GivingLoop Blog
Home » What is the Definition of Donor Retention and Why is it Important?

What is the Definition of Donor Retention and Why is it Important?

What is the Definition of Donor Retention?

A literal definition of donor retention would be the ability to keep donors around for longer than a single interaction. The term ‘donor retention’ is also used to explain a fundraising strategy where nonprofits aim to get gifts from all existing donors.

Why is Donor Retention so Important?

The general idea of retaining donors is that it reduces the time, effort, and money that goes into acquiring new donors. However, here are a few reasons why donor retention is so vital for nonprofits.

A Sense of Security

When you have a steady donor base, you also have a good sense of security. You know that if your donor acquisition plans don’t pan out the way you want them to, you still have something to fall back on. This is a great thing in terms of nonprofit sustainability.

Bigger Donations

First-time donors rarely give a big gift. If you want to look for major donations, you will want to need a donor with who you can build a substantial relationship over time and get them involved in your organization enough to want to give a major gift.

Retained donors will have that sentimental attachment and trust needed to give a larger gift than first-time donors which is why their gift may be more substantial when compared to new donors.

They Add Value to Your Organization

Donor retention means that your organization has valuable connections with people who are genuinely interested in your cause. This means they will be willing to help promote your organization and its events, potentially help recruit new donors, and also volunteer for organization activities.

Shared Donor Knowledge

Data is the backbone of any given organization. Attaining relevant, helpful data about donors who have chosen to stick around and support your organization will help you in using your strengths as ways to attract and recruit new donors. Conversely, you will also be able to identify gaps in your abilities and work on them through the input given by your current donors. Fresh donors may not be as inclined to respond to surveys or give feedback the same way donors who have been around for a longer period of time would be.

It is a Sign of a Successful Organization

A high donor retention rate is a great metric for success in a nonprofit organization. Given that most if not all nonprofit organizations rely heavily on donors to fund their day to day operations and causes, having a low donor retention rate usually gives out the impression that the organization is not substantial enough for people to stick around and donate more.

Given how important it is for organizations to keep donors around, donor retention strategies should be at the forefront of every organization’s policy.

More impact