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Calculate your donor retention rate and get 3 ways to improve it

Having trouble attracting repeat donors? Keep your supporters motivated, invested, and excited to come back and give with this helpful guide to effective donor retention.

Rachel Ayotte
September 29, 2023
November 3, 2020
Nerd Mr Butter

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It’s easier and most cost-effective to keep your current donors than to find new ones. But retaining donors is no small task.

So how can you keep your supporters motivated, invested, and excited to come back and give? In this guide, we’ll give you three fundamental steps to retain donors.

How to calculate donor retention rate

Before you can jump into some major strategies, you’ll need to establish a starting point by calculating your current donor retention rate which can be found by dividing the number of donors this year by those that donated last year.

👉 Simply put, the donor retention formula is:

(Number of returning donors in year 2 ÷ Number of previous donors in year 1) x 100 = Average donor retention rate

This formula works with any group of donors you want to measure. You can also calculate your retention rate for past years, or use this formula to plan for the future. 

For example, if you want to keep at least 60% of your donors every year, you can crunch the numbers to see exactly how many donors you’d need to win over, and decide whether it’s a realistic goal.

What is donor attrition?

The flip side to your donor retention rate is your donor attrition rate, or the percentage of donors that your nonprofit organization loses from one time period of time to another. 

For instance, if a nonprofit has a 40% retention rate and 1,000 donors in year one, only 400 of those donors will donate again the next year. After five years, just 10 of the original 1,000 donors are left!

The good news? There are straightforward donor retention strategies you can use to keep your supporters around for the long haul.

3 fundamental donor retention strategies for nonprofits

Once you’ve crunched the numbers and found retention rates for your different donor segments, it’s time to act on your findings. 

1. Roll out the welcome wagon 👋

A welcome campaign is one of the best ways to establish a personal connection with first-time donors, a group that has some of the lowest retention rates.

A welcome campaign brings new supporters up to speed, introduces them to your community, and provides resources that help them understand the real-life impacts they can make with your nonprofit. Your campaign may could be:

  • A four-part email series ✉️ 
  • A direct mail fundraising letter and a small gift 🎁 
  • A few friendly text messages 🤳 

Whatever you choose, be sure to offer exclusive new donor content, like videos, e-books, infographics, and tool kits.

⏰ When to send: We recommend reaching out within the first 48 hours and staggering updates that lead up to a donation appeal over the following weeks. That way, your cause stays top of mind without overwhelming your new audience members.

2. Share impact stories and updates 💛

Be loud and proud about the impact of each dollar, whether donations saved one life, fed five families, or built 25 new schools.

There are many ways to do this:

  • Feature individual testimonials and demographic-level infographics on your social media pages. 😍 
  • Focus on one major takeaway in your thank-you messages and donation receipts sent through your fundraising software. 🙏 
  • Incorporate photos and videos of beneficiaries into your prospective and current donor communications. 👀 
  • Send out a year-in-review booklet with key statistics, goal progress, and organizational improvements. 📖 

Not only is sharing stories and metrics a fundamental part of good donor stewardship, but it also allows you to attract new supporters without high donor acquisition costs.

💡 Pro tip: When crafting your content, use donor-centric language. Instead of using first-person terms like “I,” “we,” “my,” and “our,” stick to “you” and “your.” For example, “You collectively raised over $75,000 to help 50 environmentally sustainable businesses hire, expand, and better serve your community through 2023.”

3. Create a feedback loop 🌀

Soliciting feedback is one of the best ways to improve donor retention rates. Talking with supporters helps you identify obstacles to donating and participating and makes existing donors and supporters feel valued and heard:

  • Send out an annual survey and incentivize answers with a raffle prize drawing or other perk. 📊 
  • Create a brief general survey and add the link to your donation confirmation emails, follow-up messages, and contact page. 📱 
  • Develop a few survey templates for different campaign types and audience segments so you can quickly customize and share them when you’re ready. 👈
  • Use brief surveys to keep donor information and payment details in your donor database up to date. 💌 

Feedback request is also an excellent “non-ask” follow-up to your fundraising campaign or event—it’s a natural way to continue the conversation without immediately jumping to a monetary ask. 

Bring donor retention strategies to life with Givebutter 

With an effective welcome campaign for first-time donors, compelling impact stories and messaging tactics, and a solid donor feedback loop, you’ll see steady growth in your donor network in no time. 

And with the right software—like Givebutter—nonprofits can streamline all of their donor retention strategies, fundraising efforts, and marketing campaigns into one centralized place, for free. 

Create a free account today →

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