3 Reasons Why Nonprofits Should Focus on the Donor Experience

Although it’s unclear exactly how the new tax law will impact charitable donations, nonprofits can’t afford to wait and see. Many nonprofits are now thinking of new ways to attract and retain donors to ensure that funding stays consistent.

According to research by the Association of Fundraising Professionals and the Center on Nonprofits and Philanthropy at the Urban Institute, the average donor retention rate in the U.S. after the first gift is around 45 percent. Without a focused effort to convert those one-time donors to regular, loyal supporters, nonprofits may struggle to generate enough new donations to reach their fundraising goals.

If tax reform isn’t a big enough reason for your organization to create a donor experience that will keep supporter relationships thriving, here are three others to consider.

It’s more expensive to attract a new donor than to retain one.

Bringing in a new donor requires a series of steps. You have to raise awareness, build trust, make an emotional connection, and facilitate the process of actually making the first gift. These steps take time and can be expensive to implement. To retain donors, on the other hand, you simply need to keep the donors engaged with you and your work by focusing on their experience with your organization.

Marketing costs alone eat up between 5 and 15 percent of a nonprofit’s total budget. Add to that your fundraising expenses, and you quickly realize how much your organization could save if you could convert the 55% of donors who only give once into regular supporters.

Committed donors will give to multiple projects.

If a donor is committed to supporting one of your programs, that person will likely want to give toward multiple projects within the program, or even to related programs. Loyal donors are already sold on the trustworthiness and effectiveness of your organization. They believe in your ability to use their donations to effect real change; so it’s easier to deepen the relationship and increase the amount or frequency of their giving.

As you communicate with these donors and share the impact of their most recent donation, you can use that opportunity to introduce them to other areas of your program that might interest them.

Regular donors will share insights that you can use to attract new donors.

While it’s impossible to read the minds of prospective donors to know what moves them to give, you can gain insight from your regular donors that effectively gives you that superpower. Talk to your loyal supporters and listen to what they tell you. What initially attracted them to your organization? What gives them the confidence to continue supporting your work? What gets them excited about a particular program? What do they like your organization to share with them? What aspects of your charitable programs would they like to see firsthand? What experiences have made the biggest impact on them? The answers you receive to these questions will provide you with the information you need to improve your regular donors’ experience and to attract new donors.

Planning and creating a donor experience that grows relationships and causes donors to increase their support takes time and energy. Take heart. The benefits your nonprofit sees will be worth many times over the resources you put into it. Organizations that focus on retaining donors as well as acquiring new ones will also be better positioned to weather the changes that come as a result of the recent tax reform. You’ll have confidence that your programs will remain funded and thriving.

Learn why the donor experience is vital to a successful organization and how to implement an effective donor experience program by downloading this white paper “A Better Donor Experience: Is it the Cornerstone of Donor Loyalty?”