By: Nicole Wallace, The Chronicle of Philanthropy
Title: “Our Digital Dilemma”
Summary: Organizations that increased the number of ways they communicate with donors — such as email, direct mail, texts, and social media — retained more donors from one year to the next, according to a new study.
Network for Good, a company that provides software for online giving and processes donations, analyzed three years of fundraising activities at 2,070 charities during the critical October to December year-end period. Organizations that went from communicating with donors in just one channel to communicating in two or more ways retained a median of 12 percent more donors than they did previously.
Conversely, groups that had been communicating with donors in two or more channels and cut back to a single communication channel saw their donor retention rates fall by a median of 31 percent.
Increasing the number of donors who give consistently year over year is a big opportunity for nonprofits, says Bill Strathmann, chief executive of Network for Good.
He says the average donor retention rate at nonprofits is roughly 45 percent, while subscription services like Netflix retain about 70 percent of their customers. If nonprofits could boost donor retention to 70 percent, charities could count on $75 billion more a year, according to Strathmann.
“It’s just so daunting and such a haul to have to start each year with a virtually empty bucket rather than a bucket that is 40 percent full, 50 percent full, 70 percent full in terms of the funding you need to support your program,” he says.
Among the other findings:
- The number of charities that used two or more methods to communicate with donors during the year-end fundraising season increased over the course of the study. In 2016, only 5 percent of organizations used multiple communication channels, compared with 20 percent in 2018.
- Multichannel fundraising appears to bring in larger gifts. In 2018 organizations that communicated with donors in multiple ways had a median donation size of $302 compared with $273 for groups that communicated in a single channel.
Ready to learn more? Get your free copy of the study: Our Digital Dilemma.