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New Study Shows Donor Retention Rates Are In Decline
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When attending elementary school back in my small rural town, which did not have a public library, I literally ran to the mail box each Friday morning to feed my desire for something new to read.
You see, every Friday a new edition of the Weekly Reader magically arrived in my mailbox complete with new stories and amazing facts and figures to devour.
I find myself doing the same mental exercise regarding the Donor Retention Supplement to the Fundraising Effectiveness Project’s 2016 findings!
This is the ONLY place where actual data results are compiled for thousands and thousands of small to medium size nonprofits from actual donor databases provided by not one, but by multiple vendors! It is quite unique and very special to have such a cross-section of live data being used daily by all types of nonprofits engaged in fundraising.
Latest Results Are In
Those of us involved with this project from its very first month of existence truly look forward to seeing whether the current results have improved over the previous year and if by chance those results have set an all time record.
In case you are wondering, Donor Retention rates did move downward compared to the previous year!
Here are the overall results:
- Overall donor retention: 46% (average)
- New donor retention: 23% (average)
- Repeat donor retention: 60% (average)
Let’s simplify: 5.5 donors out of every 10 donors do not return to give even a penny the next year!
Please read that last sentence a second time, slowly, before moving on.
We are not even keeping one half of the donors we worked so hard to cultivate just the year before!
To make matters worse, both new donor and repeat donor retention declined again as it has nearly every single year since these findings were released for the first time in 2008.
Now let’s dig a bit deeper to see what else the data is revealing…
The Immense Value of a 1% Change in Donor Retention
My favorite part of the entire set of supplement findings is the clarity in which the impact of just a 1% change to the positive can be in real dollars for various size charities.
This can often be achieved by implementing a more personalized thank you program. If done correctly, such personalization could mean changes of 2 or 3%!
Here is the chart:
Notice that even an organization raising one million a year would see a value uplift of more than $20,000 via only a 1% improvement. Just think would a 10% improvement could mean to any organization’s mission dollars.
Focus on Moving New Donors to Repeat Donors
My final takeaway is sharing the unbelievable difference in donor retention rates between first-time donors and repeat donors. Look closely at the two charts below:
It is nearly a TRIPLING of the donor retention rate once a donor gives for the second time! If you calculate donor lifetime value, your organization will see dollar amounts that could revolutionize your mission impact!
The findings revealed by such analysis will be so outstanding that many in a leadership role at your charity will refuse to believe it. Such findings and results can and should lead to greater focus and spending on donor stewardship. If this is done properly your donor retention will soar and mission dollars will flow in at a rapid pace!
In our next data pull and reporting, numerous organizations will retain donors at rates above 75%. There is no reason your organization could not be one of them!
Get a Database Health Check with Bloomerang!
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