How to Improve Nonprofit Donor Retention Strategies

Nonprofits have it rough. In order to keep your doors open, you need to get plenty of donations, grants and other forms of funding that depend on the goodwill of outside sources. This can be a challenge, to say the least.

Fewer donations, mo’ nonprofit problems!

Moreover, a one-time donation won’t fund your organization for years to come. Instead, you rely on donors to give regularly over long periods of time. This is known as donor retention, which can make or break a nonprofit. It’s vital that you make retention a donor management priority.

We spoke to several experts to get their advice on some top nonprofit donor retention strategies that will help you keep doing good in the world.

1. Qualify & Prioritize Donors

Before you figure out your best strategies to retain donors, you first need to focus specifically on which donors to retain.

Greg Warner, founder of nonprofit donation strategy firm MarketSmart, points to a vitally important statistic you should pay attention to—donor retention rates are in decline. As Warner notes, “The number of donors giving to charity keeps declining while total charitable dollars keep increasing. In other words, there’s been a narrowing of the funnel. And this trend will only continue.”

This means that rather than wasting time, money and resources on chasing after all of your donors, you should prioritize the donors on whom to focus your greatest efforts. Warner reiterates, “Fewer people are giving more! Therefore, trying to retain all donors is not necessarily a good plan, especially because donor retention tactics are expensive and time-intensive. But trying to retain the most qualified donors (the ones with the most passion and most money) is a good plan.”

The key way to do this, Warner explains, is by surveying your donors in order to learn more about them. In this way, you can “communicate with them in a highly relevant and personalized way that will be meaningful and will result in steady giving.” Indeed, paying your donors this kind of personalized attention is the next strategy on our list.

2. Provide Personalized Attention

In order to appeal to your top donors, you need to provide them with highly personalized attention. But what does this actually mean in practice?

Adam Martel, CEO of fundraising software vendor Gravyty, likens this process to “an efficiency puzzle where the key is to focus on the most important donors (the donors who are likely to make the biggest gifts the soonest) at the most opportune times. This will result in fundraisers being able to inspire donors who have both capacity and affinity to make the largest gifts the soonest.”

Martel suggests a number of specialized techniques to engage these important donors:

• Introduce personalized direct mail and marketing programs
• Leverage volunteers who can encourage fundraising among peers
• Increase outreach to make sure that “the most inspirational fundraisers get in front of more of the organization’s most important donors.”

This means that “fundraising” shouldn’t just be done in the form of occasional drives and other active events. As Cedric Savarese, founder and CEO of FormAssembly, explains, “We see our nonprofit customers having greater success when they engage their donors throughout the year, whether it be through surveys, stay in touch forms or another means of communication and connection.”

Mark Gerber, regional sales manager at Metafile Information Systems, Inc., adds that it is also crucial to make sure your donors feel like they are a part of your organization. They will be more likely to give more if they believe that they are a part of your team, and not just a cash cow.

Building strong relationships helps donors see the impact they make, according to Gerber, who notes, “It’s vital that fundraisers keep in mind that donors are more than just sources of monetary contributions, but valuable assets to your team and imperative to the success of your fundraising efforts.”

Of course, you can’t expect everybody at your nonprofit to know the entire giving history of every major donor. That’s where having an up-to-date database becomes crucially important.

3. Build and Utilize a Database

If personalized attention is crucial to retaining donors (and it is), then you need to make sure that part of your strategy involves maintaining all of the information you need about those donors.

The best way to do this is with a database that all of your fundraisers can access. Personalized note-cards may work for one person, but that leaves the rest of the organization in the lurch if that fundraiser leaves or is unavailable.

Michael Scott’s data management strategy might work for him, but it won’t help with donor retention

According to Rich Palmer, co-founder & CTO of Gravyty, “the collection and strategic use of data is important, if not the most important thing, for donor retention. Once a donor has given a gift, you know so much about them. Who they are, when they gave, what they are interested in, what events they attended, what they are saying about your organization online, etc. It allows you to craft your follow on outreach in ways that drastically improve return on investment and create personalization at scale.”

In practice, this means you’ll need to make an investment in software, if you haven’t done so already.

4. Use Software to Help

Nonprofit software comes in a variety of forms, but when it comes to donor retention, there’s two types you’ll want to focus on—constituent relationship management (CRM) software and/or donor management/fundraising software.

The differences between these two types of software can be subtle:

• Nonprofit CRM software focuses on maintaining and improving your organization’s relationships with all outside parties

• Donor management and fundraising software focuses primarily on your relationship with donors, providing functionality that will make it easier to accept and process their donations.

Fortunately, many of the available software suites can serve both of these functions.

Jackie Lam, senior product manager at mobile fundraising platform Classy, notes that these software types can provide numerous benefits that encourage donor retention:

• Donation web pages can be optimized for recurring donors

• Recurring billing configurations can match a donor’s personal needs (i.e. different frequencies such as annually, quarterly)

• Machine learning can help identify supporters that are highly likely to become recurring donors, and can help produce personalized messages

• Recurring donations can be skipped for given months, reducing the risk of cancellations

• Software can help identify recurring donors who are likely to cancel. This can help organizations reach out to these donors and communicate the impact of their support

In addition, some donor management software suites provide scoring algorithms that can help with the very first tip on this list—qualifying and prioritizing donors. They can analyze the interactions that you have with donors and help identify ones are ready for outreach and the most likely to make big gifts.

With these nonprofit donor retention strategies at work, you’re well on your way to keeping those donations rolling in!

Next Steps

If you want to give yourself the best chance to lose the least number of donors, then you’ll want to learn more about how nonprofit software can help you do that. Here’s some steps you can take to learn more:

• Read user reviews of donor management software to see how other nonprofits have used these systems to help improve their donor retention rates.

• Email me at andrewfriedenthal@softwareadvice.com for more information. I’m happy to help you figure out what your own donor management software needs might be and to connect you to one of our expert software advisors for a free, no-obligation consultation!