ACT for Alexandria

Why Thank Donors? The Importance of Donor Retention

When looking at the world of high impact nonprofits there is no exact recipe for success. However, a common ingredient among most organizations is a solid and reliable donor base, without which most nonprofits could not operate on the scale that they do.

Why is a strong donor base so integral to success and financial stability of your nonprofit?

For one, developing a personal, lasting relationship with a donor can, in some cases, help ensure ongoing financial support that can be more sustainable and dependable than government funding (Crutchfield & Grant). As most are aware, government funding can be unpredictable and certainly not a guarantee from year to year. Individual donors with a personal connection to your organization can be just the opposite, more reliable and in fact, financially budding in years to come. Government funding also typically comes with stipulations on how the money can be spent, whereas funding from private citizens can have fewer, if any, strings attached. Of course, 

government funding is a great thing and when coupled with a strong donor base, can create a strong and secure portfolio of funds for your organization.

It is also important to look at the costs associated with raising funds. Finding and acquiring new donors can be an expensive and strenuous process, while communicating with existing donors, in order to encourage repeat donations, is typically much less expensive  (Barber & Levis). Not only is focusing on repeat donors less expensive, but when you fail to retain a donor you are actually losing money. In her book, Donor Centered Fundraising, Penelope Burk stresses that the amount of money you are losing by failing to retain donors, with gifts growing in size in years to come, is incalculable.

The value of a first time donor is simply incomparable to that of a repeat donor. Focusing on a one time donor may provide results in the short term, but cannot be successful or financially responsible forever (Burk). And so, turning your organization’s focus and resources towards ensuring repeat donors, as opposed to marketing to a wider and wider crowd of new donors, is critical to long-term success.

There are also benefits to the community at-large when you focus on repeat donors. According to Barber and Levis, authors of “Donor Retention Matters”, connection with existing supporters is not only a less expensive way of gaining funds, but also a way to keep a consistent and efficient line of communication on the work that the organization is doing. This communication increases community relations and reinforces an organization’s place in the community for the long term (Barber & Levis). A long term community standing means more trust within the community and more donations and support in the long run.

In this series of blog posts, I will explore the many essential ways of thanking donors in order to increase donor support and retention. Outward expressions of gratitude, no matter how small, are vital in developing donors that will not only donate again, but donors that will also advocate for your organization to other prospective donors. Though it may seem challenging at first, focusing on repeat donors is an investment in your organization’s future; it is putting time and effort in now to reap future benefits that, once again, are simply incalculable. 

 

Infographic by bloomerang

*Note: sources are linked to fact boxes and parenthetical citations. 

By Gabby Snedeker, Community Foundation Intern