Every single nonprofit board I have been part of has scheduled at least one if not several board meetings during the first year to discuss strategies for acquiring new donors.
Don’t get me wrong, those board meetings usually produced excellent ideas, many of which the fundraising team actually put into action and generated superb results from.
But never have any of the meetings ever included a discussion regarding the strategy to help secure a second gift from a first-time donor!
In fact, a relatively new board member would assume that the overall game plan is to keep securing more and more new donors in order maintain or grow fundraising related revenue.
Donor Retention VS MPG
In all fairness, over the last 3-5 years the topic of donor retention has been introduced into a few board and development committee discussions. There has been an upward tick in awareness of donor retention. However, understanding of the subject, especially the key factors that can actually influence donor retention rates seem to be lacking in most situations.
Donor retention is a very key indicator of fundraising success. Just knowing the number without any knowledge of how to influence it may lead to more frustration than actually increasing success. An analogy might be knowing your vehicle’s gas mileage (MPG) without knowing about any of the factors that might influence the mileage in either direction.
Perhaps one could experiment and see what factors are moving the number, but only by meticulous record keeping will you isolate which factors are causing what. This is a scary proposition for everyone except those with an understanding of research, and for the vast majority of small and medium nonprofits who do not have any professional fundraising systems or databases.
Biggest Factor Influencing Donor Retention
Rather than ask professional fundraisers to attempt the meticulous record keeping mentioned above to isolate just what factors or activities properly influence donor retention, we can fortunately turn to proven scientific research.
This research highlights many factors. Here are some general background concepts that will help those of you new to the subject.
One of the leading researchers on donor retention is Bloomerang’s Chief Scientist Adrian Sargeant who has spent more than two decades finding the key factors through extensive research.
His research is literally much of the backbone of establishing what factors have the highest impact on donor retention.
Among the vast number of factors influencing donor retention, one factor emerges as the biggest. This is especially true regarding relatively new donors to any organization.
If you read the title of this blog post you have already guessed what that factor is.
Securing a Second Gift is the Top Factor
Why is that the case?
Once a donor donates the second time we have moved beyond impulse giving from special event purchases or memorial/tribute gifts. They are now truly supporting your mission by consciously choosing to provide funds.
This is quite powerfully illustrated by the image below showing the difference in retention rates of first time donors when compared to the retention rate of donors after a second gift is made. Notice that the donor retention rate is more than three times larger!
(This image is reflecting data compiled over the last decade by the Fundraising Effectiveness Project from actual nonprofit databases throughout the United States.)
So we now know the answer to the question: Just how important is a donor’s second gift?
It is the largest factor effecting donor retention for any nonprofit engaged in fundraising!
Those organizations and fundraisers who pay close attention to ensuring as many second gifts are obtained from first time donors as possible will enjoy funding their missions at higher levels for years to come.