Our team spends considerable time helping our clients understand the data of donor retention. We fundamentally believe that a client’s donor retention rate is an indication of the health of their donor relationships.
Donor retention measures how many donors continue to donate to your organization year after year. The math results in a percentage that helps inform your fundraising strategy, plan, and budget.
Donor attrition, on the other hand, is the percentage of donors that stop giving. For example, if your donor retention rate is 40%, that means your attrition rate is 60%.
What does donor attrition cost your organization? We must look beyond the transactional reality of how many donors you are losing and realize the relational impact of the data.
When organizations don’t use donor retention data for building goals and projections, the result is a “fill the gap” budget that sets unrealistic expectations for fundraising staff. It’s difficult, and sometimes impossible, to achieve those numbers, which often leads to the departure of development staff members.
Every time a development staff member resigns, the organization’s donors must build a relationship with someone new. An executive director shared that one of her major donors had no interest in meeting the new development director because odds were that the new hire would not stay long. She “didn’t want to build another new relationship.” Ouch.
Another donor shared with a colleague that she was tired of “feeling like an ATM.” That donor was solicited over and over but no one was stewarding her. She truly wanted to understand the impact of her gift, but all she was getting was another ask. When an organization is short staffed, or the staff keeps changing, then the work is typically driven to a frenzy to meet budget. But there is a cost when your donors are not properly thanked and engaged.
The issues are compounded by a loss of knowledge. It takes time for a new staff member to understand an organization’s programs, services, budget, and impact – and how to speak about them in a compelling way. It also takes time to get to know the donors and what their interests are. Communicating with confidence and ease comes with time, but time is often short because of the constant loss of both staff and donors.
While retaining staff and donors is critically important to the health of your organization, we cannot forget that the most essential relationships are those who benefit from your mission. The people and places that your organization serves rely on your organization’s success. When the donor retention rate is low, it means that the organization is spinning its wheels to meet its goals, making it all the more difficult to achieve mission impact.
Reflect on your organization. What impact is donor attrition having on your staff, your donors, and the beneficiaries of your mission?
We believe that nonprofits are essential for a healthy society, and our vision is centered on thriving communities and families through highly effective nonprofits. We encourage you to focus on the impact that your donor retention rate is illustrating to minimize the costs to your mission and your bottom line.
Article By: Kerri Laubenthal Mollard, Founder & CEO
