A nonprofit’s ability to advance relationships with donors, volunteers and members directly affects the organization’s prosperity and achievements. Your donor retention ratio defines the viability of your fundraising efforts. Nonprofits use Fundraising and Donor Management software to manage relationships with donors and devise personalized strategies for donor retention to further this goal. Continuing reading for side-by-side comparisons to select the best Fundraising Management Software for your organization.
Why Donor Retention is Important
Obtaining a new donor is very costly in terms of money, time and effort. The cost of acquiring new donors can be 50-100% more than the dollars given by them. Retaining a first-time donor is much less costly than finding a new donor. Big gifts are more likely to come from recurring donors. In fact, most major gifts are made after five years of an individual giving to an organization. A small change in retention rates equals a large gain in income, both in basic fundraising and in potential future big gifts because 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.
Donor Retention Plans
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 can retain this donor.
Dr. Adrian Sargeant, a researcher in donor retention and donor loyalty, states: “improving donor retention by just 10% can double the lifetime value of your donor database!”
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-term donors, especially those who move up the giving ladder over time, tend to participate in capital campaigns and contribute above-average gifts, and recruit new donors at a faster pace.
Selecting Tools for Donor Retention
Since fundraising and donor management software is used to devise personalized strategies for donor retention, which is so critical to fundraising, selecting the best functionality at a price compatible with your organization’s budget is very important. There are tools to help the selection process.
Nonprofit- Business-Software.com is offering a free copy of the “Top 10 Fundraising & Donor Management Software Report”. Get side-by-side comparisons and reviews of the best nonprofit software available for your company. Click here for the free offer.
Software as a service (SaaS) allows users to connect to and use cloud-based apps over the Internet. Common examples are email, calendaring, and office tools (such as Microsoft Office 365). SaaS provides a complete software solution that you purchase on a pay-as-you-go basis from a cloud service provider.
G2.com offers a list of Top Free Donor Management Software. Products featured on this list are the ones that offer a free trial version. As with most free versions, there are limitations, typically time or features. G2 takes pride in showing unbiased reviews on user satisfaction in our ratings and reports. We do not allow paid placements in any of our ratings, rankings, or reports. Learn about our scoring methodologies.
If you’d like to see more products rated by G2.com and to evaluate additional feature options, compare all Donor Management Software to ensure you get the right product.
Learn more about fundraising by attending the Sunshine Certificate in Nonprofit Management class on Campaigning to Potential-Part I (Sponsorship and Fundraising). Click here for the yearly schedule to find the next class.
Sources: Candid blog. Candid has been a preferred partner since 2018 when Florida Nonprofits became an outlet for the Foundation Center Funding Network.
Business-software.com Expert guidance to choosing software from a leader in business software research for over a decade.
www.g2.com Showing unbiased reviews on user satisfaction.
Florida Nonprofits’ Wz New? newsletter a service of Florida Association of Nonprofits, offering information nonprofits need to know.
Author: Lynne Balthazor, Florida Association of Nonprofits