Donor Retention: Step-by-Step Guide to Retain More Support
Chris Paver – 18 August 2021
If you knew in advance which of your recurring donors were going to churn out of your program in the next three months, what would you do about it?
You’d engage them with outreach and exciting opportunities so that you could retain their support!
Nonprofits today understand that donor retention is critically important. By retaining your donors, you can deepen your relationships with them and open up more opportunities to grow their gifts over time. Plus, it’s much more cost-effective to retain your recurring donors than constantly acquire new ones. Strong donor retention means more efficient fundraising and more support to drive your mission forward.
To see the best possible results, your organization should aim to proactively boost donor retention (rather than just react to churn after the fact). But how? At Dataro, we recommend our three-step donor retention strategy. Here’s how it works:
How to Improve Your Donor Retention Rate
Step 1: Predict
Start boosting donor retention by proactively predicting churn.
A donor churns or lapses out of your giving program when they stop giving. Churn must be avoided and actively combated in order to drive healthy donor retention.
How do you predict churn?
Historically, predicting churn has been a major challenge for nonprofits. The traditional approach requires a mix of complex segmentation strategies, close analysis of data, personal follow-up with lapsed donors to learn why they left, and more. It’s not very effective, and it only gives you broad assumptions about the types of donors who’ll be likely to churn rather than specific individuals who need re-engaging.
Think of it this way:
Here you have a large group of donors and want to identify at-risk individuals so that you can re-engage them and retain their support. Traditionally, you’d start by broadly segmenting your donors by characteristics like member of your giving program and missed or canceled their last scheduled donation. This would yield you a general group of potentially at-risk donors:
From here, you could develop a list to call those donors potentially at risk of churning. But how accurate is this segment? How can you be sure you’re not missing any at-risk donors or wasting time and resources on this broad segment?
In this example, you’ve missed at-risk donors (in green) who you should contact. These individuals were excluded from your segment because of other markers in their data. Maybe their most recent scheduled gift came in on time, but they also haven’t clicked on your emails or joined an event in over a year, meaning they’re likely disengaged from your mission.
Your broad segment also includes donors (in orange) who shouldn’t be contacted or who should be contacted for other reasons. Maybe these donors just need to update their payment information but want to stay active in your program. Others might have already requested to be removed from your program but were mistakenly included here during the segmentation process.
Machine learning technology today offers a more direct solution. AI can predict and rank the individual regular donors who are most likely to churn out of your program:
The donors flagged with green bubbles have been identified as having a high churn risk, as their predictive scores (i.e. their probability of churning) are high. This quick identification process makes it easy to find at-risk donors, generate accurate contact lists, and get started re-engaging them in just minutes. AI takes all the guesswork out of Step 1, meaning you can boost retention in a sustainable, scalable way (that won’t eat up all your time and resources).
Step 2: Engage
Next, engage the individual donors who you’ve predicted are likely to churn out of your giving program. You can engage at-risk donors with a variety of outreach methods. However, we’ve found in multiple experiments that a calling program to express your gratitude for their ongoing support is the most effective method to retain at-risk donors. This can then be supplanted with additional strategies, like event invitations, text messages, and other engagement options.
Just do not ask an at-risk donor to make another gift. The priority at this stage is simply to save your relationship by putting your mission back on their mind. Asking for continued donations can come later! The focus of the call is therefore on saying thank you, not asking for money.
In terms of scripting, here’s a general outline that has worked well:
Donor Retention Call Script
- Start with a simple thank you, making it clear that you’re not calling to ask for a donation.
- Acknowledge the donor’s previous gifts and tenure with your organization.
- Reinforce your mission, the donor’s connection to your cause, and why their gift matters.
- Give them the opportunity to provide feedback for your team.
- Share some of your organization’s recent wins and upcoming needs.
- Sign off with another thank you—not a financial ask.
This approach to donor retention is simple and direct. Rather than trying to prevent churn in a roundabout way through studying it retroactively, you can instead focus on proactively connecting with those most likely to churn.
As you move through Steps 1 and 2, try to develop a concrete “Engage and Retain” cadence for your team to follow. We recommend a monthly calling program for organizations with enough recurring donors. For smaller programs, a quarterly program also works. Then, put it into action!
