How to Improve Donor Retention: Data Insights, Trends & Strategies for Nonprofits

Recent data from Dataro’s 2024 Donor Retention Analysis reveals that donor retention is on a concerning downward trend. In 2023, the typical global nonprofit retained 57.1% of donors (that is, only 57% of donors who gave in 2022 donated again in 2023). For North American nonprofits, overall donor retention dropped to 46.6%.

For nonprofits already dealing with tight budgets and rising acquisition costs, the ongoing decline in donor retention highlights an urgent need to focus on retention strategies in 2025.

In this blog, we’ll dive into the latest donor retention insights and share actionable strategies to help your organization strengthen donor relationships, retain more donors, and achieve your fundraising revenue goals in 2025 and beyond.

But before diving into our analysis of donor retention benchmarks and trends, let’s take a moment to understand the importance of donor retention for your fundraising success and break down the different types of donor retention – why they’re important, and how to calculate the different donor retention rates to measure the effectiveness of your fundraising strategies.

The power of donor retention

Donor retention is a critical measure of how well your nonprofit engages and inspires donors to keep giving in support of your mission. At its core, it tracks the percentage of donors who continue their financial support year after year, offering a clear view of both donor loyalty and the strength of your donor relationships.

But donor retention isn’t just another fundraising metric to monitor – it’s a powerful indicator of your nonprofit’s overall health and long-term financial stability. Because when donors return year after year, they form a loyal base of supporters that provides a steady and predictable revenue stream for your nonprofit. This stability not only sustains your mission and enables future planning but also lessens your dependence on constant donor acquisition, which is growing ever more costly and competitive.

How to calculate donor retention

Calculating donor retention is a straightforward yet vital step in understanding how well your nonprofit retains supporters. 

First, determine which type of donor retention you wish to measure: 

– Overall donor retention
– New or first-time donor retention
– Recaptured donor retention

Overall donor retention rate (%)

To calculate your average donor retention rate each year, use the formula:

» Returning Donors (Current Year) ÷ Total Donors from Previous Year, x 100

Returning donors (current year) =  the # of unique donors from last year that gave again in the past 12 months.
Total donors from previous year = the total # of unique donors who gave 13 – 24 months ago.

Example:

– If 300 donors gave to your organization last year, and 180 of those donors gave again this year, you retained 60% of your donors and lost 40%.

– Your average donor retention rate for that year is 60% (180 returning donors ÷ 300 total donors from the previous year, x 100).

New donor / first-time donor retention rate (%)

While measuring overall donor retention provides a useful overview of donor loyalty, it can be misleading as it hides key differences between first-time donors and more loyal multi-year supporters. This makes it harder to identify key trends and areas for improving donor retention.

First-year donor retention measures how many new donors from last year returned to give a second gift. Typically first-year retention rates are much lower, highlighting the need for implementing effective welcome journeys and personalized follow-ups to secure that critical second gift.

To understand how well your organization retains new donors, use the formula:

» Returning First-Time Donors (Current Year) ÷ Total First-Time Donors from Previous Year), x 100

Example:

– Let’s say your nonprofit acquired 100 first-time donors last year. This year, 30 of those donors returned to give a second gift.

– This means your first-time donor retention rate is 30% (30 returning first-time donors ÷ 100 first-time donors from previous year, x 100).

– While 30% of new donors returned to give again, 70% did not.

Recaptured donor retention rate (%)

Donors may not give to your organization every year – priorities shift, and life happens! But relapsed donors, who already know your mission and care about your cause, are worth re-engaging. 

Reactivating lapsed donors is often more cost-effective than acquiring new ones. Tracking recaptured donor retention rates ensures you’re optimizing your donor reactivation efforts and maximizing the potential of your existing donor base.

To understand the effectiveness of your reactivation efforts, use the formula:

» Recaptured Donors (Current Year) ÷ Total Number of Lapsed Donors (from Previous 1 – 2 Years), x 100

Example:

– Determine the number of donors who had stopped giving for a specific period (i.e. 1 – 2 years). These are your lapsed donors.

– Suppose your nonprofit had 500 lapsed donors from the previous 2 years, and 50 of them returned to give in the current year.

– Recaptured Donor Retention Rate = (50 ÷ 500) x 100 = 10%.

– This means your recaptured donor retention rate is 10% (50 recaptured donors ÷ 500 lapsed donors from previous 2 years, x 100).

– While 90% of donors failed to give again, 10% of lapsed donors.

