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Writer's pictureLiveAlumni
May 2, 20183 min read

Donor Retention for Annual Success


Charitable giving in the US has increased nearly every year since the late 1970’s. Blackbaud’s 2017 Charitable Giving Report stated that all sectors of nonprofit donations were up by about 1% in 2016; higher education saw a slightly higher increase at about 1.5%. While it is good news that donations are up, the increase in donations has been conservative, to say the least.

To be fair, there are a lot of uncontrollable factors that come into play when looking at nonprofit’s annual revenue – the economy, one-time gifts, etc. Charlie Cardillo, the current VP of Harvard’s Institutional Advancement, wrote that annual revenue is important, but not the only factor when looking at a nonprofit’s annual success – annual success should also be measured by donor behavior. What was donor participation like in the last year? What about over the last few years? Did gifts increase? Did donors give regularly?

Donor retention rate plays a large role in an organization’s annual success. The average percentage of donors that return annually to donate has floated in the low 40% range since 2005. This means, on average, more than half of donors don’t return to donate the following year.

Adrian Sargeant says “a 10% increase in donor retention can increase the lifetime value of your donor database by 200%.” So, what can higher education and other nonprofit fundraisers do to keep their new and existing donors around for years to come?

First and foremost, you’ve got to track donor retention. If you’re not sure how, take a look at this Bloomberg article for a simple guide or, if you are a Blackbaud user, you could also check out this article on how to run queries to calculate your donor retention.

Next, research your donors. The more you understand about your donors, the better. And not just your most loyal donors, even the donors who have come and gone. This insight can help you assess your own methods and what forms of acquisition, engagement, and campaigns have been most successful with which donors.

Recognize your most devoted donors. Let these trusted donors know that they are appreciated by acknowledging them however you can – personally, in publications, at an event. Remember, not all donors are made equal, some like the spotlight whereas others may prefer to stay anonymous.

Demonstrate the impact of their donation. Have a system in place to make sure they see the results of their donations. If they see the positive outcome of their contributions, they are more likely to continue to support your institution.

Have love for donors. One of the simplest and most repeated themes for success amongst fundraisers and fundraising consultants is being genuine and heartfelt with donors. Donors who are treated like a one-time business transaction aren’t likely to come back. Care for your donors and keep in touch with them, just as you would with every other relationship, and they tend to return the favor.

Not only does donor retention help overall revenue, it gives an organization’s credibility. Charlie Cardillo says, “A campus that doesn’t keep donors from year to year can’t carry on a steady dialogue about the role of ongoing support, and that dialogue is what leads to the two elements of value: loyalty and upgrade.” It important for fundraisers to use past donor behavior to create strategic plans that includes a happy balance between donor retention and donor acquisition.

 

Sources & Additional Reading

[1] Giving Statistics, Charitynavigator.org

[4] The Unexamined Donor, Case.org

[5] A Guide to Donor Retention, Bloomerang.co

[6] Professor Adrian Sargeant, Studyfundraising.com

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