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The team from Charity Navigator, the nation's largest independent charity evaluator and leading donor advocate, shares their thoughts on emerging nonprofit-sector issues and offers tips to better inform your intelligent giving decisions.

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Monday, November 2, 2020

What is Donor Retention and Why Should I Care?

Does it feel like charities have a way of getting in touch with you everywhere? Do they show up in your mailbox, your inbox, and even call your home?

At Charity Navigator, we’ve heard from many donors who say this approach is annoying. Some are irritated by the number of solicitations they receive from organizations, others question the efficiency (and legitimacy) of charities who solicit donations over the phone.

While we’re not here to defend these fundraising strategies or verify their efficiency, we do understand why charities are interested in reaching you. Before you recycle that mailer, delete that email, or hang up the phone, here are a few things to consider...

Like the charities we evaluate, Charity Navigator is a nonprofit organization. We rely on contributions from the people who use our service to continue providing new and updated charity evaluations, giving tips, and other resources. We are grateful to have a subset of loyal supporters who give year-after-year, but we, like many of our peers, continue to face a difficult issue: low donor retention.

What is donor retention?

Simply put, donor retention is the percentage of donors who continue to support an organization beyond their first gift. Conversely, donor attrition is the percentage of donors who do not continue their support after their initial contribution. Typically organizations consider these numbers on an annual basis to determine the efficacy of their fundraising strategies.

Why should I care?

According to a study by CauseVox, the average donor retention rate in the nonprofit sector is 45.3%. That means for every ten donors supporting an organization this year, only about four will continue their support next year, and the organization will need to find six new donors to replace the ones who have moved on. And, acquiring new donors is often an expensive investment for charities.

When an organization mails, emails, or calls you, they’re not trying to waste paper, clog up your inbox, or scam you. They’re really saying “Hey, remember us? We’re still doing great work, and we hope you will continue to invest in us for another year,” or, “Hi there, you might not know us yet, but we’re working on a cause that matters to you. Join us in our efforts to make a difference!”

At Charity Navigator, we feel the pinch of a low donor retention rate, which is why we’ve increased the number of our communications over time. We understand that our donors are busy people who support multiple causes, and that sometimes our direct mail campaigns happen at the wrong time of year or our emails get buried, forgotten, or ignored. Our intention is never to offend our donors with too many solicitations, which is why our fundraising team makes every effort to respect donors’ requests for limited mailings and email requests. We appreciate donors who ask us to remove them from our mailing list because they plan to donate every December and do not need a reminder. By doing this, they let us know they’re committed to our organization. 

As a donor, there are a few ways you can stop the barrage of requests. The first is by committing to the organizations you support. Of course, there will always be reasons to make one-time gifts to charities, but you should strive to commit to a handful of organizations you are passionate about and plan to give to them year-after-year. 

The second is by letting the organizations you support know you are committed. The best way to do this? Tell them! Include a note with your next gift, or reach out to their fundraising team to confirm your commitment and ask for fewer communications. You can also opt-out of organizations’ digital communications rather than marking them as spam.

And, the third is by making an extra gift when possible. Have a few extra dollars? Consider making a gift outside of your regular giving schedule to reaffirm your commitment.

Charities will always need to find new donors, but by becoming a more committed supporter you are increasing their donor retention, decreasing their attrition, and helping them become more financially stable. 

You can find our tips for tidying up your philanthropy and taking back control of your mailbox here. These will also help you limit the number of charity requests you receive.

Updated by Amanda Knox, originally published on December 8, 2017 by Ashley Post.

As a 501 (c) (3) organization itself, Charity Navigator depends on public support to help donors make informed choices. Please consider investing in the future of Charity Navigator by making a donation today.   Donate now >> 

1 comment:

Unknown said...

We have given more this year 2020, than we did last year.
Yet we continue to get multiple requests from the same charities.
As an example, in the last two weeks we got for requests for donation from Habitat for Humanity. A charity we like. They send us requests with a stamp already affixed. I'm sending them back with the dollar amount $0.00 and labeled them spam 1 of 6, 2 of 6, 3 of 6,...
Considering how many of these they send out, will anyone at HFH notice?