Donor retention is among the most critical yet often overlooked factors in nonprofit success. While acquiring new donors is exciting, keeping existing donors engaged and giving consistently to reduce donor churn sustains organizations in the long term. However, donor retention is challenging; organizations must find methods to boost it.

This is why you need proven donor retention strategies to help you build a thriving community of supporters and generate steady revenue from donations. Our guide explores donor retention, the challenges of retaining donors and members, and the best strategies to keep these participants connected with your organization. 

Do you need expert digital marketing and media services specific to nonprofit marketing? Contact NextGen and let our team help you today!

What Is Donor Retention and Why Does It Matter?

Donor retention measures a nonprofit’s ability to keep its donors returning year after year. This metric measures the loyalty and ongoing commitment of your donors and members. On average, nonprofit organizations can retain just over 42% of their donors and members.

Retaining these participants is much more cost-effective than acquiring new ones, with acquisition costing around $1.50 per participant and retention costing $0.20 per existing donor. This statistic highlights the revenue importance of maintaining positive member and donor relationships to keep them engaged with your organization and maximize their value. 

When donors and members feel valued and connected, they’re more likely to continue giving and often provide larger amounts over time. A high donor retention rate helps nonprofits plan better, invest in impactful programs, and build a sustainable funding base.

Common Reasons Why Donors Stop Giving

Donors don’t always disappear because they lack generosity. Here are a few primary reasons why they may stop contributing to your organization. 

Lack of Communication or Feeling Unappreciated

They’ll lose interest if you don’t regularly communicate with your donors or make them feel appreciated for contributing to your cause. And, of course, if donors lose interest in your organization, they’ll most likely stop donating, resulting in a low donor retention rate. 

To overcome this, set up automated email newsletters and drip campaigns to maintain consistent communication with your donors. For example, set up a welcome email when donors sign up for your email list and send a thank-you email after each member or donor receives a contribution. You should also share your fundraising efforts, engage donors through content tailored to their preferences, and ask for amounts specific to their donation history.

It’s critical to personalize donor communications to create a more participant-centric approach. This approach includes using their first name in your email copy and creating donor segments based on data and insights about how they engage with your organization.  

Feeling Disconnected From the Impact of Their Donation

Another common reason donors stop giving is feeling disconnected from the real impact of their contributions. To reduce donor attrition, it’s essential to keep supporters closely connected to your mission and show them exactly how their donations make a difference. 

Sharing compelling impact stories, detailed updates, and tangible results through newsletters, videos, or social media helps donors see the value of their support. Regular, transparent communication reinforces their role as vital participants in your cause, making them more likely to stay engaged and give again.

Poor Donation Experience

Another factor that impacts recurring donors is a poor donation experience. If it’s challenging for donors and members to participate in or contribute to your cause, your donor retention rate will decrease. When you encourage donors to contribute, it has to be straightforward for them to do so. 

For instance, ensure your donations page is mobile-friendly and accessible to many mobile web visitors. Your call-to-actions (CTAs) should also be clear so members and donors know how to make contributions, and you must remove any friction points in this experience (slow loading times, complicated forms, etc.). 

In addition, it offers multiple payment options, such as card, PayPal, EFT, and even crypto. Another excellent way to improve the donation experience is to include trust badges on the donations page so web visitors feel secure making online contributions. 

Changes in Personal Finances 

If donors experience changes in personal finances, this can be a direct reason for them to stop making contributions. There isn’t much a nonprofit can do to avoid this, but you can lower your asking amounts to these donors. You’d pinpoint which donors are experiencing this problem by identifying those who have stopped contributing and sending them a survey to understand why.

Not all donors want to stop donating to your organization; some lack the financial means. In this case, besides requesting lower donations, encourage these participants to get involved with your organization in other ways, such as volunteering or referring your nonprofit to their friends and family who are likely to donate.

How to Calculate Donor Retention

To calculate the number of donors your nonprofit is retaining, divide the number of donors from last year who donated this year by the total number of donors from last year and multiply that number by 100.

For example, if you had 600 donors from the previous year and 200 of those donors contributed again this year, the calculation would be:

(200 ÷ 600) x 100 = 33.333%. 

You should calculate your donor retention rate annually to compare your donor retention strategies year over year. However, if you want a more granular view of your average donor retention rate, you can calculate this metric quarterly. 

Essential Metrics to Calculate for Donor Retention

While donor retention is a key metric to calculate and evaluate how many of your participants continue contributing, there are also additional metrics to track and assess your overall performance. 

A few of these metrics include:

Donor Lifetime Value

This metric evaluates the total amount a donor or member contributes over the entire duration of their relationship with your organization, revealing the overall value they provide to your nonprofit. 

Donor Acquisition Cost

Your donor acquisition cost is the amount of money you invest in acquiring each donor. It’s crucial to keep your donor acquisition costs as low as possible to maximize the value you derive from these donors and members.  

Donation Frequency

Tracking donation frequency is essential as it measures how often donors and members contribute. If you notice a low donation frequency, it indicates that you need to encourage donors and members to make more regular donations. 

