{"id":26896,"date":"2021-08-26T09:36:35","date_gmt":"2021-08-26T13:36:35","guid":{"rendered":"https:\/\/www.qgiv.com\/blog\/?p=26896"},"modified":"2024-11-24T19:34:27","modified_gmt":"2024-11-25T00:34:27","slug":"why-is-donor-retention-rate-so-important","status":"publish","type":"post","link":"https:\/\/www.qgiv.com\/blog\/why-is-donor-retention-rate-so-important\/","title":{"rendered":"Why is Donor Retention Rate So Important?"},"content":{"rendered":"
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\"Headshot<\/a><\/figure><\/div>\n\n\n

Darrell Law is the VP and Chief Growth Officer at Infinity Concepts. He’s a 20-year veteran leader of a multi-campus megachurch and international television and radio broadcast ministry. Darrell specializes in maximizing results out of limited resources. Whether developing fundraising strategies, creating donor retention programs, launching humanitarian outreaches on the other side of the world, or implementing marketing and assimilation strategies to grow a local church, Darrell\u2019s passion is to help clients achieve their goals and fulfill their mission. <\/em><\/p>\n\n\n\n

Acquisition of new donors is a critical piece of any healthy fundraising program. Your organization will always need a steady stream of fresh new donors, but what about your existing donors? Research consistently shows that it almost always costs more to acquire a new donor than it does to retain an existing donor, making your donor retention rate a very important metric to track. It\u2019s vital to nurture your relationships with existing donors with an eye toward retaining them as donors. <\/p>\n\n\n\n

What Is Donor Retention Rate? <\/h3>\n\n\n\n

Your donor retention rate is an indicator of how well you\u2019re handling donor relationships. It\u2019s the measurement of how many donors continue to make donations to your organization year after year. <\/p>\n\n\n\n

Unfortunately, across the nonprofit sector, donor retention rates are low and continue to get worse. According to the Fundraising Effectiveness Project<\/a>, the average donor retention rate was 43.6% in 2020. Less than half of all donors gave again following their initial gift. That\u2019s the lowest rate since the Fundraising Effectiveness Project started tracking retention data. <\/p>\n\n\n\n

If you have a high donor retention rate, then it indicates you have a loyal base who believes in what you do. A low retention rate signifies you need to do a better job engaging<\/a> and keeping your donors. You should immediately find out the cause. <\/p>\n\n\n\n

Without sustained donor retention, nonprofits cannot effectively grow. <\/p>\n\n\n\n

How to Calculate Donor Retention Rate <\/h3>\n\n\n\n
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  1. Generate a list of donors from 2020 and determine the number of unique donors. <\/li>\n\n\n\n
  2. Of those 2020 unique donors, how many gave again in 2021? <\/li>\n\n\n\n
  3. Calculate the percentage of donors from 2020 who renewed in 2021. Specifically, take your answer to #2 and divide by your answer to #1, then multiply by 100. For example, let\u2019s say you had 2,000 unique donors in 2020 and of those donors, 876 gave a gift in 2021. [876\/2,000 = .438] X 100 = 43.8% retention rate. <\/li>\n<\/ol>\n\n\n\n

    Ways to Boost Your Donor Retention Rate <\/h3>\n\n\n\n
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    1. Offer Recurring Gift Options<\/strong>\u00a0\u2013\u00a0Recurring gift options\u00a0give donors the opportunity to give\u00a0on a regular basis through auto debit. Be sure your online donation forms and direct mail reply forms give an opportunity for a recurring gift.\u00a0<\/li>\n<\/ol>\n\n\n\n
      \"The<\/a>
      The Armed Services YMCA makes it easy for supporters to set up monthly giving with one quick addition to the Qgiv donation form.<\/figcaption><\/figure>\n\n\n\n
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      1. Thank Donors<\/strong> \u2013 You should thank your donors as soon as possible after you receive their donation. The confirmation screen is helpful, but go an extra step and mail an acknowledgment letter that expresses your appreciation and shares how their gift makes an impact. <\/li>\n<\/ol>\n\n\n\n
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        1. Offer Different Ways to Give<\/strong> \u2013 Besides the traditional way of mailing in a check, invest in software that offers online donation forms, text giving, a PayPal integration, etc. <\/li>\n<\/ol>\n\n\n
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          \"A<\/a>
          Remnant Church makes tithing easier by offering a way to give via the Givi app.<\/figcaption><\/figure><\/div>\n\n\n
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          1. Communicate Regularly and Use Multiple Channels<\/strong> \u2013 Donors should regularly hear from you, so they know what impact is being made through your organization\u2019s efforts. Be sure to use all your channels to communicate with your donors and followers: direct mail, social media, and email. Monthly communication is a good frequency for direct mail and email, and at least three posts per week on social media<\/a>. <\/li>\n<\/ol>\n\n\n\n
            \"Screenshot<\/a>
            Pet Alliance of Greater Orlando could offer a masterclass in supporter engagement. Not only are they great at social media, but they’ve done an amazing job of keeping supporters updated through email during the pandemic.<\/figcaption><\/figure>\n\n\n\n

            Final Thoughts<\/h2>\n\n\n\n

            The average recapture rate of lapsed donors is 5%. If donors stop giving, the chances of them ever giving again are very small. This is why it\u2019s so important to retain your donors. Ready to learn more? Check out these additional resources to help improve your donor retention rate: <\/p>\n\n\n\n