Ask any nonprofit development professional, “What is your single most important metric?”

“Well of course,” comes the answer, “it is how much money we raised.” Be prepared for the “Duh!” that may follow.

Good start. What is the second most important metric? This may elicit a few different responses, but among them will be either, “How was our donor growth?” or “How was our donor retention?”

Retention rates reported by nonprofits generally fall between 40%-45%, as captured by numerous studies. Our own research over an admittedly smaller group of nonprofits has found that within a group of donors who made a gift last year and did not renew this year, half of that group will fall off during the subsequent year.

Running those numbers, you can see that a retention rate of 40%-45% translates to a loss of 55%-60% of donors each year. If those lost donors go one more year without offering a gift, roughly half of them will fall off. Maybe forever. Meaning that only a bit north of 20% of donors from two years prior are still contributing.

Blackbaud reports that while only 29% of first-time donors give during the following year, that number increases to 60% among donors who have given multiple years in a row.

It is well known that over the last several years the amount of dollars donated to nonprofits has grown, while the number of individual donors has dropped. Retention is more important than ever.

Many nonprofit fiscal years will conclude in June. This would be a great time to huddle up with your team and strategize about how to increase the retention rate by year-end. For the rest of the year, perhaps more budget should be directed toward retaining lybunts and less toward acquiring new donors.

Maybe donors whose last gift was in FY21, should receive different messaging for the rest of this year. Make your case again, create a win-back message, let them know how important they are. If you lose them this year, they may be gone for good.