Fighting the Donor Dip

Fighting the Donor Dip

Donor acquisition and retention are major areas of focus for nonprofit organizations. After all, without donor support, it is impossible for nonprofits to accomplish their missions. However, troubling new data regarding the state of giving in 2022 shows that many nonprofits are struggling to retain donors.

In 2020, despite initial fears of giving shortfalls resulting from the coronavirus pandemic, the opposite turned out to be true. Charitable giving in the United States reached record levels, rising to $471.44 billion, according to the 2021 annual report released by Giving USA. While giving rose again in 2021, climbing 2.7%, the overall number of donors declined by 5.7%, per a report issued by the Fundraising Effectiveness Project (FEP).

The FEP’s latest report, which covers the first quarter of 2022, showed both a 5.6% decrease in donors and a 6.2% drop off in donor retention, as compared to the same time period in 2021. 

Clearly, it is time for nonprofit organizations to circle the wagons and refocus their strategies on improving donor retention before it is too late. 

Donor Retention Strategies

Turning your organization’s donors into repeat supporters does not happen by accident—you need to be strategic. The two cornerstones of a strong donor retention strategy sound simple: strengthen relationships and maintain communication. However, consistently and successfully doing these things is no small task. 

Here are three strategies to consider as you seek to increase your organization’s donor retention rates:

  1. Always Thank Your Donors

Regardless of the size of a donation, saying thanks is a must. Do your best to avoid sounding generic. Instead, cite specific information about your donor and/or their donation(s) when you reach out to them. Here’s an example:

Hi Rachel,

Thanks in part to your generous donation, we surpassed our goal of raising $15,000 for #GivingTuesday! We are truly thankful for your support. 

The money that you donated will go towards supporting our mission of providing key aid to non-native members of the Greentown community and surrounding areas. Thanks to you and your fellow donors, we now offer three weekly sessions of ESL classes that meet year-round!

We are thrilled that you have been a consistent supporter of our mission since 2019. On behalf of the entire team at Literacy Greentown and our 1,859 program participants, thank you for your ongoing support!

With gratitude,

Rebekah Baker

CEO of Literacy Greentown

In addition to personalizing your thank you communication, whenever possible, use a physical rather than digital medium. In today’s world, so much operates digitally. As such, receiving a handwritten thank you note in the mail feels much more meaningful.

  1. Develop Effective Email Marketing Techniques

Email marketing is the go-to method for staying in good communication with your donors. It allows you to reach a wide audience efficiently and effectively. 

With email marketing, you can create marketing campaigns that take place automatically. You simply need to create email series specific to certain categories of donors you want to reach—for example, “repeat donor.” Once you classify a donor into that category, automation takes over, and they receive your series of communications in the manner in which you want them to. 

Additionally, using email marketing allows you to get important messages out to a wide audience quickly. Did a major event occur that impacts your organization? You can quickly craft a message to be sent out to all your donors or to just a segment of them. 

  1. Solicit Feedback from Your Donors

Surveying your donors can provide your organization with a wealth of important and helpful information. That information, in turn, can shape your strategies moving forward. Consider reaching out to your repeat donors to discover why they decided to support your organization in the first place and why they continue to do so. Or send a survey to your lapsed donors to glean information about how and why their interest in supporting you has waned. Thirdly, you could consider asking donors about the donation process itself: What was easy? What was difficult? What changes would they recommend? 

In light of the donor dip that most nonprofits are experiencing in 2022, it is more important than ever to employ proactive strategies to pursue and encourage your organization’s supporters. Even if your organization has not felt the impact of the dip yet, that does not mean that you will escape the year unscathed. 

Sarah Gentry, CPA, has over 19 years of accounting industry experience. A detailed and technical accountant, Sarah works hard to ensure her clients receive the best service possible.

Areas of service include: Non-Profit/Government, including Yellowbook and Single Audits; Employee Benefit Plans; Healthcare; Construction; Wholesale; Banking.