The state of donor retention in 2024: Donor retention benchmarks to know

Dataro’s data pool of 300+ global nonprofits reveals significant challenges for fundraisers when it comes to donor retention:

Overall donor retention 

• Globally, donor retention rates are declining.
• In 2023, the typical global nonprofit retained 57.1% of donors (that is, only 57% of donors who gave in 2022 donated again in 2023).
• By the end of 2024, overall donor retention was projected to drop further to 55.6%.
• In North America, annual donor retention rates have hovered around 50% (2019 – 2022), according to our analysis.
• In 2023, annual donor retention rates dropped to 46% for North American nonprofits in our analysis.
• According to The Fundraising Effectiveness Project overall donor retention rates range between 40% – 45% for North American nonprofits.

The downward trend in donor retention means global nonprofits, especially North American nonprofits, continue to face the daunting challenge of replacing approximately half of their donor base yearly to maintain their annual revenue.

New donor / first-time donor retention 

• Retention rates for first-time donors have also been on a steady decline. 
• In 2023, only 28% of new donors gave a second gift, and projections for 2024 indicated a drop to just 26.9%.
• That means 72% of first-time donors in 2022 stopped giving in 2023.
• Over the longer term, approximately 69% of first-time donors never gave again.
• However, once a donor gives a second gift, retention rates almost double.
• 59% of new donors continue donating after making their second gift.

Given rising acquisition costs and growing competition for donor support, nonprofits must prioritize strategies that retain new donors and cultivate a loyal donor base to help them achieve long-term financial stability. 

Recaptured donor retention

• On average, just 9.8% of lapsed donors are reactivated annually.
• The Fundraising Effectiveness Project reports that reactivation rates for lapsed donors is as little as 4% and has been steadily declining over the past few years.
• These results suggest a widespread lack of effective reactivation strategies.
• But if you can reactivate lapsed donors, their ongoing retention rate is typically higher than new donors.

Reactivating past supporters not only reduces acquisition costs but also results in a more loyal donor base. However, the low recaptured donor retention rates suggest a widespread lack of effective reactivation strategies.

Why donor retention matters: key data insights for fundraisers

Dataro’s Fundraising Benchmark Report and the latest Fundraising Effectiveness Project data from September 2024 reveal a troubling trend: nonprofits continue to raise more dollars from fewer donors.

This, coupled with declining retention rates, is forcing nonprofits to rely increasingly on a shrinking pool of loyal supporters to sustain their missions.

Declining donor retention creates a “leaky bucket” problem for nonprofits, where new donors are acquired but an even larger share of donors are lost year after year. This puts immense strain on fundraising teams and donor acquisition efforts to fill the bucket to sustain revenue.

According to the FEP report, the donor retention challenge has been most pronounced among new and small-dollar donors, who make up over half of a nonprofit’s donor base. But this group recently accounted for two-thirds of donor losses. While small-dollar donors contribute less individually, their collective volume is vital to sustaining overall donor numbers. Losing large portions of these donors poses serious challenges for nonprofits and highlights the urgent need for targeted strategies to retain these donors and stabilize the donor base.

But retention isn’t just about keeping donors — it’s about maximizing their value over time. 

It makes sense that the longer a donor stays engaged, the more significant their financial contribution becomes:

Exponential lifetime value (LTV) growth 

• By year five, the lifetime value (LTV) of a donor can reach $500 USD. 
• By year 10, LTV triples to $1,550 USD revealing the compounding value of donor retention.
• In the UK donor LTV increases by 2.2x from year 5 to year 10 (from £324 to £722). 
• In Australia/NZ LTV increases by 2.6x (from $900 to $2,340).

Program diversification also increases lifetime value (LTV) 

• Donors who support multiple programs (e.g., appeals, recurring giving, events) are retained longer and have a higher LTV.
• A donor giving to two programs may see their LTV quadruple compared to a single-program donor.

Repeat donors drive a disproportionate share of revenue  

• Repeat donors, while fewer in number, contribute a disproportionately large share of total revenue.
• Their consistent giving and increasing donation amounts over time amplify their overall impact.
• This highlights the critical importance of cultivating and maintaining long-term donor relationships.

Reactivated lapsed donors have better retention than first-time donors

• Reactivated donors tend to have a higher retention rate than new donors.
• In 2023, the retention rate for reactivated donors was 40.4%, compared to just 27.9% for new donors (for the typical global nonprofit).
• Reactivating past supporters not only reduces acquisition costs but also results in a more loyal donor base.

