Balancing Donor Retention and Acquisition

June 16, 2016

Nonprofits must be shrewd in their efforts to obtain and retain donors, but what are some effective methods? How do nonprofits petition new donors without neglecting loyal ones?

Although acquiring new prospects is a necessary and important challenge for nonprofits—one which deceptively seems to be the only method that promotes growth—retaining donors should be a priority of equal import. If you think about how many resources (money, time, etc.) are spent on just recruiting people, you’ll realize that keeping donors active in the organization is actually easier than trying to get someone new involved. Acquisition alone is like making an initial investment; you know going into it that you run the risk of no financial return. For this reason, retention is not only less expensive but also crucial to the livelihood of the organization.

Donor retention is, by definition, a fundraising technique aimed to measure the percentage of donors that regularly or frequently contribute to an organization. The higher the retention rate, the more likely it is for a nonprofit to accurately forecast expected revenues and devise a strategic plan to pursue yearly objectives. It creates a platform that strengthens relationships with advocates and increases donor referrals for new prospects. Furthermore, good retention provides vital information that assists in enhancing marketing approaches and appeal strategies, meaning it is critical for nonprofits to optimize.

So, what are some specific tactics that nonprofits can employ to address both current and prospective donors?

  • Personalized communication deepens the relationship established with donors by demonstrating that the organization recognizes its supporters and acknowledges their efforts. It encourages sponsors to donate because it humanizes the interaction and shows that their contributions matter to the organization.
  • Segmentation is an essential tool used to categorize individuals based on similar characteristics and common interests, such as demographics, lifestyle, behavioral patterns, and preferences and opinions. This process shows that the organization is in tune with its target audience and willing to invest time to learn about them. Proper segmentation can initiate higher response rates and entices others to give more.
  • Multi-channel communication provides a way to keep donors updated on the latest projects, recent accomplishments, and volunteer events. It increases interaction with donors, builds brand image, and provides multiple platforms to gain additional income.

Consider both acquisition and retention, as they are two of the most effectual tools in attaining and maintaining donor longevity.

Balancing Donor Retention and Acquisition