Why retention matters for your nonprofit sustainability
Is retention on your radar?
My guess is that’s there, but this time of year is all about donor acquisition.
Maybe it’s one of those things you promise yourself you’ll “get around to” someday. Maybe you want to include it in your annual fundraising plan but you’re not sure what that looks like or what that even means.
Let’s start from square one. What is retention?
Retention measures how many donors return each year to give another gift.
Did you know 80% of first-time donors will NOT give to your organization next year? That means only 20% stick around. What!?!!? You NEED those donors.
You want your donors to give and again, don’t you? How can your nonprofit be sustainable without returning donors? Today, we’re going to walk through some steps you can take to help you improve retention.
What you need to know about retention
1. Retention costs less than donor acquisition.
I know you’re probably stressing out about creating content, spreading the word on social media, and bringing in as many new donors as possible. But did you know it costs more to bring in new donors than it does to keep them coming back?
In fact: it costs about five times more to acquire one new donor than it does to retain a donor.
According to Fundly: ”nonprofits tend to spend two to three times more recruiting donors than those donors will give through their first, and possibly only, donation.”
2. Retention brings in more value over time.
Research shows that a 10% increase in donor retention can raise the lifetime value of a nonprofit’s donor database by 200%.
Here’s an example from Nonprofit Pro:
“Let’s just say your organization acquires 1,000 new donors in one year. If the donor retention rate is 40%, as is about average, only 400 of those donors will donate again the following year. By year five, only 10 of your original 1,000 donors will remain and continue to give.”
Filling the gap with new donors ends up being really costly—it’s a significant time and money investment. But retention means you’ll have less of a gap each year.
3. Retention gives your nonprofit room to grow.
Retention isn’t just about keeping your organization’s pockets full: it lets you grow and expand your impact. Less time and money put towards donor acquisition means more space—for you to connect with your donor base, build on your programs, and scale your impact.
What’s more: when you have recurring donors, you’ll be able to invest in employees and grow your team.
How can you improve retention?
1. Collect feedback.
Don’t be shy to ask for replies (and don’t hide it in your PS alone). Send a short email with a sentence or two and ask an open-ended question about how things are going. Prompt responses from your top donors, asking for feedback about anything from email content to thank you letters.
Aside from asking individual donors directly, you could do a mini-email campaign soliciting survey answers. Constant Contact lets you do a poll within your email. Or you could set up a longer survey with Google Forms or Survey Monkey. Even better: ask for feedback when you connect with your donors over the phone (what better way to check a phone call off your list!).
2. Do SOMETHING with the feedback.
First, keep a running list of email replies, so you can do something about the feedback and better serve your donors.
Here’s an example:
Let’s say you get a couple of responses from your last email. One donor replies and says she LOVED your blog post about the gender wage gap; we’ll call this donor Sally. Another donor (we’ll say “David”) felt inspired by the video. He asks if there’s a way to volunteer.
Here are three actions you can take from those responses:
Tag or note each donor’s preferred medium
Does your email program allow you to tag or categorize individuals? Make the most of this feature.
Reading between the lines, Sally’s compliment of your blog post tells us she enjoys reading (or at least skimming) blogs. When David said he felt inspired by your video, that means it can’t hurt to assume he enjoys consuming video content. Tag them accordingly.
Then, In the future, if you’re deciding between sending a blog post or video with the same exact content, why not make sure Sally gets the blog post and David gets the video?
On a small scale, this sounds tedious. But EVERY bit of information you can collect from your donors can influence how you communicate with them and shape your relationships with them as time goes on. You don’t have to avoid sending blogs to David; just collect the information so you can target communications as time goes on.
Share relevant content with your donors
If your blog post on the gender wage gap is something that resonated with Sally, chances are it will resonate with others too. Whenever a donor is inspired or moved enough to reply to your email, make note of it and start collecting articles and podcasts and blog posts that come up within that category or topic. Then you can make sure you’re serving your email subscribers with content they care about.
Adjust future messages
The video you shared got David excited enough to offer up his time and volunteer (AMAZING). Now you know if you’re sharing that video in the future, you may want to include a link to your volunteer sign-up page. Or, maybe add “Ways to Volunteer” as one of your emails or blog posts in the future.
Source: Camp Fire
We just served our donors with new content in three new ways—all from two email messages. Imagine how much information you can glean from a survey!?!?!?? Holy smokes. The possibilities are truly endless.
Keep track of feedback
I know gathering and recording feedback is easier said than done. Let’s start a couple of simple systems:
Make a folder in your inbox where you save email comments and replies. Set a reminder in your calendar in a couple of months to check the folder.
Create a Google Sheet to track comments, content, and ways to take action. (Save this somewhere safe so the sheet doesn’t end up in your void of a Drive).
Donors need to feel heard and appreciated. When you take their feedback and do something about it, you’ll help them feel more connected to your organization. Take action from feedback to better serve the rest of your donors.
3. Communicate with donors at least once a month.
Why do we send SO MANY EMAILS at the end of year, but go silent every other month!?
HOLD MY COFFEE. That is NOT how you retain donors. If your communications are sporadic, your donors will—at best—start to lose trust in you. At worst? They’ll lose interest in your work or forget about you altogether.
So please for the love of fresh beans: communicate CONSISTENTLY. Which brings us to our next step:
4. Connect more than you ask.
How do you feel when you only receive sales emails in your inbox? I’ll tell you how I feel: A WHOLE LOT OF YUCK. When I’m in my inbox, I don’t want to be spammed. I want to find value.
Guess what? That’s how your donors feel when you only reach out when you’re asking for something. Make sure you’re prioritizing relationships first and foremost. Everything from phone calls to coffee dates to emails should be centered on building those lasting connections.
5. Make donors feel appreciated.
Get creative on how you show appreciation to your donors. Gratitude can go beyond an annual gala or post-gift thank you letter. You might:
Share a thank you video from someone they helped
Record a thank you video from you/team member
Send handwritten thank you notes (get your team or board members to help!)
Share an infographic about their gift’s impact
Show donors some love and appreciation more than once a year. Their generosity is meaningful YEAR-ROUND.
Retention leads to Sustainability
Likes and follows on your social media can often turn into vanity metrics. Retention, however, is NOT a vanity metric. It’s a measurement of the sustainability of your nonprofit. Give retention the attention it deserves.