donor’s mind.
10. Share highly personal gifts of appreciation.
I’m not a fan of giving away coffee mugs, pens, and other items that most people will complain they don’t have a place for, but little touches like dropping off freshly baked cookies will produce smiles and fond memories.
Note that none of these strategies are very expensive and most small and mid-size nonprofits should be able to carry them out. These and other ways are designed to convey to donors that they are truly the most important people in the world to us. And there is a bigger picture at stake. While American philanthropy totaled an awesome $485 billion, for the first time in nearly two decades, only half of U.S. households donated to a charity. Donations to charitable causes are reaching record highs, but the giving is done by a smaller and smaller slice of the total American population. As recently as 2000 the share was about two- thirds of American households. Donor retention will play a critical role in turning around this disconcerting trend.
You can use our free donor retention calculator to visualize how your donor retention rate can impact your fundraising revenue.
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