4 Reasons Why Your Nonprofit Should Emphasize Retention

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When it comes to a nonprofit’s donor base, some may typically think that acquiring new donors should be the most important goal they have. The reasons for this make sense on the surface level: nonprofits want to obtain more donors in order to raise more money.

But it’s actually not that simple. While obtaining new donors is, of course, a goal that every nonprofit should have, it shouldn’t always be the emphasis. In fact, retaining donors can bring about much more profitable fundraising campaigns and success. If you’re looking for fundraising tips, especially about donor retention, you’ve come to the right place.

So, what are the reasons that donor retention should be emphasized? We’ll cover the following topics:

  1. Donor acquisition versus donor retention
  2. Benefits of higher retention rates
  3. Benefits of having donor information
  4. Awareness and engagement

Focusing on donor retention can help your nonprofit reach its fundraising goals and fuel its mission. Without having this focus, your rate of return on outreach can actually be much lower.

Are you ready to take a closer look at the reasons you should focus on donor retention? Let’s get started!

1. Donor acquisition is more costly than retention.

Believe it or not, but it’s actually more difficult and costly to acquire new donors than it is to keep the ones you already have. Think about all the money you’ve put into outreach and prospect research, and what your return on investment ends up being after you’re finished. Now think about how that time could be better spent on cultivating the donors you already have relationships with.

For these reasons, focusing on donor retention can save your organization money and effort over time. Let’s look at this more closely:

  • Contact information. You already have existing donors’ contact information in your nonprofit CRM (constituent relationship manager), so reaching out to these supporters will be easier.
  • Connections. Past donors already have a connection to your nonprofit’s mission, so you can use this foundation to develop even more meaningful relationships with your donors. Reaching out to them regularly and encouraging them to get involved will more likely lead to successful asks.
  • Costs. It does cost more to acquire new donors. In fact, the cost of acquiring new donors can be 50-100% more than the dollars given by them. It can even be several years before nonprofits break even on dollars raised versus dollars spent on donor outreach.

As a result of the above, investing the same amount of money spent on new donors with existing donors instead can bring in a higher rate of return, as it will cost less to work toward retaining existing donors. Building on your connections with these donors will help build stronger relationships with them as well.

If you’re looking for the right CRM solution that can help you steward your existing donors, check out this list.

2. Higher retention rates lead to better fundraising totals.

It’s clear that retaining donors should be high on your nonprofit’s priority list. But it might not be as evident that higher retention rates can also lead to better fundraising.

How does this happen?

  • Larger donations. Building long-term relationships with donors leads these individuals to give large donations down the line that can help your organization the most. In fact, most major gifts are made after 5 years of an individual giving to an organization.
  • Lifetime value. Lifetime value is the total amount given over a donor’s lifetime. The lifetime value of an individual donor can add up to be thousands of dollars, and that doesn’t even take into account the hundreds or thousands of volunteer hours, in-kind donations, or other contributions they’ve made.

If you’re not sure where to start with building these donor relationships, you may consider hiring a fundraising consultant. Aly Sterling offers some great tips on hiring a consultant who can help you build stronger donor relationships and create strategies to raise more as a result.

3. Fundraisers will have access to the necessary data.

As we mentioned earlier, you already have your existing donors’ information in your nonprofit CRM. This is a great launching point to build relationships with your current donor pool. If you have their information in your CRM, your fundraisers will have access to what they need to raise even more.

For example, donor information can help your nonprofit:

  • Manage each donor journey. If you emphasize donor retention over donor recruitment and make your engagement strategies even better, you’ll ensure that each donor has a higher lifetime value.
  • Focus on individuals who are likelier to donate. Offering a personalized experience to the individuals who are already part of your nonprofit’s community will keep them connected and more likely to continue donating in the future.
  • Personalize outreach. Using your platform to personalize outreach to your current donor base (e.g., mail merge tools in your CRM) will help ensure that your donors have a good experience interacting with your nonprofit and feel valued as individual donors.
  • Contact donors at the most impactful time. Tracking previous outreach will help your nonprofit reach out to donors at the most impactful times when they are most likely to contribute.
  • Determine if the donors are eligible for matching gifts. You can use your donor information in your CRM to determine whether donors are eligible for matching gifts through their employers (typically based off of their work email address). Double the Donation offers some helpful insight into corporate matching gift programs and how they can help maximize your fundraising potential.

On the topic of matching gifts, nonprofits can actually use these to improve their donor retention. From sending a matching gift appeal immediately after a donation is made, to letting donors know when the matching gift is made, all of this serves to improve your relationship with your donors and increase the chances of them supporting you in the future.

Having the necessary donor information at your nonprofit’s fingertips can help build your fundraising potential. Personalized outreach and having the right focus on the right people will ensure that you work toward achieving your mission.

4. You can build awareness and engagement around your nonprofit.

One of the most impactful reasons to emphasize donor retention is the awareness and engagement you can build around your nonprofit by doing so. Both awareness and engagement are important because they help spread the word about your nonprofit and its mission, and also give you a chance to listen to your constituents.

Here are some key ways you can build on awareness and engagement:

  • Word-of-mouth promotion. Donors you have long-term relationships with are more likely to talk about your organization with their friends, family, and coworkers. Focusing on retention also helps cultivate donors who will give your nonprofit free word-of-mouth promotion.
  • Volunteerism. A donor that continues to contribute to your nonprofit is more likely to volunteer at one of your events, serve on your board of directors, and further promote your cause. Volunteering can also lead to your nonprofit receiving volunteer grants. Volunteer grants are given to nonprofits by companies based on the number of hours their employees volunteer at the nonprofit.
  • Feedback. You can also get helpful feedback from recurring donors as a result of your evolving relationship with them. A donor can offer suggestions or advice on how to improve your outreach, stewardship, and more. Actively listening to their suggestions will also help you gain their trust, and the cycle will continue.
  • Peer-to-peer fundraising. Using a fundraising platform that includes peer-to-peer fundraising as a part of its core services, like CharityEngine, will help further engage your donors and get them directly involved in your campaigns. Peer-to-peer fundraising directly calls on nonprofit supporters to fundraise on the nonprofit’s behalf, so taking part in this will make your donors feel valued and important to your cause.

When you actively include your existing supporters in your plans to fundraise, listen to them, and give them a great experience, you’ll be able to bring more attention to your cause. This is especially effective during campaigns, when you can incorporate peer-to-peer fundraising, and in times when you need feedback or advice.

Your nonprofit should emphasize retention because the payout, in the end, can be much more valuable than if you focus that same energy on acquiring new donors. That’s not to say acquiring new donors isn’t important. It certainly is and should be a focus of your organization to some extent. However, having an even stronger focus on retention can bring in more donors as a result of word-of-mouth promotion and other methods.

By including your current donors in your nonprofit’s fundraising efforts and cultivating your relationships with them over time, this can lead to major gifts and even stronger ties between you and them. Redirect your time and energy to donor retention, and you’ll be on your way to fundraising even more!

This guest post was contributed by CharityEngine.

Author: Leigh Kessler – VP, Marketing & Communications

Leigh Kessler is VP of Marketing and Communications at donor management software platform CharityEngine and a frequent speaker on branding, fundraising, data and technology. He is a former nationally touring headline comedian and has appeared on numerous TV shows including VH1’s “Best Week Ever”, CNN’s “Showbiz Tonight”, Discovery Channel & Sirius Radio.​ He has overseen and informed research and branding strategies for some of the most well known brands in America.