Fundraising Principles and Practice, 3rd Edition

CHAPTER THIRTEENDONOR RETENTION AND DEVELOPMENT

Objectives

By the end of this chapter, you should be able to:

1. Define loyalty and retention in the context of fundraising.
2. Understand the significance of enhancing donor retention.
3. Describe the drivers of donor loyalty and retention.
4. Develop a retention strategy for various categories of supporter.
5. Employ key metrics to inform and measure the success of a retention strategy.

Introduction

Building donor retention is the single biggest challenge facing our sector today. Nonprofits both large and small continue to lose their donors at an astonishing rate, and the situation appears to worsen each year (Sargeant, 2016). Low levels of retention matter for a variety of reasons. First and most obvious is that fewer donors equates to fewer donations, but there are many others:

1. Acquisition costs through direct forms of fundraising are high (Maltby et al., 1991). It typically costs nonprofits two to three times as much to recruit a donor than they will give in their first donation (Gaffney, 1996). As we highlighted earlier, most nonprofits lose money on the recruitment of donors through traditional direct response media, such as direct mail. If an organization is able to improve loyalty, it loses fewer donors and doesn't have to spend what are often very significant sums to replace them.
2. Opportunities for “cross” and “up-selling” are lost ...