[GUEST POST] 3 Donor Retention Mistakes You Might Be Making

Picture this: You spend hours engaging and cultivating a new donor, and you’re thrilled when the donation finally comes in. After sending out a personalized thank-you note, you take some time to pat yourself on the back. You’ve built a relationship with this donor, and you should be proud.

But when they don’t donate again next year, you’re left confused. What did I do wrong?

Low donor retention rates are one of the most frustrating things a fundraiser can experience. Building real relationships with supporters is a huge investment — in organizational costs, time, and emotion. Putting in all that work only to watch those supporters walk out the door can make you feel defeated.

This scenario is all too common, but let’s look at the facts. What does the donor data tell us?

Donor Retention: By the Numbers

According to the Fundraising Effectiveness Project, retention rates have averaged less than 50% over the last 10 years.

While the sector has seen overall growth in donors, a 2016 study showed that for every 100 donors gained, 96 were lost through donor attrition.

(Source: Donor Management Solutions to Improve Donor Retention, NeonCRM)

Even worse, smaller organizations are hurting the most. While the sector’s largest organizations continue to see higher-than-average growth in donors, the smallest organizations are losing supporters each year.

No matter your organization’s mission or budget, donor retention is something we’re all up against. Luckily, there are some action items you can take to improve your organization’s performance.

Donor Retention Mistakes (and How to Fix Them)

Here are 3 donor retention mistakes you might be making — and the strategies you can use to get your organization back on track.

1. Not making donors a part of your team.

Fundraisers tend to think of donors as external to their organization.

But to prioritize donor retention, we need to think of donors as part of our team.

Donors are like an extension of your nonprofit’s staff, or even your board. Like you, they make an investment in the organization’s mission — and like you, they care about the organization’s successes and struggles.

When you communicate with donors, remind them how critical their contributions are to the organization’s mission. Let them know they’re part of the team, and you’re all working toward the same goal. Then when you need them, they’ll be more likely to step up to the plate and help out again.

2. Not paying attention to your donor data.

As a fundraiser, the donor data you’re already tracking is the key to donor retention.

Do you know what your organization’s retention rate is?

How about the average gift size? How has that changed in the last few years?

Donor insights like these are so important, and they allow you to create a more effective fundraising strategy. Here are some examples of insights you might see:

  • Retention rate too low? Consider creating a recurring giving program.
  • Growth in donors low? Consider launching an awareness campaign or a peer-to-peer fundraising
  • Retention rates high, but average gift/overall giving low? Consider creating customized ask amounts or giving levels to encourage higher gifts — or introduce a major gifts strategy.

Not sure where to start? At the very least you should be tracking the 14 Fundraising Key Performance Indicators (KPIs) as defined by AFP.

While not all metrics may be relevant to you, these core KPIs will give you a good sense of your organization’s overall health.

3. Not using the right tools to retain donors.

When it comes to building relationships with donors, you’re going to need more than post-its to keep track of every supporter.

And while Excel spreadsheets can help you list out supporters or donations, you’ll want a true donor management software system to help you keep track of all the interactions you have with supporters.

Whatever platform you choose, be sure to look for something that lets you track multiple pieces of data in one system. This saves you valuable time by allowing you to manage several things (communications, donations, tasks, etc.) in one place.

A better approach to data leads to better relationships. Prioritize getting organized, so you can continue to engage donors and build those relationships more efficiently.

We’re confident that these tips will help your donor retention strategy, but remember that every nonprofit is different. Donor retention is all about building better relationships — so make sure whatever strategies you implement are right for your donors and your organization.

by Andrew Dain, Inbound Marketing Specialist, NeonCRM.®

Andrew is an Inbound Marketing Specialist at NeonCRM. He writes about innovation and technology in the nonprofit sector.

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