Top 5 donor retention strategies for nonprofits

It’s easier and more 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 outline five fundamental steps to retain donors.

What is the formula for donor retention rate?

👉 Simply put, the donor retention formula is:

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

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How to calculate donor retention rate 

To better understand donor retention rate, let's break down the formula step by step with an example. 

1. Identify the time period 🕣

First, determine the timeframe you want to analyze.

For most nonprofits, this is an annual metric, but you could also calculate retention rates for shorter periods (e.g., quarterly) or specific campaigns. For this example, let’s use a calendar year—comparing 2023 donors with 2024 donors.

2. Count last year’s donors 💸

Look at the total number of donors who gave during the previous year (2023). This includes anyone who donated, whether they gave once or multiple times. 

For example, if you had 500 unique donors in 2023, this is your starting group.

3. Count returning donors 🔄

Next, run a LYBUNT report to check how many of those 500 donors gave again during the current year (2024). These are your returning donors.

For example, if 250 of your 2023 donors made a gift in 2024, this is your returning donor count.

4. Apply the formula 🧑‍🔬

Now, calculate your donor retention rate using the donor retention formula:

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

(250 ÷ 500) × 100 = 50%

This means you retained 50% of your donor base from 2023 into 2024.

What is the average donor retention rate? 

Donor retention refers to a nonprofit’s ability to keep donors committed over time—meaning they continue to give each year. The average donor retention rate is 42.6%. While that might seem somewhat low, it’s actually a pretty good rate—it means that almost half of your donors come back year after year (and that’s something to brag about).

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How donor retention impacts long-term fundraising sustainability

When your nonprofit retains a high amount of donors each year, you can:

• Raise more money 🤑 Retaining just 5% more donors can double your organization's revenue. This increase allows nonprofits to plan more effectively, set long-term goals, and invest confidently in programs and initiatives.
• Save money 💰 Acquiring new donors is significantly more expensive than retaining existing ones. In fact, acquiring a new donor costs 5-10 times more than retaining an existing one.
• Become sustainable 💫 Loyal supporters are more likely to increase their donations (and become major donors), participate in campaigns, or even leave legacy gifts.

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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 period of time to the next. 

For instance, if a nonprofit has a 40% retention rate and 1,000 donors in year one, 400 of those donors will donate again the next year. After five years, about 25 of the original 1,000 donors will remain.

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

More to explore

Master the donor life cycle for better retention →

Top 5 fundamental donor retention strategies for nonprofits 

Now that you’ve calculated your rate, you’re probably wondering how to increase donor retention. Here are some tried-and-true ways to act on your findings. 

1. Roll out the welcome wagon 👋

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

This tactic can bring new supporters up to speed, introduce them to your community, and provide resources that help them understand the real-life impact they can make with your nonprofit.

Your campaign could be:

• An automated, four-part email series ✉️ 
• A few friendly text messages 🤳 
• A direct mail letter 💌 

When engaging with new donors, offer exclusive content, like videos, e-books, infographics, and toolkits. No need to send a t-shirt or expensive mug right off the bat.

⏰ When to send: Reach out to acknowledge their gift within the first 48 hours, then stagger updates that keep your new audience engaged without overwhelming them—or making them feel like an ATM.

“ Our goal is to get to seven touches before we ask again. When people hurry up and try to get a second gift, their retention rates plummet. The number one reason why donors don't stay is because they're asked too often and for too much money.” - Lynne Wester, Donor Relations Group 

More to explore

Maximize impact with nonprofit CRM bulk email →

2. Share impact stories and updates 💛

Show donors the impact of each dollar, whether their gifts saved one life, fed five families, or helped to build a new school.

You can showcase donors’ impact in several ways::

• Feature individual testimonials and demographic-level infographics on your social media pages 😍 
• Highlight a key takeaway in your thank-you messages 🙏 
• Incorporate photos and videos of beneficiaries into your prospective and current donor communications 👀 
• Send out an annual impact report 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 helps you 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 we and our, focus on you and your. For example, “You helped 50 environmentally sustainable businesses grow, expand, and better serve your community with over $75K in support this year.”

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 giving and participating and makes existing donors and supporters feel valued and heard.

• Send out an annual survey and incentivize responses with a raffle 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 👈
• Use brief surveys to keep donor information and payment details up to date in your donor database 💌 

Requesting feedback 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. 

4. Make giving easy and flexible 💸

Many for-profit businesses know that consumers often abandon their carts due to clunky checkout processes (too many forms, limited payment options, etc.). The same problem occurs with donors.

To ensure supporters complete their transactions—and don’t drop off—nonprofits should offer:

• Recurring donation options that allow donors to give every month or year 🔄
• Multiple giving channels  (email, text, etc.) so donors can give wherever is most convenient 🤳
• Diverse fundraising opportunities  (P2P, crowdfunding, etc.) so supporters can participate in ways they find most exciting and engaging 💃
• Various payment methods so donors aren't limited to just one option 💳

5. Always show gratitude🙏

While thanking donors might seem like a basic retention strategy, it’s also one of the most effective.

Donors want to feel seen and appreciated for their contributions. When nonprofits do this thoughtfully and consistently, results follow.

Whether a donor is new or recurring, always show appreciation with strategies like:

• Handwritten thank-you cards 💌
• “Donor of the Month” features on social media or in newsletters 📣
• Donor appreciation events that highlight the impact of their gifts 🥳
• Small, thoughtful gifts 💝
• Personal phone calls 📞

Bring donor retention strategies to life with Givebutter 

With a strong welcome campaign, compelling impact stories and messaging, and a solid donor feedback loop, you’ll set the foundation for steady growth in your donor network. 

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

Create your free account today and see how Givebutter can transform your fundraising and donor retention for years to come.