Rule #4 for Board Members: The Easy Money is in Donor Retention

Board Members Guide to Fundraising

Cash flow is frequently an issue for nonprofit boards.

Everyone wants to see solid, sustainable cash flow. The kind of funding that your organization can count on year after year.

Where does this stream of revenue come from?

From a loyal base of donors who keep giving year after year to support your work.

How can your nonprofit build up that lovely base of loyal donors? Well, here’s the secret:

It’s all about donor retention. Keeping those donors giving.

Did you know that on average, only 1 out of every 2 donors renews their gift? (This has been well-researched and repeatedly confirmed.)

That means – of all your donors last year – you are probably losing about 50% of them this year.

I know it’s hard to believe, but it really is true. Ask your fundraising staff about your donor retention numbers.

This post is an excerpt from my video education series for board members: The Board Member’s Guide to Fundraising: 10 Rules for Success Every Board Member Must Know.

It’s an easy guide for board members who want to understand how fundraising works today, what kind of strategies are most effective, and how they can help. 

You can find out more and register for the Board Member’s Guide to Fundraising here. 

Too many fundraising shops are on the fundraising treadmill.

We work so very hard to obtain NEW donors, and then they abandon us. We lose them as fast as we gain them. Alas, they don’t renew their gifts.

When that happens, your donor base is like a “leaky bucket.” Your donors are fleeing away from you.

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I don’t know of many businesses that could stay in business if they lost 50% of their customers every year.  Do you?

Brand new donors have even worse renewal rates:

On average, only 1 out of every 5 NEW donors renews their gift.

These are the new donors that are the hardest to gain – and only around 20% of them will renew their gift.

So clearly – we have an opportunity, right?

If your organization decided to focus on donor loyalty as a key measure of your fundraising success, what might happen?

What if you all – as a board – decided to embrace your organization’s donor loyalty numbers as a personal goal of the board?

If you increased your nonprofit’s donor renewal rates just a few percentage points, that could mean tens or hundreds of thousands more in revenue.

Donor renewals is the easy money in fundraising today.

Why? Because your current donors are the easiest of all to renew.

They know you. They like you. They’ve already voted with their money that they believe in you.

Keeping these lovely people on board is certainly easier than getting new donors!

How can you improve your donor retention rates?

You want to make their post-gift customer experience simply terrific. You want to make your donors feel so happy that they gave to your organization.

There are lots of easy, inexpensive and even fun ways board members can help. They can:

  • Host parties (donor recognition events) for donors.
  • Make thank you phone calls.
  • Create new and wonderful ways to say thank you to your donors.
  • Send thank you letters that they personally sign.
  • Acknowledge donors all year long.
  • Invite them in to volunteer.
  • Survey them.
  • Ask them for feedback.
  • Do impact reports.
  • Create newsletters.

The list goes on and on. This is the fun part of fundraising.

Bottom line: Board members can creatively thank donors and raise money without “asking.”

This post is an excerpt from my video education series for board members: The Board Member’s Guide to Fundraising: 10 Rules for Success Every Board Member Must Know.

It’s an easy, strategic guide for board members who want to understand how fundraising works today, what kind of strategies are most effective, and how they can help.

Register for the Board Member’s Guide to Fundraising Video Series here. 

Here are the Board Member’s Rules for Fundraising Success posts to date:

Share these with your board members.  Then get them the full video series here. 

Rule #1 for Board Members: Fundraising is Based on Relationships With Donors

Rule #2 for Board Members: Know Your Fundraising Roles and Responsibilities

Rule #3 for Board Members: Fundraising Has a Significant Return on Investment

Rule #4 for Board Members: The Easy Money is in Donor Retention

 

 

 

 

 

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