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Boosting Your Donor Retention Ratio

Donor retention is as much of a hot topic in the nonprofit world as celebrity scandals are in the pop culture world.

For every nonprofit organization out there, regardless of shape and size, the most important thing is retaining donors. In a perfect world, supporters would come back repeatedly to give for your cause, but we know realistically, that’s not always possible.

Unfortunately, judging from the donor retention statistics available to us, the situation looks pretty grim. The Association of Fundraising Professionals (AFP) established the Fundraising Effectiveness Project to research on fundraising effectiveness. From 2007 to 2017, the retention rate fluctuated around 45%, and by the end of 10 years, there was no difference in the number of donors.

Professor Adrian Sargeant, Director of the Centre for Sustainable Philanthropy at Plymouth University, claims that about 70% of people who are recruited into organizations never come back, and many nonprofits end up spending a lot of money to maintain basic operations.

Why is this bad? Because declining retention rates can have a dramatic impact on your funds. Suppose you start with 1000 donors, and you lose 40% of your donors every year. By the end of the first year, you will have 400 donors. By the end of the second, you will have about 64%, and by the third, only ten percent.

Imagine how that translates into dollars and cents. The scenario looks pretty grim, doesn’t it?

But how do you manage to get your donors to stick around? Studies show that some of the main reasons donors stop giving include: not being able to afford it, feeling like others are more deserving, or because the services and communication they received were poor quality.

What should you do to get out of the retention slump?

Tracking of retention rates is essential – staying updated on the status of your organization’s retention rate is the first step in improving it. You can’t solve a problem if you’re not aware of it. If you notice a regular donor has not donated in a while, you can also reach out to them to inquire about it.

Donor stewardship programs can help. Building your donors’ loyalty may require time and money, but it will pay off in the long-term.

Establishing multiple donation methods also helps with convenience. Nowadays, everyone is busy; nobody is going to go looking for ways they can pitch in. You’ll have to present it to them if you want them to stay.

Finally, adopt a rule of transparency. Your donors aren’t going to come back if they are not happy with how the money is being utilized. Notify donors about the impact their donations are making, and make sure to reach out to your donors to let them know exactly how their contributions helped someone in need.

Of course, you can’t expect all your donors to keep returning. People are inevitably bound to leave for multiple reasons. Don’t let this dishearten you, and work towards holding on to the remaining donors as well as finding new ones.

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