How to Boost Donor Retention After the First Gift

by The Vella Group

Published On: March 22, 2022Categories: Fund Development, Insights

Your nonprofit just landed several sizable donations.  That’s awesome!  Your hard work and relationship building have really paid off.  But now comes the critical part.  How do you keep those donors engaged so they’ll give again the following year?

Donor retention is a challenge for most nonprofit organizations.  Although giving levels reached record highs during the pandemic, data from the Fundraising Effectiveness Project (FEP) shows overall retention rates through 3Q 2021 dropped 7.2% compared to 2020.

Overall, annual donor retention rates average about 45%, according to FEP data from the last five years.  Put simply, for every 100 donors who gave last year, only 45 will give again the following year.  And once you lose a donor, the chance they will return is very low – FEP reports a recapture rate of just 4%.

As a result, nonprofits tend to fall into a pattern.  They spend major time and resources attracting new donors when they should really focus on building sustainable connections with existing donors, especially those who just gave for the first time.

Engaging with first-time donors gives you the opportunity to reach people when they are often most interested in your organization.  The more impact you have with first-time donors, the greater the chance they will give again – and again – maximizing your retention rate and your fundraising dollars.

Here are some tips to guide you through this process:

Develop a Manageable Plan

While nonprofits understand the importance of donor retention, their teams are often spread thin.  Make sure you develop a donor retention plan your organization has the capacity to execute.  If needed, reallocate resources so your team can implement a retention plan tailored to each giving level – consistently and effectively.

Thank Donors Promptly & Sincerely

Never underestimate the power of a simple handwritten thank you note.  When you receive a sizable gift, send the donor a personalized response within the same month, showing your gratitude and describing the impact that donation will have on achieving your organization’s mission.  You can take it a step further by tailoring your initial response to the level of giving.  Mid-level gifts, for example, can prompt a personalized letter from your organization’s leadership, while larger donors receive a note and phone call from a board member.  Whatever you decide, it’s important to express timely and sincere gratitude, and do it consistently.

Share the Impact

Once you’ve expressed your initial gratitude, it’s time to build on the momentum.  To keep donors interested and engaged, take time to educate them about your organization’s work.  Show them how their gifts are making an impact in the community and helping your organization achieve its mission.  Quarterly impact reports, e-newsletters, videos and in-person events are just a few of the ways you can share your story.  Donors are more likely to give again when they can connect their gifts to tangible and meaningful results.

Put a Face to Your Organization

The pandemic made virtual meetings the norm, but the gradual return to in-person events gives you more opportunities to connect your donors and leadership face to face.  While annual galas and other large events play a critical role in fundraising, don’t overlook the power of small, informal gatherings.  In-person tours, virtual Q&A sessions, lunch and learns – they can all go a long way in creating strong connections with donors.

Build Relationships Outside Your Organization

More than likely, your donors support multiple causes, so participating in community events and fundraisers outside your organization gives you the opportunity to connect on a more social level.  It’s another way to interact with your donors, get to know them better, understand what’s important to them and ultimately, build a foundation of trust.

Be Prepared for the Second Ask

The time you invest to thank your donors and build solid relationships paves the way for the second ask.  Before you proceed, however, make sure you understand your donors’ giving capacity so you approach them with realistic expectations.  If a donor gifted $1,000 last year and gives to other causes, for example, a $10,000 ask is probably too high.  When you do your homework, the request becomes easier and produces better results when donors believe in your cause, understand their impact and are truly engaged.

By getting these things right, you’ll boost your new donor retention rate and position your organization for sustainable success.

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