Low retention rates pose a challenge to nonprofits

Many nonprofits are plagued by low donor retention rates which makes their fundraising efforts even more difficult.
Date Published
09/22/2014

Nonprofit fundraising is likely the biggest daily focus for 501(c)(3) groups. In order to ensure that their organizational mission is met, contributions from donors are needed to help nonprofits achieve this goal. Many charities understand that raising money is a multi faceted approach. But above all, the first thing that must be done is to convince someone to give.

This can be accomplished by creating a compelling campaign that elicits an emotional response from a person that causes them to support a cause financially. However, the biggest challenge is not in getting an individual to give, but to do so consistently. Nonprofits, charities and foundations all need to create donor pipelines that they can count on for regular support. However, donor retention is an issue that is faced by many organizations.

Surprising retention statistics for nonprofits
Convincing someone to support a charitable organization or cause financially is certainly worth celebrating. But it doesn’t do much good if the person simply decides to only make a one-time contribution. This is the reality currently being dealt with by a large number of 501(c)(3) groups.

Business 2 Community recently featured an infographic created by nonprofit services group Pursuant called, “5 Alarming Donor Retention Trends.” They are as follows:

  1. Sixty-nine percent of charities and other organizations don’t have a donor retention plan in place.
  2. For every $100 donation that is made by someone in 2012, nonprofits lost $96 simply due to contributor attrition.
  3. Since 2006, the rate of repeat or continuous donors has fallen from 50 percent to 39 percent.
  4. Nonprofits lost 105 donors in 2013 for every 100 gained.
  5. Most charitable organizations that received financial contributions from a new supporter retained them at a paltry rate of just 22.9 percent two years ago.

It’s clear that getting people to donate money to a specific cause isn’t all that difficult. However, relying on someone to give and then keep their donations flowing has been a huge challenge. Still, there are ways that can help keep contributors around longer after they make their first pledge.

Helpful donor retention tips and strategies
For any charitable organization struggling with ways to maintain a strong donor pool, there are strategies that can be put in place that increase the likelihood people stick around beyond just one giving cycle.

A report from Nonprofit Information touts the success of membership programs. This solution allows people to partner with an organization for a specified amount of time while making monetary donations along the way. This kind of strategy includes a renewal option where specific messaging can be utilized to create a sense of urgency for supporters to continue their partnership.
When it comes time to renew a membership, connecting with donors both through the mail and via email is a method that can prove successful.

Pursuant also listed a number of ways charities can retain their support pools. The first step in this process is to take a hard look at current retention rates. This may make board members and other higher-ups within a nonprofit uncomfortable, but this information must be known in order to formulate a solid plan.

Another suggestion made by the website is to set-up specific goals for each new donor that contributes financially. By developing an action plan that will encourage future giving for each supporter, this can have a substantially positive effect on overall retention rates.

For nonprofits, receiving donations in the current economic climate can be tough. However, by carefully nurturing existing donor pools while still taking steps to attract new donors, creating a strong and consistent giving pipelines is entirely possible.

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