Nonprofits Should Use Technology to Enhance Donor Retention

Written By Alla Levin
November 21, 2022
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Nonprofits Should Use Technology to Enhance Donor Retention

Donor retention is one of the essential metrics for nonprofits. It’s a measurement of donors who continue to support an organization yearly.

How do you calculate donor retention?

Calculating the donor retention rate is easy. Simply take the previous year’s donors who are also giving this year and divide it by the number of donors from last year. Multiply the resulting figure by 100 to get your donor retention rate.

If only 25 of 100 previous donors gave to your organization this year, your donor retention rate is 25%. Here are a few reasons why donor retention should matter to your nonprofit:

It’s More Expensive to Get New Donors

Maintaining relationships with old donors makes economic sense. In fact, it can cost ten times more to get support from new donors, according to Nonprofit Quarterly.

Yet many nonprofits make little effort to strengthen relationships with old donors. Instead, they spend resources only on trying to court new ones.

Higher Donor Retention Means Stability

With a higher donor retention rate, your organization has a steady annual income stream. A reliable flow of income helps build and strengthen nonprofits. High donor retention also allows nonprofits to navigate challenging economic times more easily.

Regular Donors Remember Nonprofits in Wills

Donors who have healthy relationships with nonprofits tend to leave them sizable gifts in their wills. And regular engagement with a donor increases the likelihood of a larger gift.

Regular Donors Spread the WordHigher Donor Retention

Nonprofits typically try to widen their donor base by investing in marketing efforts to new donors. While efforts to woo new donors are important, nonprofits can also organically grow their donor base by strengthening their relationships with existing donors. After all, donors who gift repeatedly are more likely to speak well of your organization to other people in their network.

Clearly, a strong donor retention rate is vital for a nonprofit. But how do nonprofits increase donor retention?

Use The Best Technology

Your nonprofit probably uses a constituent relationship management (CRM) system to improve workflow and develop relationships with key constituents. To take your donor retention to the next level, use a CRM with an excellent program for donor management and fundraising. It should offer powerful communication tools that help you communicate effectively with your long-term donors in order to build relationships and drive support.

With the program’s built-in email, you can send individual personalized e-receipts, thank-you emails, and newsletters to your generous donors. Such messages reinforce relationships between nonprofits and their backers.

You can also track all activities related to your favorite donors, including events and attendance, campaign emails, and phone calls. You can accelerate your impact and raise donor retention rates with advanced tracking.

An excellent donor management solution also provides visibility. You, your staff, and your volunteers will clearly see donor activity, including communications and donations. You’re also less likely to make the type of mistakes that stop donors from returning when you use a top donor management solution.

Optimize Your Website

A first-time donor’s experience with your website can significantly impact their decision to give again. Please ensure that your website:

  • Works seamlessly and doesn’t make the donation process long or difficult.
  • Offers multiple payment mediums for a donor’s convenience.
  • Doesn’t send the donor to another website to give.
  • Only asks for pertinent information instead of unnecessary details.
  • Looks sleek, professional, and trustworthy.
  • Emails a receipt to the donor’s email address.
  • Displays a gracious thank you message immediately after the donation, regardless of the gift size.

Ask For a Repeat Gift

Most nonprofits wait too long before asking for a repeat gift. Donors who give a second gift within a month or two are more likely to gift year after year. Strike while the iron is hot. But take a nuanced approach, or you may send your donor packing. Many nonprofits initiate monthly giving programs with donors to ensure higher retention rates.

Personalize CommunicationPersonalize Communication

Personalize communication with your donor to show them they’re more than just money resources. Always send personalized thank-you emails and offer updates on how their gift was used. For more generous donors, please pick up the phone and call them directly. A warm phone call will help them feel like valued partners.

Another way to personalize communication is to show donors why their gift is so valuable. You can leverage newsletter stories to explain how the money was spent. You can also use social media stories to help donors across the world see the impact of their giving.

Of course, numbers offer the most precise picture. Provide regular reports to your donors. A more transparent financial picture may motivate donors to give more frequently.

Please also be open to feedback. Ask donors for input through emails, surveys, and online meetings. Incorporating valuable ideas will cement the relationship with your donors and raise your retention rate.

Improving your donor retention rate may seem challenging, but it’s worth the effort. Just a 10% increase in donor retention can raise the lifetime value of your donor base by up to 200%.

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