Repeat Gift Rate

This metric measures the frequency of donors who give more than once. Ideally, you want repeat donors, so do your best to maintain a high repeat gift rate. 

Donor Attrition Rate

Your donor attrition rate is the percentage of donors or members who stop giving donations. If you notice an increase in your donor attrition rate, it’s crucial to employ strategies to keep donors and members engaged. 

Reactivation Rate

This represents the percentage of lapsed donors who return and continue to contribute. When your reactivation rate improves, this means your re-engagement tactics are working.

Donor Retention vs. Donor Acquisition: Where to Focus

Many nonprofit organizations feel pressured to constantly acquire new donors so that, in case donors lapse, they still have donations coming in. While acquisition is critical, it’s best to focus on retaining your current donors and members rather than finding new ones. Donor retention costs five times less than donor acquisition, and retained donors give 42% more in one year than new participants. 

Suppose you focus more on creating long-lasting relationships with existing participants. In that case, you’re more likely to turn them into loyal brand advocates who can contribute more toward your cause and refer your nonprofit to friends and family.

On the other hand, if you constantly lose donors and have to acquire new supporters, you’ll invest most of your resources and revenue in this, making it more challenging to achieve loyalty and advocacy. 

So, while donor acquisition is critical, you need to increase donor retention and balance these strategies to deepen relationships with current donors and members while finding cost-effective solutions for acquiring new supporters. 

Proven Strategies to Improve Donor Retention

Effective donor retention strategies are essential for maintaining recurring donors and members. Here are a few techniques to keep donors engaged in your nonprofit organization and maintain high-value contributions. 

Say Thank You Promptly

When donors and members contribute to your fundraising campaigns, you must send them a heartfelt thank you to make them feel appreciated. Donors who receive a Thank You note within 48 hours are four times more likely to give again and give up to 40% more in future donations, increasing their lifetime value. 

Don’t focus only on thanking major donors who contribute the most high-value gifts; ensure you show appreciation and gratitude to all your donors to keep them connected to your cause. There are many ways you can do this, including social media, email newsletters, or direct mail.

This strategy is an effective way to improve donor retention rates, but you must ensure your Thank-You letter is unique and aligned with your brand style and voice.

Here are tips on how to thank donors to maximize retention:

• Send a Thank You Letter Promptly: Fast communication shows professionalism and appreciation, so send your Thank You letter within 24 or 48 hours of receiving a gift. 
• Personalize Your Thank You: Include your donor’s name and contribution amount. Reference specific information about your donor or member to make them feel seen.
• Be Specific About Impact: Explain exactly how their donation will make a difference. Share stories, statistics, or upcoming projects their gift supports to connect their generosity to real outcomes.
• Use Multiple Channels: Express thanks using handwritten notes, personalized emails, phone calls, or even video messages.

Regular Updates

Members and donors want regular updates to know what difference their gifts make, how your organization uses their contributions, and how your campaigns are progressing. Regular updates keep participants engaged and up-to-date with your organization, reminding them of your cause and why they should donate. 

Consistent communication is also an effective way to retain returning donors, make donors feel involved in your activities, and persuade prospective donors to contribute. However, to maintain a balance, you should avoid overwhelming your supporters with information and communication. 

Limit email newsletters to about two to three times per week, make occasional phone calls about one to two times yearly, and share impact stories donors can resonate with quarterly. 

Tips on sending regular updates to increase donor retention:

• Set a Consistent Schedule: Choose a regular cadence for updates and stick to it. Consistency is vital, so donors look forward to hearing from you. 
• Use Multiple Formats: To expand your reach, create a mix of newsletters, impact stories, videos, social media posts, and blog posts.
• Share Stories, Not Just Numbers: Share real-world stories of individuals and communities benefiting from your participants’ donations. 
• Include Clear Calls to Action (CTAs): Make your CTAs clear and actionable. Members and donors should know right away which action they must take. 
• Keep It Concise and Visual: Keep your updates concise and include images and videos so donors visualize how their contributions make a difference. 

Personalized Communication

Generic communication won’t make donors feel appreciated and acknowledged by your organization. Ensure your tailored messages are relevant to donor interests and giving history. You should mention their names in your communication and create donor segments to personalize communication as much as possible.

Personalized donor communication can increase donor retention by 27%, highlighting how critical tailored messaging is. For example, you can use email marketing software to send automated or triggered emails when donors join your email list, donate, haven’t donated, or request information from your cause.

In addition, leverage in-depth insights and data to understand donor behavior and personalize communication.

Here’s how to personalize donor communication for improved retention:

• Use Donor Names and Details: Always address donors by their preferred name and reference their specific donation or involvement. Avoid generic greetings like “Dear Supporter.”
• Reference Past Giving and Impact: Acknowledge previous gifts and highlight the difference those donations have made. For example, “Thanks to your generous gift last year, we were able to…”
• Tailor Appeals and Requests: Match your fundraising asks to donor behavior. For example, invite monthly donors to upgrade their gifts or ask event attendees to participate in upcoming campaigns.
• Celebrate Personal Milestones: Send special messages on birthdays, anniversaries of their first gift, or other personal milestones to deepen emotional connection.

