The Fundraising Effectiveness Project just released its 2015 Donor Retention Supplement. The supplement, which is full of easy-to-understand charts and graphs, can be found here.
The complete report outlines in layman’s terms just what insights the data is revealing. Here are my top three takeaways from the report:
1) The Immense Value of Retention
This section of the report explores just what a 1% change in any nonprofit organization’s donor retention can mean in terms of dollars added immediately to the current year’s revenue budget.
This is not trivial!
The amounts illustrated in the chart below can be a game changer for your mission by providing direct dollars to the mission or indirect dollars such as an additional staff member or new equipment or even new software to leverage future success.
Here is an excerpt from the report stating how the values were obtained. This can and will work for your organization whether you raise $100,000 or 10 million dollars annually.
This calculation was done in the following manner: the value of 1 percentage point is the total value of the donors retained for an organization, and then divided that by the percentage retained.
Repeat Donor Revenue = Revenue from donors that gave both this year and last year.
An example is if an organization retained 50% of their donors and the revenue retained was $500,000 the relative value of a percentage point is $10,000, or 50 * (1%) * $10,000 = $500,000.
Imagine the impact of either a 5% or 10% change?
The best part is this is well within the reach of any organization involved in fundraising. Just having a tool to measure donor retention daily could move the needle 1 to 2% annually by helping your team be aware of how important it is.
2) The Vast Difference in New Donor Retention VS Repeat Donor Retention
One of the hidden secrets of fundraising is what happens when a brand new donor becomes a repeat donor in regards to retention. The retention rate more than doubles once a donor stays involved into the second year!
Notice the difference in the two charts below:
This monumental difference is well worth noting and working toward for every first time donor.
This requires extra care and attention for those first time donors. The ongoing annual revenue gained after they become repeat donors will almost always cover any expenses associated with the increased effort toward follow-up in the donor’s first ninety days with your organization.
3) 25% of NPO’s Reported Achieve a Retention Rate of 54.4% or Higher
This proves that an overall retention rate well above 50% can be achieved and maintained by your organization. In fact, as you can see in the chart below a full 15% of the group maintains an overall retention rate of 60% or higher.
Make sure your organization strives for these higher rates. Like so many such items in our lives, setting the goal higher than just the normal bell curve average is the first step to making it a reality.
Those are my top three. If you picked out another one or two worth noting, please let us know in the comment area below.
I trust the three key points from the supplement mentioned above will provide the incentive to create a complete game plan on improving donor retention for your organization.