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The Simplest Donor Retention Tip of All Time

By Will Schmidt

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Donor retention is an important topic for nonprofits for one very simple reason; it costs significantly more money to acquire a new donor than it does to retain an existing one. Despite this well-known fact, nonprofits of all sizes continue to struggle on the retention front.

The Chronicle of Philanthropy wrote about this struggle recently, citing research that takes into account “contributions by new donors, previous donors who gave more, and lapsed donors who started giving again.”

After comparing the gains with losses in support, year over year, the research clearly shows that for every $100 a nonprofit raised in 2016, they lost $95 from supporters who didn’t return or who reduced their monthly donation amount.

This attrition rate leads organizations to lose large numbers of one-time donors and invest more money into acquiring new donors to fill that loss. This leads to inefficient fundraising operations and less money for your mission.

To retain donors and develop a relationship with them beyond their first gift, here are a few things to keep in mind.

What is Donor Retention All About?

Donor retention is a practice in relationship building between donors and your organization. Like any other relationship, it goes through different phases as it evolves.

In the early stages, before significant rapport is built, the relationship is at a higher risk of fizzling out. Just as a bad first date hurts your chances for a second one, a sub-par first impression with a new donor diminishes the chance for a follow up donation. Effective communication can help nonprofits ensure a donor’s first interaction with them is a positive one.

Communicating effectively is multifaceted though, and goes beyond one outreach attempt. For example, sending a generic note thanking them for supporting your organization likely won’t cut it. Relationships aren’t just built on communication—they are built on contextualized communication.

How you communicate with someone depends upon the information you have about that person and the experiences you’ve shared with them in the past. The problem with new donors is that they’re new. There isn’t a lot of context your nonprofit can use when crafting an initial follow up message. However, there are still ways you can collect information that will inform this communication.

The Simplest Way to Improve Donor Retention

With the right fundraising software, learning more about new donors is as simple as asking them to share their reasons for giving. For example, you can create a field on your donation form where they can include this information:

An example
People can leave a comment in the donation form.

When a donor includes a comment about their motivation, it goes directly to your nonprofit. You and your staff, then, can contact them with more than a generic thank you. You can directly reference the information they send you.

This level of context and personalization can make a dramatic difference when it comes to your new donor retention rates. Start the relationship off on the right foot by letting donors know your organization is listening and that you care.

Experimenting with Your Ask

It’s a good rule of thumb to provide an outlet for your donors to express themselves when they make gifts. Though, the amount of information you include on your form is a true balancing act. Be sure to read up on best practices and understand how to get what you need without reducing your conversion rates.

Consider experimenting with custom questions in your donation form, like this:

Custom question creation in Classy’s New Fundraising Suite.
Custom question creation in Classy’s New Fundraising Suite.

When donors select their interests, you can create separate messages that specifically touch on that information. Further, this is one way you can segment your donors for more effective outreach as their relationship with you grows. For example, you can bucket supporters into groups and engage with them based on their respective interests.

More than Just a Transaction

Donors are people and they want their opinions to be heard and valued. Integrating feedback mechanisms into your donation experience gives donors the opportunity to express themselves in a way that enhances their relationship with your organization.

The personal nature of your informed follow up shows that you care about your donors as individuals: they’re more than just a transaction.

Strong promotion of that sentiment is, truly, the simplest way to improve your donor retention efforts. However, there are many tips and tricks you can use to keep your supporters coming back to your campaigns again and again. If you want to learn more, check out the guide below.

This post, originally written by Sean Chisholm, has been updated to reflect new information, data, and trends.

The Donor Retention Handbook

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