Donor Retention 101 - Easy Tips to Boost Your Retention

By Lisa Hirst Carnes | March 2023

A heart made of puzzle pieces with a hand adding pieces.

Donor retention is the foundation of a healthy nonprofit. It's essential for sustaining operations and achieving your mission. Retaining donors helps build a loyal base of supporters who are likely to contribute. These sustaining donors are vital to a nonprofit's success. Plus, it's a lot easier than always needing to attract new donors.

According to the Fundraising Effectiveness Project, the annual donor retention rate is only 41.9%, a drop from 45.1% in 2016. New donor retention has also declined during that period.
Furthermore, the Nonprofit Leadership Center stated that 75% of NPOs reported that the pandemic affected their revenue streams and ability to fundraise, forcing budget reductions. With fundraising getting more complex and competitive, retaining donors is critical. 
In this post, we'll examine why people may stop supporting an organization and what you can do to keep them.
But first, let's start with the basics. 
Not sure of your donor retention rate? Divide the number of repeat donors for the current year by those who donated last year. 

Why donors stop supporting

A lack of transparency and trust

One reason a nonprofit may lose donors is a lack of communication or transparency. Donors that aren't aware of the impact of the nonprofit's work can lose trust and interest. 
When people give, they need assurance that their contribution will be used effectively. This reassures their trust that their gift made a difference.

What You Can Do

Always tie financial contributions back to their impact on your organization. Communicate often. Be honest and open. Let donors know what's going on and be specific. 
If you've received bad press, issue a statement right away. This communicates that you take responsibility for what happened. 

Donors can no longer afford to donate

Unfortunately, donors may only contribute to an organization when they can afford to. There are many reasons that someone may experience a financial change, such as unexpected medical expenses. Donors who can no longer commit to a donation may stop, even if they value the mission and work.

What You Can Do

Donor contributions may fluctuate over time due to changing financial situations. As a nonprofit, you can support these donors by accepting small donations. Small donations build a diverse community, where a nonprofit isn't beholden to corporate donors. Remember, small gifts are powerful!
You can also offer alternative ways to contribute, such as volunteering. Nonprofits need to maintain a positive relationship with these donors as they may contribute again when their circumstances change.

Donors don't feel appreciated

A nonprofit must acknowledge donor contributions to ensure donors feel appreciated.

What You Can Do

Thank them for the donation. Make it personal! Show gratitude for their contributions by letting them know how it made an impact.
Last week, we received a handwritten thank you from the Minneapolis Guitar Society. Someone took the time to connect with us and let us know how our contribution made a difference. This type of personal interaction goes a long way. 


Donors no longer feel a connection

Nonprofits can lose donors when they no longer feel connected to its mission. Organizations draw donors that share common values and resonate with its mission. If a nonprofit changes its messaging, they may feel disconnected. 

What You Can Do

Nonprofits should focus on authentic engagement with their supporters. Share stories that illustrate their impact, invite them to take part in events and request feedback. By maintaining a connection with donors, nonprofits can ensure that supporters remain invested in the mission.

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Harness the power of your website

We’ve been designing nonprofit websites for decades now. So, we know that a nonprofit's website is vital in retaining donors. 
Some nonprofits fail to harness the power of their website. A huge part of keeping donors engaged is to create a user friendly online experience.
Provide easy access to information about the organization's mission, impact, and programs. Make it easy to find the information that users want. Look at your analytics; if users often search your website for information, make sure your search function is set up properly
Compelling testimonials and clear messaging is critical. Steer clear of stock photos. Instead, use authentic imagery that resonates with your audience.
Additionally, use your website to showcase transparency and accountability. Provide financial reports, annual reports, and other documentation. 
Nonprofits can also use their website to facilitate online donations. Users are becoming more comfortable making payments online, so make sure to provide a seamless online donation option. You can also recognize donors by creating personalized pages to thank them for their contribution
Finally, use your website to keep donors informed with regular updates and newsletters that foster a sense of community.

Topics: Nonprofit Help