Examining The Ins and Outs of How Donors Give

Nonprofit organizations and charitable causes that encourage donations know that the donor cultivation cycle does not lead to 100% donor retention. Rather, there is quite a lot of donor attrition that must be calculated into annual fiscal plans. Building relationships and paying attention to timelines and cultivation cycles can help ensure that these organizations remain financially healthy.

Donor Retention

Donor retention is every nonprofit's dream. While donor acquisition can be difficult, you need to hustle just as hard to retain even half of those donors year after year. The practice of donor retention involves engaging existing donors so that they'll donate again the following year. Two major elements of good retention practices are encouraging the donor to give according to a set schedule and making them feel valued as often as possible. There are many philosophies on what leads to a good donor retention percentage, which sits at around 40%. Some of the most popular ways of boosting retention rates include:

  • Investing in technology
  • Leveraging nonprofit data
  • Improving communication
  • Asking for a second gift sooner rather than later

Donor Attrition

The donor attrition rate is the rate at which donors do not renew their gifts each year. This is expressed as a percentage of all given donors in a given year. The average donor attrition rate currently hovers between 60 to 65% across the nonprofit sector. If you have 10 donors, then you could reasonably expect four to give again the following year.

When it comes to donors who do not renew their gifts, there could be many determiners at play. One common reason why donors don't renew is that they feel as though the charity or cause doesn't need them. While this can be perceived as a happy thing because it communicates strength, you always want donors to feel as though they're playing a small role in an important agenda. When donors do not feel as though they are being properly recognized or thanked, they may stop giving.

Another reason donors may withdraw their support is that they don't know where their contribution has gone, or worse, are misled. If donors don't feel as though they have enough of a voice as to where their contributions end up, they could walk away.

Donor Attrition Continued & Additional Takeaways

When your donor attrition rate is trending in the wrong direction, there could be many reasons why. The best you can do is try to be transparent, handle your business with integrity, and do your best to honor donors and prospective donors in your attitude toward them.

Diversifying your funding sources will serve you in the long run, because you can't count on donor retention. However, you can count on an average rate of attrition, meaning you just won't see some of those contributions again. One way to honor those who do contribute and maybe help them to lean into being a repeat donor is to employ donor recognition trees. Visit Donor Recognition to find the perfect donor recognition tree to honor your donors today.