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By Billy Sharma
Nonprofit direct marketing consultant, and author
The most important donation isn’t the first one—it’s all the ones after that.
Donor retention rates are really, really low. It is estimated that on average non-profits tend to lose 8 of 10 first-time donors. Which means that all the time, effort, sweat, hard work and resources you just put into acquiring that one new donor has led to just one gift. That’s a crying shame!
Now imagine if you could just convince that first-time donor to make that crucial second gift, their retention rate would go up to 60%. That’s right. This is why the single most important and simplest way to increase your donor retention rate is to get donors to give a second gift.
Image: Bloomerang.com
Donors make their first gift because they have somehow been convinced that their support is important. If you want them to give again, you need to show them that not only has their first gift made a great impact, but also that their continued support will help your charity to accomplish its goals.
Getting donors to give that critical second gift generally involves two actions on your part:
Acknowledge The Donation
An immediate acknowledgement and thank-you for their gift is critical to getting that second gift. How welcoming, genuine, and thankful you make it is also crucial.
With Sumac, donors get an automatic thank-you email after making a donation on your website, so you don’t even have to think about it.
If the first-time donor has given you their phone number, it is an indication that a call is welcome.
That personal touch by phone can go a long way in generating a second gift and increasing your donor retention rate. However, don’t immediately ask donors for an additional gift—just thank them graciously and sincerely let them know how their donation is being used.
Also try and find out how they heard about your organization. When a first-time donor makes a donation, it’s like a gift out of the blue. Thank them, of course, but also find out what specifically made them give.
Asking them to share a little more about how they learned about your charity and what inspired them to give, helps both you and the donor.
It will help you understand what inspires your donors, and through which communication channels they learn about your charity. It also makes the donors feel good that their opinions and gifts matter, which is key to relationship building with them.
If you can’t call them, send a personalized email at once.
If the gift is substantial, ask your president or one of your board members to call. If nobody answers then leave a voicemail; it is just as valuable.
Send An Update or Progress Report
When a first-time donor sends money because they want to help the dog or cat they saw or read about in your communication, you now need to show them how their gift helped that animal get critical medical care, treatment, or food.
Send them a video showing them the progress the animal they helped has made. Demonstrating the impact of their gift really makes a difference in their continued support of your organization, and your donor retention rate.
If a video won’t work, send them an email describing the progress their animal is making, and follow-up with your annual report. Here’s how to craft a donor-centric one. Bottom line: Donors need to know that their money is not being ignored or wasted.
When to Ask for a Second Gift
It has been established that the best time to ask donors for a second gift is within 90 days of the first donation, when they’re still actively interacting with your organization.
These three months between when you first thanked your new donors, should be used to stay in touch with them via your newsletter or regular email updates.
When someone makes their first gift to your organization, they have demonstrated that they believe in your vision to make a difference in the lives of those you serve.
By asking them to contribute within 90 days, you are telling them that they are more than just donors; they are now stakeholders of your charity, and if you can get them to give that critical second gift, your donor retention rate will increase significantly.
According to Adrian Sargeant, a professor of fundraising at Indiana University’s Center on Philanthropy, even a small improvement in donor retention can yield a windfall over time. Boosting donor retention rates by as little as 10 percent, for example, can increase the lifetime value of a nonprofit’s donor base by up to 200%.
