There are two great things about utilizing your organization’s donor retention rate as a temperature check for your development program. Firstly, you are measuring participation rates, which is a powerful way to understand how many of your donors are actually giving when they are asked. Secondly, every donor counts. No matter how much someone gives, your $1 donor is going to have the same “weight” as your $1 million donor. Essentially, we’re putting the gift amount aside and focusing on the people who are giving.When one donor invests in your organization, that is a success, but when that same donor gives the next fiscal year, that is a victory! Now, can you do that with your entire database? Once you figure out your retention rate, below is your temperature check for your entire giving program.
75-100% Retention Rate
Nice job. You are stewarding your donors well, and they are inspired to stick with your organization. But don’t pat yourself on the back too hastily; Delve recommends that your organization build an acquisition strategy because it’s time to take on more donors! If your retention rate is this high, you don’t have enough donors.
50-74% Retention Rate
Congratulations, you’ve landed in the sweet spot. This is a rate that organizations all over the country aspire to accomplish. This is a robust philanthropy program, and there is a strong connectivity between donors and the mission. There will always be churn in the donor pool and every organization loses donors, but this organization balances attrition with acquisition and renewal.
25-49% Retention Rate
There is work to be done, and you are aligned with the national average. The AFP released a study on more than 2,300 participating member organizations and found that the average retention rate was 41%. Please don’t think that because you are average in retaining donors that you have no improvements to make. Delve recommends that you implement a smart, donor-centered stewardship system. We all bow down to Penelope Burk for her insightful three tenets of retention; they are the building blocks for keeping donors. If you are not sending a timely gift acknowledgement, communicating with donors that their gift is being utilized, and their gift has made an impact, alarm bells should be ringing in your head. If you see red flashing lights and hear alarms, we recommend reading and implementing Fundraising Fundamentals’ donor series on stewardship.
Below 25% Retention Rate
Delve recommends that this organization go back to the basics. This is a hard place to be because this organization wants to increase its retention rates but it takes resources that this organization might not have. In our donor data analytics, we’ve seen a nation-wide trend of retention rates below 25% in organizations that have operating budgets less than $2 million. These organizations do not have the capital to spend on high-end stewardship pieces. So, we’ve included a few thrifty and timely tactics for this organization to conduct stewardship and increase its retention rates:
- Make sure your acknowledgements go out within 5-7 days of gift receipt. Look at the language in the letter. If this is one of the only mail pieces your donors will receive, is it the most impactful language? Have you promoted upcoming events where the donor might make a second gift? Have you included a compelling story that the donor will remember and might tell a friend? Have you offered a tour of your facility? Is the letter personalized as much as possible?
- These shops tend to be one or two employees who manage all revenue generation, which means time is tight. When you show up for work, get a coffee and sit at your desk. The first thing you should do every morning is pick three recent donors and call them to thank them for their gift. We promise it will be one of the most rewarding things you do all day, and those donors will remember the call (or the voice-mail) when you solicit them for a second gift. If you call 3 or 4 people every day, you will make close to 1,000 calls over the year. Your retention rate is sure to increase.
- Create cultivation and stewardship experiences for your donors that get them on site (regularly). This should not be a solicitation, rather a time to connect your donors to the mission. Each month or quarter, you could mix it up by having different presentations by program experts or C-level executives. Whether it is a monthly “Donuts with a Director” or “Coffee with Chris” (Executive Director), donors can opt in to learn more about the organization they are supporting.
These are some of our favorite thrifty stewardship tactics. We’d love to hear yours! Feel free to share your creative stewardship ideas below.