Have you dared look at your final end of year numbers yet? Did you look at them through your hands with only one eyeball peaking out like you were watching a horror movie as if that would help prevent you from jumping out of your seat?
I know we’re way past Halloween, but those retention rates can be downright terrifying. Knowing damn well that you have to make up every lost individual gift that didn’t come in last year…and then some.
Yikes.
No matter how unpleasant the process is, it is absolutely critical for nonprofits to look at the retention rate of their donors as it is one of the best indicators of the effectiveness of their fundraising efforts and the engagement of their donor base. Additionally, high retention rates can lead to increased lifetime value of the donor and can be a sign of a strong, loyal and engaged donor base.
Have a high retention rate? Good. Donors are satisfied with their experience with you and your organization and you more than likely have a steady source of funding.
Have a low retention rate? Ruh Roh Raggy. You seem to be in the same boat as most nonprofits were in 2022. Maybe raised more money, but saw a critical loss in the number of individuals who gave. And that means you might have relied on a few big grants or big single gifts that aren’t guaranteed back which puts you on the clock to fill the pipeline of givers.
On average, the retention rate for yearly donors is around 50-60%. This means that about half to slightly more than half of donors who give in one year will give again the next year. And according to our friends at the Fundraising Effectiveness Project, the average decline was over 7% through Q3 in 2022.
Yes, the sector has been bleeding donors for well over a decade, but this is the fastest decline I’ve witnessed in the nearly 20 years of working in the industry.
And it somehow feels more chaotic.
However, we’re here to help per usual my friends! And since the internet search algorithm as well as folks on the internet like to click on outrageous claims and headlines, we’ve got the perfect solution for your nonprofit right here in this blog! I present to you:
5 Steps to Getting a 100% Donor Retention Rate for Your Nonprofit!
Buckle up – this is a doozy of a list!
Step one. Wake up from that dream you had about a 100% retention rate, because it's full fantasy nonsense.
Listen, you knew this was too good to be true. But the harsh reality, that maybe even some of your board members don’t exist in, is that there are plenty of folks who, in the heat of the moment, gave to your organization at an event, online or sent money over to a friend who had a birthday fundraiser on Facebook and you can’t get any information on them anyway. (Thanks Zuckerberg!)
So, let’s start with the fact that if you’re anywhere near the 50% retention rate, you’re in a fantastic position. And I realize that comparison is the thief of joy – but it’s nice to know where you stand in the crowded pack, so we can carve a path to move forward!
Also, it takes the pressure off to think that perfection is not expected. Right!? Ok ,so now that you have that first step down (feels good doesn’t it?) let’s rock:
Step 2: Let's try to reach 75% retention rate…and maybe stretch to 80% because, you're awesome
Math is hard, so why don’t we use easy numbers for this particular exercise. If you have 100 donors, you can safely assume that 50% have bought into your amazing mission. That means you really only need to focus EXTRA effort on 25 individuals. That’s not bad right!?
One of the things we as fundraisers don’t do well enough, is to compartmentalize some of our activities into manageable steps. The overwhelming feeling of an impossible climb to reach impossible goals is part of the reason we have so much burnout in this sector. But breaking down your goals and tasks like this? Way easier to knock out.
Take the list of your donors and go through them, thinking about how often you communicate with them, what you tell them, what you ask of them and really think objectively on who you know really well, and who you want to get to know better.
The latter should be getting your extra attention. Whether it’s a call, or a simple note – pay attention to the number of times you let them know you care and appreciate their gift throughout the year, not just during the “season of thanks.”
Once you have your list ready? Time to:
Step 3: Embrace the Grind...of coffee beans and meeting requests
You can’t control when people give you money.
You can’t control how much people will give.
But you CAN control how many meetings, calls, and impressions you have with your donor base, and that has a direct correlation to how many gifts you will get throughout the year.
The most important indicator of how well your retention rate will be at the end of the year is how much your organization is engaging with its audience, how many times they tell their story, and to how many people they tell it to.
Whether it’s one on one coffee meetings, speaking in front of service clubs, or asking your corporate or business supporters for some time to tell their employees what good you do in the community, your BEST course of action to increase the number of return donors to your nonprofit it to hit the streets and embrace the grind and hustle of field activity.
Whatever that number of meetings you think you can handle per week – 3, 5 or 10 – make sure you are consistent in being out from behind your computer. And as many face to face connections as you can make.
Speaking of that:
Step 4: Your Consistent Communication has nothing to do with asking for gifts
Did you know that you don’t have to ask for money every time you meet with a donor?
It’s true!
Doesn’t that feel better? Kinda takes the pressure off!
Posting about what you do, and the impact you make is much more important in building trust with your supporters than constantly barraging them with solicitation after solicitation.
They get it. You need money.
But your donors also have an interest in what their previous gifts have done, and if you’re not spending time hammering the phone just to say “hi” or to update on these audacious projects you’ve been talking about for awhile, you’re missing an opportunity to connect on a deeper level than just transactional gifts.
Communicate as much as possible without being annoying.
How do you determine that? Scroll through your email or social media feeds. If there’s an organization or business that is just CONSTANTLY posting with no purpose or relevance to you, and it gives you that icky feeling of “my God, just please stop” in your stomach?
Avoid that.
But picking a few days a week so that your audience begins to expect and enjoy the content you provide? Picture perfect sort of cadence.
However, there’s one more suggestion:
Step 5: Speak a LOT.
Inevitably you’ll see the gap close on your retention rate with all these previous hot tips. And that’s the ultimate goal. But, then you are still left with the need to recruit more eyes and ears to your mission.
Here’s the best way to do that: Get in front of larger audiences to tell your story. That way you have a good funnel system to add to your supporter numbers in order to make up for the 25% that will inevitably leave your donor list this year.
That means getting on podcasts, talking at conferences that are relevant to your field of expertise, or sitting on a panel with other organizations in your community to expose your story to more folks.
Yup. It’s a bit more work than just sending a tweet, or rage posting on a local newspaper’s social feed, but a helluva lot more effective.
Show off your passion for the mission. Show off the impact you’ve already made.
And know that each one of these tips will bring you a lot close to a retention and acquisition number that makes for a more stable nonprofit when it comes to funding - as you become more proactive than reactive in this long term fundraising game.
Still need help!? Don’t you worry! Connect with us at DoGoodBetterConsulting.com, and we’d be happy to craft a fundraising game plan that is customized for the size, scale and scope of your mission!
You got this!!
-Patrick