Donor Retention and Attrition: How effective is your fundraising?

FUNdraising Good Times

Donor Retention and Attrition: How effective is your fundraising?

We know you want to meet your fundraising goals. We also know some readers may be anxious wondering, “how will the calendar year end? Will we be in the red or in the black come December  31st?” While we don’t have a magic wand we do want to suggest two aspects of fundraising management you should keep an eye on.

1. Donor retention. In 2015 the donor retention rate was 46%. This means that 46 percent of those who made a gift in 2014 made a gift in 2015. Using these numbers, if you had 1,000 donors last year, you may end up with 460 this year if you don’t take proactive measures. Related to this, for every 100 new and previously lapsed donors who gave, 96 donors were lost through attrition. You may feel good about acquiring 100 new donors, but if you don’t also look at your donor attrition numbers you may have a false sense of hope.  Are your projections based on 100 percent of last year’s donors renewing their gifts? What are the donor acquisition strategies you have put in place, or can put in place before the end of the year?

The Fundraising Effectiveness Project conducts re-search on fundraising effectiveness and helps nonprofit organizations increase their fundraising results at a faster pace. FEP is a collaboration between the Association of Fundraising Professionals (AFP) and the Center on Non-profits and Philanthropy at the Urban Institute. The project seeks to help nonprofit organizations measure, com-pare, and maximize their annual growth in giving. They encourage nonprofits to measure their “growth in giving.” They define growth in giving as the net of gains minus losses. You can learn more and download tools at http://afpfep.org/.

2. Windfall gifts. Did you have any “windfall” gifts in 2015? If yes, are you planning on those recurring this year? From our perspective, a windfall gift is one which was unanticipated and “fell from the heavens.” This can include bequests, one-time grants, or one-time gifts. For example, if Ms. Sommerville died last year and left you with $25,000, how will you replace that gift in order to break even this year? Or perhaps a social group selected your organization as the recipient of their annual fundraiser. Have you stayed in touch with the group? Do you know if they want to select your organization again this year? In some cases you can cultivate individuals and organizations who make an unexpected or windfall gift, in other cases that isn’t possible. Consider reviewing your 2015 data and pulling out unusually large or unexpected gifts. Form a small committee tasked with assessing whether or not your organization should expect to see these gifts repeated. Committee members can develop cultivation and stewardship activities that target these donors one-on-one as appropriate. Focus on both donor acquisition and retention.

Increasing gifts from current donors, and regaining lapsed donors can increase your fundraising effectiveness. Remember more resources are required to acquire new donors than to retain current or lapsed donors.

Copyright 2016 – Mel and Pearl Shaw

Mel and Pearl Shaw are authors of the new book FUNdraising Good Times Classics Vol. 1 now available on Amazon.com. For help growing your fundraising visit www.saadandshaw.com or call (901) 522-8727.