Your fundraising will be more effective if you understand the statistics behind fundraising. Although each mission and each nonprofit is different, statistically:¶
- Obtaining a new donor is very costly in money, time and effort.¶
- Retaining a first-time donor takes less of all three than finding a new donor.¶
- First-time donors are twelve times (1200%) more likely to become loyal recurring donors when they receive a sincere thank-you not only assuring that their gift was received but that it is appreciated and is being used to accomplish the mission.¶
- Big gifts more likely to come from recurring donors. In fact, most major gifts are made after five years of an individual giving to an organization.¶
- If your organization does not retain a first-time donor, the chances that donor will later give a big gift to your organization are essentially nil.¶
A corollary to these facts is that a small change in retention rates equals a large gain in overall giving.¶
Obtaining a New Donor¶
According to Nonprofit Quarterly, research estimates that it costs ten times more to acquire a new donor than it does to keep a current one. Also, the cost of acquiring new donors can be 50-100% more than the dollars given by them. It is often several years before nonprofits break even on dollars raised versus dollars spent on donor outreach.
Donor Retention¶
Retaining a donor is much less costly (and more fun) than securing a new one.
The donor retention rate for first-time donors giving under $100 is only 21% according to the Fundraising Effectiveness Project (FEP), a collaborative effort between the Association of Fundraising Professionals and the Urban Institute. However, if you can get the second gift, the retention rate jumps to 64%. In other words, any donor who gives a second gift is three times as likely to continue giving to your organization.¶
First-time donors who get a personal thank you within 48 hours are four times more likely to give again reported Tom Ahern on the GuideStar blog. Combining these two facts indicates that an immediate personal thanks would make it 12 times more likely that your organization will retain this donor.¶
Dr. Adrian Sargeant, a researcher in donor retention and donor loyalty and chief scientist at Bloomerang, states: “improving donor retention by just 10% can double the lifetime value of your donor database!” According to the latest FEP data, the average donor retention rate is 41%. Using a sample set of 5,000 donors with an average donation of $200, increasing that rate by just 10% means an additional $456,349 over the next 10 years.¶
When donor retention rates are higher, less effort and fewer marketing dollars are spent in donor acquisition, and greater focus can be placed on upgrading existing donors, securing legacy gifts and recruiting new volunteers. ¶
Long-time, loyal donors tend to participate in capital campaigns and contribute above-average gifts. They also tend to recruit new donors at a faster pace, especially those who move up the giving ladder over time. In fact, most major gifts are made after five years of an individual giving to an organization.¶
First-time donors are ardent, but that ardor cools fast if you don’t sustain it, keeping them excited by your mission, your vision, and your potential in their lives. At the very least, a super-quick thanks gets your organization past any buyer’s remorse.¶
In 2017, Leah Eustace at Good Works reported: “A one-minute thank-you call to new donors increased conversion by over 30%.” That same year, the Agitator offered fresh data from America’s public radio stations: “In its first year, the ‘thank-you call’ program generated 56% increase in first-year donor retention, 72% increase in first-year retention revenue.”¶
Despite these facts, few organizations prioritize a new-donor thank-you program, even with the heavy expense of acquiring these first-time supporters. Make your organization’s fundraising more cost effective with a stellar first-time donor retention plan.
Sources: Bloomerang blog
Double the Donation Learning Center
Guidestar blog
Network for Good
Nonprofit Quarterly