Understanding and Calculating Your Donor Retention Rate

Bryan Halverson

Published:

June 14, 2022

Contents

Fund vs standard accounting
Best Practices

Donor retention is a critical component of fundraising. But what does it mean and why should you care?

If you have a high donor retention rate, it means more people are sticking with your organization through thick and thin—and this helps ensure sustainable growth in donations. In the long run, it’s essential for your nonprofit organization to have a high donor retention rate.

Retaining donors is important because it helps nonprofits maintain a steady stream of donations from one income into perpetuity without relying heavily on fundraising efforts for new donors. This article will explore what donor retention means, how nonprofit organizations measure it, why nonprofits should be concerned about donor attrition, and strategies for increasing donor retention rates within your organization.

What Is Donor Retention?

Simply put, donor retention refers to your ability to turn donors into repeat donors over a given period of time—typically year over year. Your donor retention rate is the percentage of donors who keep giving to your nonprofit over time.

Not everyone who starts donating will continue giving indefinitely. Donors tend to come in waves. One donor may donate for six months before taking a break; another may give once and never return.

The current average donor retention rate in the United States isn’t great. The Fundraising Effectiveness Project cites that the average retention rate is just under 44%, and according to Giving USA, the average annual donation is just $737.

Retaining donors is becoming increasingly difficult as time goes on, so it’s important for organizations in the nonprofit sector to get ahead with good donor retention strategies sooner rather than later.

The Golden Rule of Donor Retention Rates: Be Relevant

The golden rule when it comes to donations is that if you offer something relevant, and if your nonprofit understands what is perceived as meaningful for the individual donating, people will continue giving again and again.

How Do You Calculate Your Organization’s Donor Retention Rate?

Calculating your organization’s retention rate is a relatively straightforward task. To do so, divide the number of donors who have given in the past 12 months by the total donors who donated at least once during that period to get a percentage. This percentage will show you how likely it is for an individual to give again over time, and that number can be compared against benchmarks like industry standards or national averages within your sector.

Why Donors Keep Giving

We all know people are busy these days—with work, school, other associations they belong to, etc.—which puts nonprofits in a difficult spot when trying to find ways of retaining donations going forward. But there are some successful strategies for increasing donor satisfaction while making it easier for people to keep giving.

How to Build Donor Relations

So how do nonprofits retain donors? To build a loyal donor network and keep your retention rate high, you need a solid strategy to engage donors. Some ways nonprofits can make their donors feel more appreciated include public acknowledgments, thank you letters, email campaigns, events that celebrate your volunteers, or thoughtful gifts like flowers, wine, a box of chocolates, or a fruit basket along with a sincere message. Be sure to provide written feedback about what is working well so donors know how they’re impacting your work as an organization.

Strategies and Tips to Increase Donor Retention

Be specific about what you want from your supporters—whether that means donating monthly, volunteering regularly, providing one-time services, such as proofreading copy, or providing office space.
Offer incentives for existing donors who give over time, such as providing exclusive access to special events that will only be available to recurring monthly donors. These types of incentives can make donors feel valued and appreciated by the nonprofits they support.
To engage potential donors and build momentum early on so people have an opportunity to see what it feels like to donate, you may consider offering an upfront incentive. If your organization sells goods, for example, you could offer first-time donors 20% off today’s purchase when they donate at least $100.
Consider adding a “Donate Now” button to your email marketing messages. This will make it easy for donors to contribute when they receive an email from you.
Encourage your retained donors to recruit other members of the community—such as friends, family, and coworkers—to learn about your organization and get involved by donating along with them.
Create a personal connection between your nonprofit and its audience through different types of content, such as testimonials, volunteer stories, videos highlighting progress made toward achieving goals set forth in strategic plans, and success stories.
Connect with donors on social media.
Send personal thank you notes after each donation or celebrate donors with a thank you video.
Thank your donors by including them in newsletters, blogs, social media posts, or other content on your website that shares the impact of their contribution with others.
Be transparent about your budget so people know where every dollar goes.
Offer membership levels and exclusive benefits for higher donations.

How to Retain More Donors and Increase Donor Engagement

Healthy and thriving nonprofit organizations know the value and importance of acquiring donors and retaining them. While first-time donors are valuable, it is imperative to make existing donors feel connected and engaged with your mission. Successfully re-engaging lapsed donors is important as well.

To make these tasks more attainable, Aplos has created a solution that will help your nonprofit engage and retain current donors while helping you acquire new donors. This intuitive software makes it easy and efficient to manage donors, fundraise, track donations, plan events, and much more.

See why over 40k nonprofits trust Aplos for their donor management and fundraising needs.

Free Recorded Webinar: The Science and Art of Donor Retention

When it comes to donors, you don’t just want that initial monetary gift. While it’s nice, it’s not nearly as beneficial as a monthly donation from an engaged benefactor. In this webinar, we discuss how to retain donors after they convert the first time, as well as donor retention strategies to keep your donors active and supportive. These tips will help your organization even if you do not currently use software for donor management.