Use Surveys for Donor Feedback

Surveys are an effective way to gather donor feedback. You can create engaging, easy-to-answer surveys and share them via email and social media. Gathering donor feedback will help you understand why donors stay with your organization, why they stop donating to your organization, what difficulties they experience while making contributions, and how to improve your overall value proposition and performance.

Keep your surveys frequent and ask relevant questions to specific donor segments. For instance, you could create tailored surveys for major donors and other surveys for participants who haven’t engaged with or donated to your organization in a while.

These are examples of practical survey questions to ask to improve your donor retention efforts:

• What motivated you to make your most recent donation to our organization?
• How satisfied are you with your overall giving experience with us?
• What aspect of our mission or work resonates most with you?
• How would you prefer to receive updates and communications from us? (Email, phone, mail, social media, etc.)
• What type of content do you find most valuable? (Stories, impact reports, newsletters, event invitations, etc.)
• Do you feel that our organization values and appreciates your support?
• Have you ever participated in our events, volunteer opportunities, or campaigns? If not, would you be interested in doing so?
• Are there any programs or initiatives you would like us to focus on in the future?
• Would you recommend supporting our organization to friends or family? Why or why not?

Engage Beyond Giving

Once donors and members contribute to your organization, retention efforts shouldn’t stop there. Continue engaging with participants and invite them to live and in-person events, volunteering opportunities, and any fundraising campaigns where they can get involved. Donors may want to get more informed about and engaged in the nonprofit sector, so invite them to events they may feel most interested in.

This approach builds relationships with donors after they’ve contributed, making them feel special, and your organization acknowledges them. It also gives them a sense of purpose and lets you connect with them further.

Personalization also plays a critical role here—invite donors to events and campaigns that resonate with their values. For instance, if a donor or member recently contributed to a climate change campaign, they’ll most likely want to attend an event that aligns with this cause.

Here are tips to engage donors and members beyond giving:

• Invite Them to Events: Host virtual or in-person events like workshops, webinars, tours, or celebrations. Donors and members can meet your team, see your work firsthand, and connect with other supporters.
• Offer Volunteer Opportunities: Volunteering deepens emotional investment and creates personal connections to your mission.
• Share Behind-the-Scenes Content: Give supporters an insider look at your work through photos, videos, or stories about your team, projects, and challenges.
• Create Ambassador or Leadership Circles: Invite passionate donors to join exclusive groups to contribute ideas, network, and help advocate for your cause.

Encourage Recurring Gifts

Encourage donors and members to make recurring gifts to keep them involved in your organization. You can set up automatic, recurring gifts that make it easy for them to join and become long-term supporters. These recurring gifts will become a regular income stream for your organization while creating a commitment between you and your participants.

57% of donors are enrolled in a recurring program, an increase from 46% last year, and recurring gifts make up 31% of nonprofits’ revenue. These statistics prove that recurring programs work for donors, members, and nonprofit organizations.

Tips for recurring gifts for donor retention:

• Make It Easy to Sign Up: Design your donation page with a clear, simple option to choose recurring giving.
• Explain the Benefits Clearly: Communicate how recurring donations provide steady support and allow your nonprofit to plan programs more effectively.
• Offer Flexible Options: Donors can select donation frequency (monthly, quarterly, annually) and easily adjust or pause their gifts at any time.
• Use Automated Reminders and Renewals: Set email reminders before credit cards expire and gentle prompts to renew or increase recurring donations.

Using Software to Boost and Automate Donor Retention

Today, technology offers powerful tools for nonprofits to track donor behavior, segment audiences, and automate communications. Investing in donor management software is essential to simplifying and automating complex processes and helping nonprofits save time. 

Here are a few examples of donor management software to streamline retention:

• CRM Systems: Organize and manage detailed donor information, track interactions, and monitor engagement over time.
• Email Marketing Platforms: Enable nonprofits to send personalized, targeted email campaigns and automated thank-you messages, keeping donors informed and engaged.
• Analytics Tools: Track donor database, giving trends, and campaign performance to help you make strategic decisions. 
• Fundraising and Donation Management Software: Processes donations, manages recurring gifts, and facilitates online giving.
• Marketing Automation Software: Combines CRM and email marketing features to automate personalized communication based on donor behavior.
• Event Management Software: Organize fundraising events, track attendee participation, and engage donors before and after events.

Leveraging these tools allows nonprofits to deliver timely, relevant messaging that keeps donors connected and motivated to give again.

Increasing Donor Retention with NextGen

Donor retention isn’t just a fundraising tactic. It’s about building genuine, lasting relationships based on trust and shared values. When nonprofits invest in their donors, they cultivate a community of supporters who support their cause year after year. Long-term relationships pave the way for loyalty, making donor retention important for success. 

By understanding retention metrics, addressing common challenges, and implementing proven strategies, nonprofits can transform one-time donors into lifelong partners, ensuring their mission thrives far into the future.

Ready to improve your donor retention? Contact NextGen Fundraising today and let our team of experts help you!