It’s time to show donors some love and to work on your nonprofit’s donor retention rate.
A nonprofit’s relationship with donors requires nurturing so they don’t become LYBUNT (last year but unfortunately not this year) or SYBUNT (some years but unfortunately not this year) donors. Many nonprofit organizations suffer from what fundraising researcher Ellen Bristol calls a “leaky bucket.” Each year, your organization scrambles to acquire new donors because first-time or long-time donors don’t give again. Essentially, lapsed donors are the water draining out of holes in your bucket. You’ll need to uncover and correct holes in your communication plan to improve donor retention.
According to the most recent Fundraising Effectiveness Project, donor retention is down 3.1% year over year and donors are down 7.1% from 2022 compared to 2021. Don’t lose hope just yet; total dollars fundraised are up by 4.7%, and there are some proven methods to help retain donors.
Increased giving is the good news, but where did the other donors go? Donor retention is crucial to fundraising effectiveness and improves overall fundraising success. Start by calculating the donor retention rate (get a calculator here). Once you know the donor retention rate, show your current donors some love and improve your nonprofit’s donor retention rate with these five tips.
1. Send prompt thank you communications to donors
It is best to thank the donor within 24 hours of receiving a gift. To help with this prompt gratitude, consider sending a thank you email and following up later with an additional letter and tax receipt via postal mail if that is your nonprofit’s usual practice. IRS regulations require a receipt for gifts over $250, but the best practice for donor retention is to thank every donor for every gift. Don’t forget donors who give in-kind, tangible items or volunteer their time.
2. Segment donors for donor-centric communications
This tip is more of a global strategy than a time-specific tip, but don’t overlook the power of this strategy. Donor segments might include first-time donors, members of giving societies, major donors, or others you already include in your direct mail strategy. Consider segmenting donors by communication preference. Donors over 55 years old may want to receive direct mail, and younger donors may only want to receive emails or text messages. Once you have your donor segments worked out, send donors a message of appreciation.
3. Give donors words of affirmation and show the impact they made
Like the love language from Gary Chapman’s book The 5 Love Languages, give donors “words of affirmation” by telling them what they made possible. For example, tell them how many families they fed with their gift to the food pantry or how many nights of shelter were provided to homeless families through donations. This personalized, donor-centric communication strategy can be done through email, a link to a recorded video, or even ringless voicemail. This can be as low-tech as your organization needs and may differ for each donor segment.
4. Send a handwritten note to improve donor retention
In today’s world, it’s easy to depend on electronic forms of communication, but a handwritten note from a staff member, or better yet, a board member, can delight your donors! A handwritten card can stand out since many organizations send only electronic communication. And don’t underestimate the power of personalization. Include personal details like how many years they have been giving to your organization or thank them for being a member of one of your giving societies. While writing a note to every donor may not be feasible, consider doing this for a donor segment that will have a significant impact. You might select major donors or members of a special giving circle.
5. Harness technology for custom donor-centric communications
Thanking donors can happen in several ways, but consider how to stand out in a noisy world. We covered email and handwritten thank you cards, but your nonprofit’s communication plan might include video messages or ringless voicemail to make a greater impact with donors. Harness the power of technology to thank donors promptly and cost-effectively.
Take time to calculate your donor retention rate and steward donors with messages of thanks and appreciation that stand out and inspire them to give again. Gratitude can have a considerable impact on donor retention. With year-over-year donor retention numbers trending down, help your nonprofit create a donor-centric communications plan that will make donors feel appreciated and understand the impact of their giving.
Your nonprofit organization might consider using automation technology through Microsoft Power Automate or AutomateGenius to save staff time and improve efficiency in day-to-day development tasks like sending emails to donors or creating a welcome series for new donors.
As technology advances, it can be essential to discover new ways to utilize automation to communicate with donors. To learn more about this opportunity, watch Using Automation Tools to Personalize Donor Communications.
Donor retention is vital to long-term fundraising success. To learn more about segmenting donors and harnessing the power of technology, request a consultation with the AutomateGenius team today. This technology can set up workflow automation to assist with gift alerts, draft emails to donors who make specified gifts, and so much more.
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