It’s hard to grow a nonprofit when you’re losing more donors than you’re gaining. This is the idea behind donor churn. And while donation churn matters just as much as donor churn, the fact is that losing donors now reduces your pool from which to find future major donors and planned giving donors. Keeping more donors – at all giving levels – puts you in a stronger position for long-term stability.
So how can you reduce donor churn?
Let’s explore this issue in detail.
What Is Donor Churn?
Donor churn is a fundraising metric that combines two other metrics – lapsed donors and donor acquisition. Gain more donors than you lose, and your donor churn is positive. Lose more donors than you gain, and it’s negative. An accurate donor churn calculation also includes reactivated donors – previous donors who lapsed and then resumed giving.
A positive donor churn indicates a more stable foundation for long-term growth.
Three Ways to Affect Donor Churn
Because of what the donor churn fundraising metric entails, here are the three ways you can cause your data to change:
- Gain more new donors
- Retain more existing donors
- Reactivate more lapsed donors
Gaining new donors is more difficult – and more costly – than retaining and reactivating. So if you want to shift your donor churn toward the positive direction, the fastest way to do it is to focus on donor retention and donor reactivation.
We’ll discuss some strategies for this a bit later.
How Serious a Problem Is Donor Churn at Your Nonprofit?
While every organization can shift their donor churn more in the positive direction, you need to examine your own data to know if this is a problem, and how serious it is. This matters because if you have a reasonably positive donor churn, you might want to focus your efforts on more pressing fundraising challenges.
For example, your donation churn might be a bigger issue than your donor churn. Donation churn is the same concept, but refers to donation amounts rather than the number of donors. You could have more donors now than five years ago but still be generating less revenue if you’re losing too many major donors. Which donors you’re keeping matters more than just how many.
In that scenario, donor churn is a secondary issue. Your primary one would be retaining more major donors.
Compare Your Data to Industry Averages
The first way to assess the seriousness of the problem is to study the Fundraising Report Card’s industry data. Uploading your fundraising data to the report card is easy – it only takes a few minutes if you have an organized database, and it’s free. All you need is three data points – donor IDs, donation dates, and donation amounts.
If you find you’re retaining 35% of your donors, that’s on par with industry averages. So while you should always want to retain more donors, that’s not a crisis. If you’re only retaining something like 20%, you have a much more serious churn problem.
Hyper-Focus Your Retention Data
The broader donor retention metric might be masking bigger issues underneath. With the Fundraising Report Card, you can break your data down into three more focused categories:
- First-time donor retention
- Reactivated donor retention
- Repeat donor retention
Typically, as you can see in the industry data, first-time donor retention tends to be the lowest of these three, and repeat donor retention is the highest. This makes sense, because once someone starts giving regularly, they are more likely to keep doing so.
If that’s your situation, compare your data for these three metrics to the industry averages. If one of them is quite a bit lower than normal, consider focusing on that one more than the other two. This might mean devoting extra attention to first-time donors or to reactivated donors, for example.
Try to Determine the Cause of Lapsed Donors
Why aren’t more donors continuing to give? This is the next question to ask when looking to shift your donor churn data in the positive direction.
Are they having personal finance issues and just can’t give? Has your nonprofit failed to communicate effectively? Do they have low motivation to commit to giving repeatedly?
This last question is a big one. Lots of people give once, never intending to follow it up with repeated donations.
The only way to find out why donors aren’t continuing to give is to ask them.
Strategies to Retain More Donors
Now let’s run through some ways to increase donor retention. You can apply all of these to the more focused retention metrics discussed earlier.
Increase gratitude
You see this mentioned all the time, and for good reason. Too many nonprofits still fail at it! Almost every person probably has a story about giving to an organization and then hearing nothing back. Sometimes they don’t even get an automated giving receipt for tax purposes.
If your first-time donor retention metrics are in the gutter, this is the first thing to check.
How soon are you thanking them, and using which media?
For first-time donors especially, sincere, personal thank you notes are far more effective than automated generic emails. Videos work great for this. You should also send giving receipts. But thank you emails, mailed thank you notes, and even phone calls will have a greater impact on the donor because they will feel appreciated, noticed, and important. Their gift mattered.
Increase personalization
Personalization can be relatively simple on one level, but also an endless pursuit of complexity. It all depends on the capabilities of your donor CRM platform.
Ideally, you have the capability of sending surveys after a donor has given, and you are able to use their responses to personalize your follow-up approach.
For instance, suppose your survey includes a question asking what motivated the donor to give. One donor says they gave because a friend was having a birthday party and asked people to give to your nonprofit instead of giving them a present. And another donor says they gave because they care about your cause.
Your follow-up for these two donors should be vastly different. The first donor is fairly unlikely to give again. Anything’s possible, but their heart isn’t invested in your cause, at least not yet. But the second donor is a top candidate for repeat giving.
