Donor Acquisition vs. Retention:
Why They’re Both Critical
It’s no secret that a strong donor base is critical to your nonprofit’s success.
After all, our organizations need funding to drive its mission forward and keep its operations running smoothly, and the majority of most nonprofits’ revenue comes from individual donations.
There is an age-old debate in the nonprofit sector around building this public support system:
Is it more important for an organization to acquire new donors or retain its existing ones?
In a broad sense, this is a question wrongly phrased.
DONOR ACQUISITION AND RETENTION AREN’T OPPOSITES, BUT RATHER TWO SIDES OF THE SAME COIN, AND BOTH ARE CRITICAL FOR FUNDING OUR NONPROFIT ’S WORK LONG-TERM.
HOWEVER, our organization may benefit from prioritizing one of these activities over the other for a period of time. To help map out our strategy, this guide will explore:
• the benefits of donor acquisition and retention
• when to focus on each one
• and tips for executing these processes effectively.
Donor Acquisition Donor
Acquisition is the process of finding new donors for your nonprofit and securing their attention.
It’s the first step in the donor management lifecycle, immediately preceding cultivation (where we build relationships with potential new donors) and solicitation (where we ask a donor for their first gift).
Benefits According to Donor Search
Donor Acquisition Guide – pursuing support from new donors enables our nonprofit to:
• Expand its reach—not only by increasing our overall number of donors, but also by diversifying our supporter base and identifying community members who care about our mission but haven’t contributed to our organization yet.
• Achieve higher fundraising goals—since a larger donor base naturally allows you to bring in more revenue.Plan for growth through strategic capacity building and long-term impact planning.
When to Prioritize Acquiring New Supporters is most important when our nonprofit:
• Is first starting out so it can receive its first individual donations and lay a foundation for its programs and services.
• Is launching a major campaign, since capital campaigns and similar initiatives require many gifts of various sizes to achieve their ambitious goals.
• Has recently experienced significant donor churn and needs to rebuild its supporter base.
If our nonprofit is currently prioritizing donor acquisition, here are a few strategies that will increase our chances of successfully engaging new supporters:
• Promoting our organization across multiple channels. Using a combination of online (email, social media, digital ads, etc.) and offline marketing methods (e.g., direct mail or flyers) will maximize the number of touchpoints for potential donors to learn about our nonprofit.
• Keep all channels consistent in messaging and visual branding to ensure new supporters know who our nonprofit is and what it stands for.
• Leverage existing supporters’ and corporate partners’ networks.
• Encourage active donors to share our social media content with their followers, and sell branded merchandise so community members can show their support while out and about.
Launching co-marketing campaigns with local businesses can also attract their customers to our organization—and direct our existing donors to their company, so it’s a win-win opportunity!
• Conduct prospect research to identify major giving candidates.
Prospect research allows our nonprofit to collect detailed information on potential donors’ philanthropic history, and affinity for our mission.
This way, we can pinpoint individuals who would be able and willing to make a large donation to our organization and cultivate them intentionally.
Donor Retention
Donor retention encompasses all of the actions we take to maintain relationships with existing donors and secure their continued support.
Retention is the penultimate step in the donor lifecycle, falling in between stewardship
• where we thank supporters after a successful solicitation
• upgrade – where donors take their contributions to the next level.
Benefits Retaining donors provides the following advantages for our nonprofit:
Saving money—on average, it can cost around $1.50 per dollar raised to acquire a new donor, but just $0.20 to retain an existing one.
Building stronger relationships that we can rely on in all circumstances and that lead to a more passionate, engaged supporter pool.
Enhancing our nonprofit’s reputation as a trustworthy organization that cares about its donors and allows community members to make a real difference through their contributions.
Prioritizing Focus on donor retention is most helpful when:
• Our nonprofit is going about its day-to-day operations, so it can bring in sustainable funding to keep its lights on and programs running.
• When facing financial difficulties and need to cut costs while increasing revenue generation.
We want to rally supporters around a pressing issue or opportunity. Since individuals who already recognize and care about our cause are most likely to respond to those calls to action.
Here are a few ways we encourage donors to keep coming back to our nonprofit if retention is our current top priority:
• Thanking supporters at scale. Although stewardship and retention are often considered separate stages in the donor journey, expressing gratitude is critical for securing long-term support. We appreciate every dollar donated & the relationships we cultivate!
• According to eCard – Widget’s donor recognition guide, the size of our thank-you will always match the size of the donation—
Personalized thank you letters with a donor’s name and gift amount for small contributions. And, major gifts will warrant something like an annual report mention or inclusion on our donor wall.
Creating a recurring giving program.
Recurring giving helps our organization bring in reliable monthly revenue while making donating more convenient through automation. Ensuring our online donation processor supports recurring contributions, allows donors to convert their donation to a monthly gift with one click, and lets us suggest accessible but impactful giving amounts to encourage supporters to join our program.
• Communicating transparently about our donors’ impact. In all of our impact-related communications (thank-you notes, annual reports, campaign follow-ups, etc.), clearly explain what individual donors’ contributions have allowed our nonprofit to accomplish. This transparency is especially important when reporting back to supporters who’ve designated their gifts for specific purposes to demonstrate that we’re allocating those funds as intended.
Although we might prioritize one or the other in the short term, donor acquisition and retention are both vital to our nonprofit’s long-term success.
This guide starts developing our strategy for whichever process we’re choosing to focus on to achieve our current goals. It helps us make sure we track our organization’s donor acquisition and donor retention rates so we can fine-tune our approach to both over time.
OUR STRATEGY IS INTENTIONAL IN ORDER TO SUCCEED IN OUR MISSION & CELEBRATE OUR SPONSORS!
WE HOPE OUR CAUSE APPEALS TO YOU.
YOU CAN SUPPORT US WITH MONTHLY DONATIONS OR IF YOU ARE INTERESTED IN HELPING WITH MAJOR MILESTONES, PLEASE REACH OUT TO MARTINE.
Sponsorship Is Like A Warm Hug
This structure we follow is provided by DONOR SEARCH