There is an old saying in fund raising: It costs less to keep a current donor than to find a new one. In today’s world, donor retention is the backbone of an annual campaign.
According to Rebecca Koenig, for every $100 in new donations nonprofits gained in fiscal year 2014 over the previous year, they lost $95 in lapsed or reduced donations. This was according to a new survey by the Center on Nonprofits and Philanthropy at the Urban Institute.
While that 5-percent net gain in gifts is “disappointing,” said Nathan Dietz, senior research associate at the Center, the news regarding donors themselves is even worse. For every 100 new donors gained in 2014, participating nonprofits lost 103.
The study also reveals a large amount of “churn in the donor universe,” Mr. Dietz said. “It’s hard to predict for any individual donor in general whether they’re going to be still on the rolls next year, donating money next year.”
Bottom line – these poor donation / donor-retention rates matter. It costs less to keep a current donor than to find a new one. Therefore, reducing these losses is the cheapest way to increase fundraising gains. Remember – it’s all about donor retention.
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