I recently published an article about how to increase donor retention for your nonprofit. But why is donor retention so important for your fundraising plan? Here are 3 reasons I encourage nonprofit leaders to invest in donor retention:
1. For every multi-year donor you lose, you need 3-4 new donors to make up the loss in funding.
According to Blackbaud, one of the leading tech providers for nonprofit fundraisers, donor retention is crucial for maintaining stable funding. In fact, they project that every time you lose a multi-year donor (i.e., someone who has donated to your nonprofit for two or more years), you need to find 3-4 new donors to make up for the lost funding.
And it’s not just the funding that matters — It’s also the time investment. Maintaining a relationship with one multi-year donor requires significantly less time than finding and recruiting 3-4 new donors.
2. multi-year donors are significantly more likely to make another donation than new donors.
Here’s another big reason to maintain good relationships with your existing donors: They’re much more likely to give another donation than your new donors. In fact, Blackbaud finds that 64% of multi-year online donors will make another gift, compared with just 23% of new donors.
3. focusing on donor acquisition instead of donor retention can lead to a loss in income.
As I mentioned before, acquiring new donors requires a time investment… But it also requires a monetary investment. To attract a new donor, your nonprofit will have to spend money on marketing and allocate part of your fundraisers’ salaries toward donor acquisition.
One study even suggests that spending time acquiring new major donors can actually lead to a short-term loss in income of about $300 per prospect.
So how can your nonprofit improve its donor retention?
I’m a huge nerd when it comes to researching best practices for marketing and fundraising! So I wrote this article with 6 research-driven strategies to improve your donor retention. The article also shares examples of tasks you can complete weekly, monthly, quarterly, and annually to improve donor retention.
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