The 60-Day Blueprint for Boosting Donor Retention
Welcome, philanthropy enthusiasts and nonprofit leaders! This blog focuses on an essential yet often overlooked component of nonprofit fundraising strategy – new donor retention. Donor retention measures how many donors from one year give again in the next. It’s a must-track key performance indicator and it’s one your nonprofit should invest in increasing. Why? Let’s throw it back to high school algebra for a story problem:
Organization A welcomes approximately 250 new donors a year, with an average gift of $25. Their retention rate is only 10% but for the 10% who make a second donation, the average gift size increases to $75. This is an additional $1,875 annually. If they increase their retention rate to 20% or 30%, how much more could they potentially raise?
We won’t make you do the math; that’s just cruel. If Organization A could increase their retention rate to 20%, it would bring in $3,750. Reach a 30% retention rate and the organization could see $5,625. Now imagine the power of higher retention over multiple years - it’s like compound interest that builds on itself.
So why is new donor retention so important?
Because we know that statistically, if someone makes a second or third gift, they are much more likely to stick with you and continue giving over the long term. So specific interventions for first-time donors to secure those second gifts are among the highest ROI activities for nonprofits at any point in their organizational lifecycle.
The key to the second gift is the crucial 60-day window after a first-time donation. With end-of-year giving and campaigns typically being a strong lever for new donor acquisition, it's easy to know when to focus on stewardship for retention to grow your donor base; in February for those new end-of-year donors and 30 to 60 days following the wrap up of a campaign. Look at your specific fundraising calendar to identify other times specific to your organization.
Understanding the Challenge of Donor Retention
Recent insights, such as those from Blackbaud's 2021 Charitable Giving Report, reveal a concerning trend in donor retention rates. Only 23% of new online donors and 29% of offline donors contribute a second gift within their first year. One-time donors are an unfortunately common occurrence. But if you adopt a focused approach to new donor stewardship, you should see a significant increase in retention.
A Five-Step Donor Stewardship Plan to Elevate Retention Rates
Common Great encourages everyone nonprofit we consult to have a solid plan in place for stewardship of new donors. What does this look like in practice?
Prompt Acknowledgment (Within 48 Hours of the First Gift): Prioritize sending a personalized thank you letter immediately. This is a fundamental aspect of donor stewardship, making donors feel valued and recognized.
Communicating Impact (8-15 Days After Donation): Key to any nonprofit fundraising strategy is showing donors the tangible impact of their contributions. This reinforces their decision to support your mission and encourages ongoing engagement.
Fostering Donor Affinity (16-30 Days After Donation): This period is crucial for deepening the donor's connection to your cause. Share relevant stories and updates, emphasizing their alignment with the donor's interests.
Engaging and Soliciting Feedback (30-45 Days After Donation): Actively involve donors in your mission. Encouraging feedback or offering volunteer opportunities can significantly enhance donor stewardship.
Securing the Second Donation (45-60 Days After Donation): After nurturing the relationship, make a well-timed second donation request. A donor who's more informed and engaged at this stage is more likely to continue their support.
Leveraging Automation for Efficient Donor Stewardship
The good news? You can streamline much of this with automation. Utilizing workflows and drip campaign tools to automate these engagement steps can help ensure a consistent and efficient approach to donor stewardship. We love personalized touch-points, but staffing capacity doesn’t always allow for each communication to be handcrafted.
One of our favorite automations to use is a new donor welcome series following the above outline. When a first-time donor gives, making a lasting impression and building a solid foundation for a fruitful, lasting relationship is crucial. If your organization's initial interaction with a new supporter is delayed or limited to sporadic fundraising campaigns, you'll miss out on the benefits of a well-crafted welcome series. Intrigued? Check out Common Great’s Automated Welcome Email Series Package.
Donor Retention Costs Less Than Donor Acquisition
As you weigh the pros and cons of building a more robust donor retention plan, here’s the data point you need to put at the top of your “pro” list. It costs about five times more to acquire one new donor than it does to retain a donor, and nonprofits tend to spend two to three times more recruiting donors than those donors will give through their first, and possibly only, donation.
Tailored Strategies for Improved Donor Retention
Ultimately, a customized 'second gift' plan is crucial for your nonprofit. Each new donor is a vital part of your nonprofit's impact. By prioritizing new donor retention and implementing strategic donor stewardship, we can make every contribution count and drive lasting change in our communities.
At Common Great, we specialize in creating targeted donor retention strategies that fit your unique needs. Visit commongreat.us for a free consultation, and let's work together to achieve remarkable retention rates. Here's to a future of robust donor relationships and successful nonprofit missions!
At the end of the day, it’s about building relationships
Retention is about keeping donors engaged enough not to leave. Effective stewardship, prompt thank yous, and occasional updates do the trick for many repeat givers.
But loyalty goes deeper. It means supporters actively feel connected to your mission. Loyal donors:
Look for opportunities to give more/more often
Promote you without being asked
Provide insight to improve programs
May include you in their estate planning
Building true loyalty takes more intentional relationship-building. Thanking and updating supporters is the starting point. But you must also:
Make donors feel welcomed and valued
Demonstrate their money makes an impact
Provide varied ways, beyond donating, to get involved
Encourage two-way dialog to hear their thoughts
Turning retained donors into loyal advocates takes strategy, sincerity, and effort. But it fuels stability through recurring gifts and is worth every minute spent on stewardship. Go forth with Common Great’s 60-Day Blueprint for Boosting Donor Retention and build those lasting relationships to fuel your mission!