Recurring giving boosts retention and increases lifetime value (LTV)

• Recurring givers / monthly donors are retained at nearly 2x the rate of single-gift donors.
• On average, the retention rate of recurring givers is 83% versus 45% for single-gift donors.
• Recurring monthly donors also have 5.4x the LTV of single-gift donors.
• Recurring giving fosters increased donor loyalty and ongoing engagement and provides a steady, reliable income stream for long-term planning.
• Download Dataro’s Recurring Giving Benchmarks Report for more retention insights by acquisition channel, payment method and acquisition method (acquired versus converted).

The long-term impact of improving donor retention (and how to calculate it!)

Retaining donors isn’t just about reducing churn or replacing lost supporters – it’s about unlocking long-term revenue growth that fuels your nonprofit’s mission.

Loyal donors invest in your mission over time, often increasing the value of their donations, giving more frequently, and engaging across multiple programs. This ongoing commitment creates a stable, predictable income stream that supports the immediate needs of your organization and enables long-term planning. 

Even small improvements in donor retention can have a BIG impact in the long term. By benchmarking your current retention rates and calculating how higher retention translates into financial growth, you gain the insights needed to create a stronger, more sustainable fundraising strategy. Free tools like Dataro’s Donor Retention Impact Calculator make it easy to visualize the impact of retention over the long term and project how higher retention rates (and changes in average gift amounts) can boost annual fundraising revenue, enhance fundraising efficiency, and reduce your nonprofit’s reliance on costly acquisition efforts to maintain fundraising income. 

Improving donor retention isn’t just about keeping donors, it’s about strengthening relationships with the people who already believe in your cause. When you understand the long-term impact of retention, you can make smarter fundraising decisions that help grow revenue and deliver great impact for your cause.

Trends and fundraising strategies for improving donor retention in 2025 

Declining donor retention is a critical issue nonprofits must address in 2025 to stabilize their donor base, achieve their annual fundraising goals, and deliver on their missions.

Several key trends have emerged from Dataro’s analysis that nonprofits should consider as they plan their 2025 donor retention strategies. Investing in these intentional retention strategies will help deepen donor relationships and increase donor loyalty and lifetime value in the years ahead:

1. Focus on new donor stewardship and securing the second gift

Improving retention among first-time donors is one of the fastest ways to boost your organization’s overall retention rate.

Our data shows that while only 31% of new donors go on to make a second gift, an impressive 59% of those who do make a second donation continue giving beyond that point. This underscores the critical role of the second gift in transforming first-time donors into loyal, long-term supporters.

To retain more first-time donors, focus on personalizing their experience and building a meaningful connection to your mission by:

• Sending timely acknowledgment: Provide a prompt tax receipt and follow it up with a heartfelt thank-you message that highlights the impact of their gift and why it matters. Keep this separate from the tax receipt to make it more personal.
• Implementing automated welcome journeys: Use an automated new donor welcome series to educate them about your mission, share impact stories, provide personalized updates, and express gratitude for their support.
• Showing them special attention: During their onboarding period, exclude new donors from general communications and tailor their experience to make them feel appreciated and valued.
• Leveraging data tools: Use tools like Dataro’s Smart Audiences to identify first-time donor segments, enabling you to create personalized and effective outreach strategies.
• Asking for the second gift: Don’t wait too long. Aim to ask for a second gift within 3–7 months, but ensure your onboarding process has made them feel connected and appreciated first.

A focused strategy on nurturing first-time donors can transform a single act of generosity into a lasting commitment to your cause, driving long-term impact and support.

2. Invest in growing recurring giving programs

Recurring monthly giving remains one of the most effective strategies for nonprofits to boost donor retention while building a stable and reliable source of annual revenue. 

Because recurring donors are retained at nearly double the rate of single-gift donors (83% versus 45%), and often contribute additional one-off gifts, recurring donors are 5.4x more valuable (LTV) than donors who make single-gifts only. 

It’s no surprise that more nonprofits are investing in recurring giving programs to retain more donors and create a predictable and sustainable revenue stream.

Since 2019, recurring giving revenue has grown by 26.78%, reflecting the nonprofit community’s expanding focus on this strategy. In 2023, 63.6% of nonprofits in Dataro’s Recurring Giving Benchmark Report grew their recurring giving revenue by an average of 3.6%, with recurring donor bases increasing by 1.8%. North American nonprofits led the way, growing their recurring donor bases by 5.4%, highlighting the focus on recurring giving as an important donor retention strategy.

In 2025, focus on growing your recurring giving by:

• Including monthly giving as an option on all donation forms (rather than defaulting to one-off gifts).
• Converting existing new or loyal single-gift donors to recurring givers and using AI to identify the best prospects in your database.
• Implementing new donor welcome journeys to keep new recurring givers engaged and giving during the critical first 6 months (sadly, 30 – 50% of new donors acquired directly to recurring giving will cancel their gift in this time, and rates vary by channel of acquisition and payment method).

