In a nationwide study of nearly 10,000 nonprofit organizations conducted by the Association of Fundraising Professionals (AFP) in 2016, on average only 46% of the donors who gave in 2015 also gave in 2016! AFP reports only 5% of their sample with retention rates above 68.5%.
Those are shocking numbers. A 46% retention rate in one year means an organization would have to replace 54% of their donors in the following year just to keep even with last year. That percentage is probably even higher because often new donors don’t give at the same level of many past donors.
Christian Ministry Donor Retention
Advocace’s own research on two sectors of Christian nonprofit organizations indicates some ministries fare better. We found retention rates in the 63 – 67% range. Much better.
But, still, that means a ministry needs to replace about one-third of its donors every year just to stay even with the previous year’s donor-base size. That’s a huge challenge when one is competing for income with many other nonprofit organizations.
Many ministries have been distracted from addressing their donor retention rates because they see their gift income increasing every year. But if your ministry’s gift income is increasing while your number of donors is flat or decreasing, that means you are relying more on the same or even fewer donors who have increased their giving. This works well in the short-term but can hurt your ministry significantly in the long-term.
Do you know what your donor retention rate is?
To find out, you simply list all donors who gave, for example, in 2016 and check how many of them also gave in 2017. How does your rate compare to the AFP numbers or the percentages obtained from Advocace’s research?
How to Improve Your Donor Retention Rate
So, how do you go about improving your retention rate? Here are four ways:
- Establish a trend for donor retention.
In addition to the 2016/2017 rate calculated above, compute the same rate for 2014/2015 and 2015/2016. Has your retention rate increased, decreased or remained flat over the past three years?
- Set a realistic goal for improving your retention rate.
It’s unlikely that you will see a dramatic increase in one year. But, for example, an improvement of just 1% will mean more income for your ministry. Advocace recommends setting a goal in the 1 – 3% range. Even 1 – 2% a year over five years will make a big difference.
- Conduct a realistic audit for your communications with donors.
- How frequently do you communicate with them?
- Do you regularly remind them of your vision for the ministry in terms of outcomes or results you expect to see? How often do you share your ministry goals?
- How often do you share stories of the changes that take place in the lives of people you are ministering to?
- How often do you thank donors for their support? What methods do you use to express your appreciation?
- Brainstorm ways you can minister more effectively to your donors with the whole development staff.
There are so many ways you can do this:
- Send reply cards in your direct mail program and ask donors how you can pray for them. Then actually pray for them and let them know you did.
- Divide your donors among staff members and make the commitment to pray for every donor at least once a year. Of course, it’s most effective if you tell them in advance you are praying for them.
- What other methods can your team come up with?
Improving donor retention rates is an absolute must for healthy nonprofit ministries.
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