Donor Loyalty

An article from Sumac note some good points in retaining donors.

An excerpt.

“According to Adrian Sargeant, a professor of fundraising at Indiana University’s Center on Philanthropy, a typical nonprofit will lose 50% of its donors between the first and second donation and up to 30% per year thereafter. With these rates, organizations must continually scramble to bring in new donors. But donor acquisition is very costly. According to Penelope Burk, president of Cygnus Applied Research, “new donors are expensive to get and rarely give much the first time.” In the end, “acquisition is more expensive than retention and often runs at a loss.” If non-profits focused instead on boosting donor retention, therefore, the payoff could be huge.

“Boosting Donor Retention

“Likewise, Sargeant argues that even a small improvement in retention can yield a windfall over time. Even boosting the retention rate by as little as 10 percent, he says, can increase the lifetime value of a nonprofit’s donor base by up to 200%.

“So, how do you boost donor retention? You give donors what they want. Thanks to Burk’s national research studies on the key motivators of donor loyalty, we know exactly what that is. In that research, 93% of donors indicated three things that would influence them to stay loyal and give increasingly generous gifts over time:
1. Prompt and personalized gift acknowledgement
2. Confirmation that funds will be used as originally indicated in the solicitation
3. Measurable results on donors’ last gift before they are asked for another one.

“All three of these things, Burk points out, are tied to donor communication and are within the control of charities and fundraisers to change. So, why don’t non-profits focus their attention on changing communications to meet donors needs?”