Donor Retention = Financial Sustainability

In a report conducted by the Association of Fundraising Professionals and The Center on Nonprofits and Philanthropy at the Urban Institute, their project entitled the Fundraising Effectiveness Project (FEP), has solidified some ideas that we have suspected all along: it’s the long term donors that keep the non-profit organization financially stable.

Dr. B.J. Bischoff reflects on the findings of this project in the Sonoma Valley Sun. Involving 2,377 non-profits and five years of monitoring donor giving, the FEP’s goal in this study is to “help nonprofits measure, compare, and maximize their annual growth in charitable giving. Specifically, the FEP measures the percentage of new and lapsed donors and the size of donor contributions from year to year.”

Here is the bottom line: “The 2011 FEP report showed that nonprofits have a donor retention rate of only 43.1 percent, meaning that 56.9 percent of their 2009 donors did not give in 2010. The cumulative study results over the past five years reveal that nonprofits (1) lose over 50 percent of their donors between the first and second donation; (2) lose 30 percent of those donors year after year thereafter; and (3) lose 30 percent of regular or sustainer givers from one year to the next. So, merely looking at the overall net income, and not calculating the difference between net gains and losses of donors and dollars from year to year does not give the management and boards of nonprofits the real picture of what’s happening in their fundraising efforts,” reports Bischoff.

So what is the best way to garner donor retention? Jodi Anderson, the incoming president of the Wine Country Chapter of the Association of Fundraising Professions and an experienced fund development professional with Hanna Boys Center has some great advice. Based on her record of keeping 70 – 75% of her donors over a two year period, she suggests that, “donor retention is achieved by making sure that donors feel respected and valued by the organization. This can be accomplished through a number of mediums, including (1) prompt and personal acknowledgments (not generic); (2) periodic updates regarding achievements and successes of both the organization and the service population; (3) focused appeals related to a specific need, coupled with motivational information about how their gift will make a difference; (4) invitations to events; (5) phone calls; and (6) special hand written notes.”

The key to non-profit fundraising is communication, relationships and a shared passion for your cause. An important element to nurturing these donor partnerships is through social media. With a great website, updates on Facebook and Twitter and even through e-newsletters, your donors can continue to stay in touch and in contact with your organization. Contact Fundly today to get the most out of your online donor fundraising.

Sourced info below:

http://nonprofitmatters.sonomaportal.com/2012/01/05/donor-retention-key-to-nonprofit%E2%80%99s-financial-sustainability/