Donor Retention Should be a Focus in 2018

The best way to raise more money is to get more new donors, right? Not so fast.

Yes, donor acquisition is definitely a way to raise more money. New donors = new money. But, what about those donors you already have in your database? Those supporters who know your work is worthwhile and have already invested in your work? Focusing on engaging current (or lapsed!) donors and turning them into loyal donors year after year is what donor retention is all about.

Think about: How (and how often) do you follow up with donors and show them how you used their gift to better the community? How are you analyzing your donor database and making the ask to upgrade donors who should be ready to increase their giving to a higher amount? Are you making it obvious to these current donors that you appreciate them and their support year after year?

If this isn’t already top of mind in 2018, start thinking about it now.

How to Calculate Your Donor Retention Rate

Let’s see how you’re doing when it comes to donor retention. You’ll measure this with your donor retention rate: what percent of donors that gave in one 12-month time period also gave again in the following 12-month time period?

To calculate your donor retention rate for 2017 you’ll need to pull two figures from your fundraising software.

• How many donors gave in 2016?
• How many donors gave in both 2016 and 2017?

Network for Good customers can watch my video below and I’ll show you which filters to use to quickly get these stats.

You’ll then plug those figures into this formula and X 100 to get your donor retention rate:

Number of donors who gave in both 2016 & 2017
Divided by
Number of donors who gave in 2016
Multiply by 100

You might be wondering, “why can’t I just use my 2017 total donor count divided by my 2016 total donor count?” Network for Good recommends not calculating your donor retention rate this way because it won’t truly show you WHO you are retaining year after year. If you acquire more donors in 2017 and they help fill in the gaps for the ones you lost, that’s great. However, it won’t really show you who you have retained year after year. It just means you are pouring in the right amount of donors into your donor management system to keep up with the pace of those current donors who are leaking out.

Knowing your donor retention rate is important. It’s a good way to measure the health of your fundraising programs. You want to be spending resources and using your time wisely. Right? Getting more new donors is just as important as keeping the ones you already have (and the ones that you already used resources to acquire). It’s much more cost effective to improve your donor retention rate than it is to increase your donor acquisition rate.

We have amazing Fundraising Data Calculators you can download to help you plug in your numbers for donation rates, campaign ROI, and several others, to set your metrics for the year and support your fundraising plan and retention strategy.

What to Do Next?

If your retention rate is high, keep up the good work. Continue to engage with those donors and encourage them to give (and increase their giving) this year. Tell them stories that matter. Send them relevant content.

If your donor retention rate is low (the average donor retention rate hovers around 45%) start putting some things in motion to be intentional about retaining 2017 donors in 2018 (and even engage lapsed donors from 2016, too).

Want some additional donor retention guidance? Watch our archived webinar with fundraising expert, Barbara O’Reilly, 5 Tips for Building Stronger Donor Engagement and Raising More Money.