Ideas for Boosting Your Donor Retention

29 Aug Ideas for Boosting Your Donor Retention

29 August 2023

By David Allen, Development for Conservation

So what is your retention rate?

Count the number of unique households who gave money in 2021. And count the number of THOSE households who gave money again in 2022. Divide the 2022 number by the 2021 number and that’s your renewal rate. You can run the same exercise for 2023 against 2022 and get you current renewal rate so far for this year.

According to Bloomerang, reporting on the results from AFP’s Fundraising Effectiveness Project, the national average across all nonprofits is between 40 and 45% and has been decreasing every year since at least 2006.

If you are measuring your retention rate against this average, and feeling good about your 55% renewal rate, STOP!! 40-45% is TERRIBLE, and embarrassing. It’s not something we aspire to. Or shrug our shoulders at. “What can you do? That’s the world we live in, now.”

How do you spell “bone-headed thinking”?

The aspirational renewal rate should be more like 70-75%. Or – if you prefer – recalculate your renewal rate without first-year renewals. Now the aspirational rate should be closer to 80-85%.

About five years ago, Roger Craver offered up seven “7 Easy Retention Wins” in one of his Agitator blog posts.

I liked his list – are all things you can and should do:

1. Clean up your database
2. Say Thank you
3. Pick up the phone
4. Improve your donor services
5. Be boring
6. Give donors lots of opportunities to talk back
7. Create a monthly donor program

I won’t belabor his points. They are intuitive, and you can read his post using the link. But I will underline a few tidbits from them:

• If you aren’t using your mailhouse to run NCOA (National Change of Address) screens, you should. The pre-COVID number of Americans moving every year was 15%, and I suspect the number has grown since then. You may be mailing to people who will never get your messages. Craver offers a Do-It-Yourself alternative: https://TrueNCOA.com. I’ve never used it, but the link is still live.
• Fancy, professionally designed pieces say more about us that about what donors need. Donors need simple, quick, and easy. Be predictable, consistent, and … boring.
• Use quick surveys and informational gatherings to engage donors beyond just giving money. I love the idea of hosting on-line town hall meetings to generate discussion. Donors who are involved in multiple ways are more likely to give again.

To pile on, here’s some additional thoughts from me:

8. Go back to using paper. I’m all for on-line and social media renewals and appeals, but they only work so far. And don’t wait too long. If people are going to respond to an email, it will happen within just a few days. Then it’s time to send actual paper letters.
9. Don’t give in too quickly. As in “settling” for 40-45%. And don’t assume that those not responding are saying NO. Instead, assume that those not responding are not getting the message. Send a second letter, and a third, and a fourth. And keep sending emails and letters until you get close to that 70-75% benchmark.
10. Plan a newsletter – YES a PAPER newsletter – or some major public announcement in the middle of the renewal/appeal season. If a newsletter arrives in between renewal notices – and if said newsletter also includes a convenience envelope – it will boost responses – and donor retention.

I believe nonprofits, including more than a few land trusts, are “settling” for sub-par retention rates. We are moving away from paper, we are buying into meaningless social media metrics, and we are losing donors because of it.

The bottom line is this: It is easier and more cost effective to renew a member/donor than it is to replace them with someone new. If you think renewal is expensive and time-consuming, try marketing for new members! Returning members are also more likely to increase their giving over time and more likely to consider including the organization in their wills.

Retention is worth your Attention – and investment.

Cheers, and have a great week!

-da

PS: Your comments on these posts are welcomed and warmly requested. If you have not posted a comment before, or if you are using a new email address, please know that there may be a delay in seeing your posted comment. That’s my SPAM defense at work. I approve all comments as soon as I am able during the day.

Photo by Geof08 courtesy pixabay