Download Dataro’s Recurring Giving Benchmarks Report for more insights on the best channels, strategies and tactics for growing and maintaining your recurring giving program.

3. Prioritize lapsed donors for reactivation

Reactivation campaigns are a missed opportunity for many nonprofits. You’ve already invested time and resources acquiring these donors – why not try to re-engage them with your mission and inspire them to give again?

With 40% of reactivated donors continuing to give, it’s a worthwhile investment and a cost-effective way to improve donor retention. While the objective is to recapture as many donors as possible, the average recapture rate is only 4%, according to the FEP report from September. 

However, nonprofits using Dataro’s AI donor propensities to help them identify the best lapsed donors to re-engage achieve a 10% recapture rate, far above the industry benchmark of 4%.

Using Dataro’s Smart Audiences, fundraisers easily identify their lapsed donor segment for tailored campaign outreach. By leveraging personalized outreach, multi-channel strategies, and data-driven tools, organizations can significantly improve reactivation rates for lapsed donors and maximize donor lifetime value. 

Going one step further, nonprofits can use Dataro’s AI donor predictions to identify the lapsed donors in these segments with the highest likelihood of supporting their cause again. One innovative nonprofit, Child Cancer Foundation, recently reactivated hundreds of donors in their appeal using Dataro’s AI donor predictions. As a result of improved targeting, 87% of revenue from lapsed donors came from the top-ranked donors.

4. Improve personalization in fundraising campaigns and donor engagement

Personalized donor communication transforms fundraising by making donors feel valued and understood. Every action a donor takes – whether it’s a gift, an email click, or event attendance – reveals their preferences and what matters most to them. 

Many nonprofits struggle to effectively analyze the data in their CRM and marketing platforms to truly understand their donors’ preferences and motivations. This makes it difficult to determine the next best action in the donor’s journey with your organization. Whether it’s asking for a larger gift, converting them to recurring giving, or resting them from the next appeal, nonprofits often lack the personalized data insights needed to make these strategic decisions and truly personalize the donor’s journey and experience with your organization.

As a result, many nonprofits rely on mass-market fundraising or broad traditional segmentation to guide their campaigns and donor engagement strategy. While these approaches can reach more people, they often fail to connect with donors on a personal level. This lack of personalization weakens donor relationships, reduces engagement, and ultimately leads to lower retention rates – further exacerbating the challenge of sustaining a loyal donor base.

AI tools like Dataro solve this challenge by analyzing your CRM and marketing platform data to identify patterns in giving history and donor engagement to deliver personalized fundraising campaigns at scale.

Addressing donors by name, acknowledging past contributions, and aligning asks and communications with their interests make donors feel appreciated, understood, and more connected to your mission. When donors feel this way, they’re more likely to give again, stay loyal, and deepen their support, helping your organization achieve greater impact. This is the power of using AI to personalize your donor engagement strategy.

Personalized donor communication is one of the most effective strategies for retaining donors and building long-term loyalty. 5. Leverage AI and live benchmarking data to adapt your retention strategy

To drive donor retention and improve your fundraising outcomes, nonprofits must consistently measure and monitor key retention metrics and campaign performance. Tracking metrics like donor retention rates, average gift size, gift frequency, and program participation provides critical insights into what’s working and what isn’t. Benchmarking your results against industry standards or similar organizations can help identify performance gaps and uncover areas for improvement, allowing you to refine your strategies throughout the year to drive better outcomes.

But data alone isn’t enough. This is where the power of AI comes in. By analyzing all your available data – across CRM systems and marketing platforms – AI can identify patterns and uncover actionable insights that might otherwise go unnoticed. For example, AI can segment your donor base more intelligently, finding the best audiences for retention campaigns or identifying which donors are most likely to respond to specific appeals.

Beyond identifying the right audiences, AI enables personalization at scale. It can tailor how you engage donors by suggesting the ideal message, channel, and timing for each donor. This means moving beyond generic fundraising to deliver highly targeted campaigns and relevant donor experiences that make donors feel understood and valued, without adding extra workload for your team.

When nonprofits harness AI to measure, benchmark, and analyze their performance and improve personalization in their engagement strategies, they can optimize retention efforts, strengthen donor relationships, and ultimately maximize the impact of their fundraising efforts.

Here’s what other nonprofits have to say about using Dataro in their fundraising and the results they are achieving.

If you are ready to improve donor retention in 2025, contact our team today or read more of our customer success stories here.