Donor retention strategies can improve fundraising efforts

In most fundraising strategies, donor acquisition is the primary focus and retention always comes second. This means a significant portion of the money nonprofits spend to promote fundraising efforts is wasted, according to Nonprofit Quarterly.

Donor retention has many benefits, including enabling organizations to spend less on marketing, encouraging existing contributors to make additional gifts and giving nonprofits the opportunity to gain new donors through referrals. Many for-profit companies have realized it is far more expensive to attract new customers than it is to retain existing ones, and this notion is applicable to nonprofits. For fundraising, it can cost nonprofits two to three times more to recruit a benefactor than he or she will donate, NPQ said. If a contributor is engaged with the organization, the relationship can become more profitable over time.

With the high costs of donor acquisition, it's important for nonprofits to consider their retention strategies. Charitable foundations can lose 50 percent of their annual donors between their first and second contributions, the source said.

For event fundraising, this can be particularly important. Encouraging repeat donations can pay off for nonprofits because returning event attendees tend to give a larger amount, according to npENGAGE.

Charities can make a final push for additional fundraising revenue after an event is over by staying in communication with participants. Nonprofits can email individuals to announce fundraising totals and explain how the funds will be used to support the organization. They can also encourage participants to exceed the donation total. After an event, charities have the opportunity to notify donors of upcoming events, which may help boost fundraising revenue. 

If nonprofits spend more time following up with previous contributors, they can increase donor loyalty and secure more gifts for the organizations. Event programs can be more successful with repeat participants.

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