Raising the Bar on Retention

“Retention Is The New Acquisition” shouts the headline of a recent post in The Agitator, a position that fundraising legend Roger Craver has been rightfully advocating for some time now.

I think many nonprofits are beginning to heed that call. 

Donor notifications have become thank you messages ... Autoresponders are in place to welcome and inform new constituents ... Newsletter have been retooled to focus more on stories about the successes donors help achieve ...

So now what? 

How do you take retention management beyond simply generating a second gift from first-time donors? (Although that is a sizable enough challenge in its own right!)

Over the past few years, as we’ve helped several clients improve their understanding – and management – of donor retention, a few key themes have emerged. 

1) Not all donors are created equal.

It’s important to understand which donors are generating the most revenue (among annual fund donors, not just major gifts).

While it’s sometimes helpful to consider overall averages (average gift size, average retention rates, average annual giving, etc.), a more focused perspective is much more telling. 

When we showed a food bank client that fewer than one-fourth of their donors accounted for well over half of donor revenue, they quickly began to think of ways limited staff resources could be targeted to take even better care of those key constituents. Now, five years later, retention among this valuable segment has grown from a healthy 78% to a robust 85%. Average annual giving is up nearly $65 per donor as well.

Moral of the story: Your best donors warrant your biggest investment.

2) Money isn’t all that matters.

Typically transactions (donations) are only one type of interaction between an organization and its supporters. Other interactions may add – or at least indicate – value as well.

  • For that food bank client, only 13% of company donors also provided volunteers. The companies that did were more likely to give again (88% vs. 50%) and to give significantly more (by a factor of three!)
  • A religious organization has found that constituents who submitted prayer requests are more than twice as likely to make a contribution. 
  • A health care cause knows that donors who also participate in local events are more than twice as likely to give again. 

Simply put, more usually means more. You just have to figure our more of what and by how much.

Moral of the story: Unless you track other types of interactions, you’ll have no idea which ones matter … or how much.

3) Churn isn’t just about ‘coming’ and ‘going.’

Every year some new donors come in and some existing donors go away. And every year some returning donors give more than they did the prior year and some returning donors give less. 

Wile most development directors can readily report how many new dollars came in or how many potential dollars lapsed, few are following current donor activity closely enough to know who is giving more – or less – this year. 

And yet, for retention management, wouldn’t it seem smarter to try to do something about those declining dollars now, while the relationship still exists, rather than in a year or more when the relationship may not be in place?

Moral of the story: If you want to take retention management to a new level, you’ll need to upgrade retention metrics as well!

The bottom lime: you manage what you measure. In our experience, when an organization shifts its metrics to focus on retention, it finds itself shifting priorities as well.

And you can't start too soon!