Donor Retention

Recently our friends at AFP released the 2015 Fundraising Effectiveness Report. There is some really great stuff in the report. Retention still seems to be a challenge for most nonprofits. There is some good news, in that some nonprofits are showing gains. Averages don’t show that there are top performers so it can be done.

Here are a few findings that I just have to share:

• For every 100 donors gained in 2014, 103 were lost through attrition. That’s a NET LOSS of 3%!
• Every $100 gained in 2014 was offset by $95 through gift attrition! This nets out to a sad 5% gain.
• The good news shows the net gain in amount of gifts for top percentile (20% of organizations) was a gain of 100.6% on average. Compared to the bottom percentile, the average loss was a decline of 44.6%. Some nonprofits are finding a way to beat the averages.

With regards to donor retention, check out these numbers:

• The donor retention rate was 43 percent in 2014 (Median). That is, only 43 percent of 2013 donors made repeat gifts to nonprofits in 2014.
• The gift retention rate was 47 percent in 2014 (Median). That is, only 47 percent of 2013 dollars raised were raised again by nonprofits in 2014.
• Gains of $3.611 billion in gifts from new, upgraded current, and previously lapsed donors were offset by losses of $3.438 billion through reduced gifts and lapsed donors. This means that, while there was a positive $173 million net growth-in-giving, every $100 gained in 2014 was offset by $95 in losses through gift attrition. That is, 95 percent of gains in giving were offset by losses in giving for a net gain in gifts of 5 percent.

At a high level, we need to think about:

• How are we doing at renewing donors? What kind of experience do our donors have that contribute to renewal?
• Are our current results from renewal good enough?
• How soon do we want (or need) to double our income?
• What is the right balance of acquisition and renewal of donors to get us there?

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