Step 3: Measure and Repeat
Finally, measure your retention strategy’s performance over time. Actively track your donor retention rate and other analytics that relate to retention, like average tenure or lifetime value of recurring donors. Look for improvements, refine your approach, and keep iterating!
By shifting your approach from passive reaction to proactive engagement, you’ve already taken a major step towards retaining more support and growing your nonprofit’s impact.
How to Get Started Boosting Retention
We’ve seen the three-step Predict-Engage-Measure and Repeat approach help nonprofits significantly boost their donor retention rates. But how do you get started? You likely already have the tools needed to engage at-risk donors, now the key is to proactively identify them.
For AI-driven churn predictions, you’ll also need machine learning software for nonprofits to identify and quickly funnel at-risk individuals into your Engage and Retain program—no need for complex filters in your CRM or inaccurate segmentation.
Examples of this Donor Retention Strategy in Action
Nonprofits using Dataro have seen some impressive results for their monthly giving programs. Here are two examples:
Victor Chang Cardiac Research Institute – Read the Full Case Study Here
- 296 estimated regular givers saved
- $57,311 estimated campaign return
- 3.19 estimated campaign ROI
We also worked with VCCRI to test the effectiveness of Engage and Retain call programs:
In this graph, donors who did not receive retention calls are represented by the black line, and they ultimately churned out of VCCRI’s giving program at predicted rates. Donors who did receive personal retention calls are represented by the orange line—and they were retained at much stronger rates.
Greenpeace AU – Read the Full Case Study Here
- 64 estimated additional donors retained in one month
- $23,040 estimated campaign return
- 2.13 estimated campaign ROI
Greenpeace used Dataro’s AI technology to predict which of their donors were at risk of churning and then funneled these donors into a rolling call program. Three months after the calls, they found that Dataro’s predictions were accurate, with higher AI churn scores indicating a higher churn rate.
Additional Donor Retention Strategies
To supplement your Predict-Engage-Measure and Repeat donor retention cadence, we recommend a few additional steps you can take on an ongoing basis to reduce churn:
- Be personal with your outreach. One-on-one calls have proven to be extremely effective at saving at-risk donors. A key aspect of this is that your re-engagement messages should be personal. In your calls, emails, and mailers, address the donor by name and reference the impact they’ve had on your organization.
- Always express your gratitude. Lead with a thank you, not another ask for support. Donors want to be reminded that they’ve made a difference for your organization and that you recognize and value their contributions. Wait to ask for donations until after you’ve reestablished contact and engagement.
- Regularly survey your donors. The best way to learn what your donors value about their relationship with your organization and where you can improve is to simply ask them. Create basic surveys to learn more about what donors find meaningful and send them to groups of supporters on a regular basis. Just be sure to actively track and then act on the findings.
- Offer more ways to get involved. A lack of interesting or varied opportunities can become a significant retention hurdle. If donors simply send you their recurring gifts but receive no other updates or opportunities to impact your mission, they’ll likely get bored. Volunteer opportunities, events, engaging campaign themes, and more can all help keep donors excited to stay involved.
Supplementing your core strategy for proactive engagement with these strategies can help cover all of your most important retention bases.
Managing churn and improving retention is certainly hard work, but it’s critical for the long-term health of nonprofits.
Thankfully, AI technology has made it possible to tackle churn and improve donor retention rates sustainably.
By predicting which donors are at risk of churning, you can focus your energy on re-engaging just those individuals (rather than broad, inaccurate segments). To learn more about modern fundraising techniques, keep researching with these additional resources:
- How to Calculate Fundraising ROI: Quick Guide for Nonprofits. Along with donor retention, the efficiency of your campaigns and appeals are major health markers for your organization. Learn more about fundraising ROI with this crash course.
- Fundraising Analytics: 20 Critical Metrics and How to Use Them. Unsure of where to start when it comes to your nonprofit’s data? This guide explains the most important and useful metrics that your team needs to understand.
- Why Machine Learning is the Best Segmentation. Want to learn more about how AI eliminates the need for complicated donor segmentation? Check out this explainer article.