Everyone reading this article will have heard the message numerous times from numerous people: “Invest in keeping your donors! It’s far easier than finding new ones!”

And yet, over the last year, we’ve witnessed cut backs in donor stewardship initiatives and staff; long-term security slashed for short-term gain. Also, a crisis in the availability of knowledgeable data and donor relations staff is taking a serious toll.

You’ll also have heard “It’s more important now than ever!” Well, short answer … it is. So, here is a recap on the WHY’s and HOW’s of donor retention. Some have been talked about many times. Some have remained mysteriously unsaid.

The WHY is easy

It’s always been cheaper and better to keep a customer or donor than to acquire a new one. That’s true in every sector, not just fundraising. A few more "whys" have crept in, though.

First, we’ve been living through tumultuous economic times. “Unprecedented times” haven’t really stopped—except for perhaps a few brief breathers—since March 2020 and they certainly don’t appear to be stopping anytime soon. As we know, most charities (who continued fundraising) experienced a “pandemic bump,” achieving some of their greatest fundraising successes in 2020-22, from their individual donor programs. (Events and corporate giving certainly took a hit.) And then, many felt a downturn in 2023.

Fortunately, most of the amazing organizations we work with noticed that 2023 ended strong, with record-breaking end-of-year results making up for earlier in the year. But, prospecting for new donors suffered in 2023. It became more expensive to recruit new donors, and numbers were lower. This means it’s even more important to hang on to those who did give.

Then along came 2024. Higher interest rates, global and political uncertainty … all topped off with a damaging Canadian postal strike at the worst possible time of year. The impact on the charitable sector from this strike is still being calculated, but it was immense. (As an aside, there’s a good lesson in donor stewardship when we look at the strike’s impact: those charities who invested in donor retention, channel integration and relationship-building saw much less harm to their income. Their donors managed to find a way to donate—many going online for the first time, and some holding onto their donations until the strike was over.) At the same time, traditional sources of new donors have been drying up, the cost to recruit a new donor has risen substantially, and changes may make digital lead generation tougher as we go forward.

Here’s something that boards and senior management teams don’t always realize: when we lose donors, we’re not just losing their annual donation. We’re losing their potential income—conversion to monthly support that’s almost always worth over $200 a year or $2,000+ in long-term value. Also lost is upgrades to mid-level and leadership programs and of course, my favourite—legacies.

The simple list of HOWs for donor retention

1. Thank donors. Thank them again. Show them why the world’s a better place because they gave. Encourage them to give again. (Hint: Don’t dispense with your printed donor newsletter. Think of ways to keep key donors as close to the work as possible.) Pretend that every donor is your grandmother. Would you REALLY be foolish enough to ask her for something else before properly appreciating her first gift? Here’s the thing: nobody has to give to your organization. They give because they care, but they likely care about a lot of things. If we don’t show them that their generosity and their gift has made real change, why would they prioritize giving to our causes rather than to something else they hold dear? 
2. Get as many folks as possible onto monthly giving. There is so much wisdom out there about this, but put simply, offer monthly giving every chance you get, in each channel. Use a combination of mail, digital and phone approaches to new donors, loyal donors and even lapsed donors. Test amounts and offers. Create “challenges.” Consider testing face-to-face. Offer downgrades or “holidays” if people feel they need a break. Hire trained canvassers to work events. Feature monthly donors in newsletters. Include in every P.S., in appeals as well as thank-you letters. The list goes on.
3. Ask in more than one channel and make it easy to give in more than one channel. Multi-channel donors are more valuable than single-channel donors and the reiteration of an ask in more than one channel bumps up results in the others.
4. Be emotional and tell inspiring stories. Make the collection of stories somebody’s job. People may decide how much to give with their heads, but they make the decision to give with their hearts. Reach those hearts. 
5. Take the time to find out why donors give – and especially why they’ve stopped.
6. Get personal … think volunteer thank-a-thons, or tasking staff with making a certain number of thank you calls a day. An added benefit is getting comfortable “talking” again … after years where emailing, texting and messaging took over.
7. Did I mention … thank them and show them why they matter?

The controversial stuff

The charity sector adopted “database marketing” or “donor-base marketing” many decades ago. This approach is based on two things: good data and a commitment to building relationships with donors. Are we really doing as well as we could be?

Working with 20-30 organizations a year over 20 years, I get a front-row seat to the world of data and I can report that it doesn’t always feel like it’s going better than it did 20 years ago. But why? We have fancy, expensive databases in place. Why are there still so many errors in data entry?

And why does our multi-year, multi-channel “Mystery Shopper” program show that thanking and stewardship seem to be falling behind, too? (With some wonderful, heart-warming exceptions, of course.)

Here’s one guess: we don’t do well at things we don’t value and I don’t think data is understood or valued enough at charities—at least not by the people setting the priorities and holding the purse strings.

We have great databases, but a shocking lack of experienced data staff

One person is often responsible for data at their organization. I know of nonprofits who have a single data manager and 30,000 donors! It's impossible for that person to keep the donor base clean, healthy and up-to-date and provide all the reports and analysis that important decisions are based on.

Here’s a thought: given that data is the foundation of all fundraising success, take a look at what your charity pays these wizards. Is it less than your other fundraisers earn? Is it less than your finance department? Because I’d argue—if we actually paid based on value—we’d probably pay them the most. 

Every fundraiser relies on good data to raise money. And at many charities, it’s an unholy mess. In another scenario, it may be great now – but is it entirely dependent on one or two people? What if they win the lottery and quit to travel the world? We need to hire sufficient staff in our data departments. We also need to train them on fundraising and the ways that their job underpins everybody else’s. We need to value them enough to attract them from other sectors, and to keep them.

On the stewardship front

Even as our donor bases get bigger, we never staff up accordingly. I think back to when I worked at a charity who had about 500 donors. We knew many of those people personally and would write messages on their thank-you letters. When that charity’s donor base grew to 1,000, I don’t think they doubled their donor relations staff. What about when it grew to 5,000? 10,000? 20,000? Last I heard, they still only had 2-3 people building relationships with all those donors. 

Now, the promise of database-marketing was that we could talk “almost one-to-one” with thousands of people. And that is (almost) true for appeals. (Please add extra tailoring for your monthlies, mid-levels, legacy donors and “super loyals.”) But what about the other part of the equation—keeping in touch with donors and valuing them when we’re NOT asking for money. Relationship-building takes a more personal touch. Which means more people.  

There are great resources around to help you make a financial argument to your board, management team or purse-string-holders. I’m thinking of audits that show second gift rates, retention rates and long-term value. The first person I’d speak to about this, is Sam Laprade at Gryphon Fundraising. I’m also thinking about modelling that shows how a 10% boost in year one retention can mean at least a 50% increase in long-term value. 

But I’m also thinking that I’m nearing grandmother-age myself … and I’m sure that I won’t be giving second gifts to those who haven’t said thank you for the first one.

It’s been a long winter and it’s not over yet. So, to end on a happy note, just imagine how great this year could be by making some fundamental changes to value our data folks and our amazing donor-facing staff—truly the “hidden gold” of our organizations, and all our endeavours. 

Lynne Boardman has spent 25 years creating successful individual giving programs for charities in both Canada and the UK. Her work has spanned health care, international development, human rights, education and environmental causes. Co-founder of the podcast, Raise and Shine, Lynne is the Managing Director of HMA, and speaks, strategizes and writes about legacy fundraising whenever there is someone nearby to listen. lynne@harveymckinnon.com.