Besides motivation for giving, you can also personalize follow-up based on other factors:
- Age
- Stage of life
- Donation amount
- Previous gifts – number and amount
- Event attendance
- Volunteer history
- Location
A few comments about these:
Local donors can be invited to in-person events and volunteer opportunities more easily than donors who live far away, for example.
How you speak to someone who gives $5000 should be different than someone who gives $20. How you talk to an 80-year-old widow should be different from a 30-year-old who just got married – especially on an ongoing basis.
Increase meaningful touchpoints
Donors are busy. Many don’t give again because they simply forget about you. Many nonprofits need to communicate more often simply to remain relevant to their donors.
But you want to make these touchpoints meaningful. Your communications should not all be asking for money. Send a variety of communications, and work hard to make them relevant to donors. Show impact. Demonstrate outcomes. Share videos and reports of the effect their gift is having on people affected by your mission. Give opportunities to get involved other than just giving. Every so often, just have fun. Lighten the mood and make your supporters smile or laugh.
Deliver more value
Meaningful touchpoints means giving value to your donors – sharing things that matter to them, not to you. Did you just bring on a new board member? Great. Do your donors care about that? Probably not! If you have a newsletter that touches on multiple topics, you might choose to add that as a bullet point near the end, but the inner-workings of your organization doesn’t matter to most donors.
With effective and personalized surveys such as what MarketSmart’s automated fundraising engagement software provides, you may find that some donors do care about those sorts of things. And for those donors, you very much want to talk about them.
So, value is directly intertwined with personalization.
One donor might want written reports and updates. Another wants photos and videos. Another wants to be asked for advice and input. Another might not want anything – just sign me up for monthly giving and leave me alone.
The best donor communication delivers what each donor considers important, relevant, and valuable. The MarketSmart platform in particular is able to deliver this type of communication without overburdening your team – a common challenge of high-level personalization.
Stand for what you believe in
Another way to increase donor retention is to increase passion for your cause. Passion generally results from taking bold, unashamed positions on matters of importance related to your mission.
Don’t hold back from doing this if you have a clear message and mission.
Inspiring fanatical loyalty from 500 donors is better than having 5000 wishy-washy, uncommitted donors who lapse at 90% and have to be reactivated or replaced every year. When donors know what you stand for, it makes it easier for them to commit to your mission.
In other words, you can’t please everyone, so don’t waste resources or effort trying. Instead, define who you are and what your organization stands for, and be outspoken about it.
Eliminate donation roadblocks
Sometimes donor retention comes down to simple technology failures.
How easy is it to give through your website or through social media? Does it take ten clicks when three will do? Do they have to join anything just to make a gift? Are you asking for too much information in your giving form? Does the form even work? Can they find it easily?
It’s pretty amazing how such simple aspects of donating can be so cumbersome. Make sure your technology and giving processes are easy to use and don’t get in the way of donor intentions.
Strategies to Increase Donor Reactivations
Increasing donor retention is one way to improve donor churn. The other one that requires less time and financial investment is donor reactivation.
The good news is, most of the strategies for donor retention also help with reactivation. You just have to adjust the language a little to fit the situation.
For a donor who hasn’t given in more than a year, you can’t thank them for their recent gift. It wasn’t recent. But you can thank them for their past support. You can name the amount given, the donation dates, and other personal details if you have them.
You can also use surveys to find out why they stopped giving, and personalize your outreach in accordance with their response – if any.
Also, be aware that your definition of ‘lapsed donor’ might not fit the donor’s perspective. If they last gave 15 months ago, in their mind they might still consider themselves a supporter. Finding out you expect them to give more often might put them off. So you have to approach situations like this tactfully.
Again, surveys can provide powerful insights into what a donor is thinking before you approach them with a bunch of assumptions and expectations.
For lapsed donors especially, discovering their situation and reason for lapsing is probably the most important step you can take.
What about New Donor Acquisition?
You can also improve donor churn by acquiring more donors. While this tends to be more expensive and difficult, it’s also necessary.
Even though this article isn’t focusing on this aspect of donor churn, there is one thing that needs to be said:
When you acquire new donors, make sure you learn as much as you can at the outset. Get their contact information. Ask for permission to reach out, and try to get them to tell you how much communication they’re comfortable receiving. Then, honor their request.
A first gift isn’t as important as the relationship potential it represents. Approach all new donors as potential new relationships, and communicate accordingly.
See Your Nonprofit’s Donor Churn Data
In just minutes, you can see how your donor churn compares to industry averages.
Upload your fundraising data to the Fundraising Report Card, and see your data for
- Donor retention
- Donor reactivation
- Lapsed donors
- New donors
- Donor churn
- Donation churn
- And so many more metrics!
It’s free, and you’ll instantly have access to data that can inform and improve your fundraising strategy and effectiveness.
