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3 Steps to Create the Ultimate Donor Retention Plan

Posted: 3/31/2022

Click here to read on NonProfitPRO.

By Dave Martin

Donor retention can greatly impact a nonprofit's ability to operate sustainably and plan for the future. Donor retention rates are also quite low on average. Recent research shows that nonprofits retain only 43% of their donors from year to year and the retention rate for first-time donors is even lower, sitting at only 19%.

These numbers show that retaining donors is difficult and retaining a significant number of donors is rare among nonprofits. However, effective donor retention is possible with a retention plan that takes into account why your donors give to your nonprofit, works to build personal connections and gives donors the flexibility they need to continue giving to your organization.

To set up a donor retention plan for your organization, consider how your nonprofit can work the following three steps into your fundraising and donor outreach strategies.

1. Personalize Communication

Few donors are satisfied with receiving generic messages and may see little reason to stick with a nonprofit that doesn't treat them like a unique individual. In fact, only 9% of donors felt compelled to consider a gift when receiving material, such as direct mail and email solicitations from a nonprofit, showcasing the need to send personalized content and messages.

Nonprofits can personalize their messages with a few basic steps, such as addressing donors by name, but most supporters prefer an even higher degree of personalization. This might include strategies such as:

  • Sending content that matches donor interests. It's easy to send email blasts to all of your donors, but avoid the temptation to do so. For example, if you're launching a new planned giving program, ensure you are sending messages promoting it only to donors who are in an age range where it might align with their interests.
  • Including specific, personal details in messages. Show donors you have paid attention to their past participation by including personal, relevant details in your messages. For instance, when promoting your next event, you might reference a prior event that a donor attended in your email and highlight similar aspects of your next event.
  • Varying content types based on donor preferences. Donor demographics are changing as millennials have become the majority of the current workforce and Gen Z members are beginning their careers, as well. This means donor communication preferences have also changed. Change up the medium you use to communicate with donors. Send short videos, link to social media posts or direct them to an article on your website.

When using templates, be sure to check messages carefully before pressing send. While effective personalization can have a positive impact on donor retention, poor personalization can subsequently have a negative effect.

2. Provide Multiple Ways to Give

Some donors stop giving not because they no longer care about your cause, but because they have limited resources to do so. Research found that giving was significantly reduced among households making less than $100,000 a year, especially in cases where individuals were impacted by unemployment.

Your donor retention plan should provide these donors with ways to continue contributing that are not financial burdens. Then, they can continue to be a part of your donation program and easily resume giving when they get back on their feet. Here are a few giving methods you might consider offering:

  • Passive fundraisers
  • Corporate matching gifts and volunteer grants
  • In-kind and item-based donation drives, such as shoe fundraisers

Additionally, supporters who are able to donate regularly might be interested in expanding their giving with low-cost donation methods.

3. Track Interactions

An effective donor retention plan can eventually lead to donors continuing to give because they have a history of contributing to that organization. Surveys among affluent donors have shown that more than 44% give to organizations based on their personal history with that organization.

While your nonprofit should focus on encouraging first-time donors to make their second gift — which can dramatically increase their chances of continuing to give — your retention plan should also have strategies for maintaining long-term relationships.

This is especially important for major donations and planned gifts, which often require donors to have multi-year relationships with an organization before the donor agrees to contribute. Keep these relationships on track by documenting each interaction your nonprofit has with these donors and their response to it. This will also help you better personalize your communication, positioning your nonprofit to collect important information about your donors and use it when getting in touch with them.

Keeping donors invested in your nonprofit can be a challenge, but the building blocks of an effective donor retention plan are straightforward — reach out to donors with relevant and engaging content, ensure they always have available avenues to give, and monitor your overall results to better plan your next outreach effort.

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