Why Donor Retention Is Critical to a Successful Year-End Giving Strategy
The holiday season is a traditional time for nonprofits to seek additional donations. Perhaps you're considering reaching out to new leads or revisiting past donors. Regardless, before you make that move, it is crucial to have a clear plan for nurturing these relationships for retention.
In the wake of the pandemic, people from all walks of life have developed new habits and ways to connect. This shift isn't exclusive to retail or religious sectors; it's also evident among your organization's community of supporters. This evolving landscape coincides with a noticeable decline in smaller donations and donor acquisition, including a startling revelation from the authors of “The Generosity Crisis”:
"The number of Americans making charitable gifts has reached an all-time low, with projections showing potential declines into single-digit percentages within the next 49 years."
Given this, it's more important than ever to prioritize donor retention over immediate fundraising goals. It's not worth investing in one-time asks if you can't ensure those donors will support your mission again within the next six months.
Otis Fulton, in a NonProfit PRO article, highlighted the cost implications:
"It typically costs nonprofits two to three times more to recruit a donor than a donor will give in their first donation"
This underscores the importance of retention for a nonprofit's financial health.
While year-end financials are crucial, it's short-sighted to focus solely on immediate revenue without considering long-term donor relationships. If you don't prioritize donor engagement and retention, you risk losing them and incurring higher acquisition costs in the future.
Think about the donor's journey with your organization over the next year. How frequently will you engage with them? Relying solely on an annual event is insufficient. With the plethora of engagement opportunities available today, a once-a-year approach will render your organization forgettable.
Recent trends show that virtual supporters are inclined to support a cause approximately every 90 days. Hence, it's vital to have engagement strategies in place for each quarter, ensuring a diverse range of opportunities.
Efficient planning doesn't require excessive resources. You don't need to meet major giving standards for portfolio management, or host events in multiple locations. Instead, focus on innovative ways to foster community, education, and philanthropy.
Social media, inherently a tool for connection, offers a cost-effective way to build lasting relationships and authentic community while still driving core business goals like engagement, leads, and revenue.
If these objectives aren't central to your social media strategy, it's time to reevaluate.
Emerging technologies can streamline your social media fundraising efforts, making connections more accessible and valuable. Social media engineers have been focusing on enhancing messenger functionalities and users are now leveraging social media for both individual and community interactions. Is your organization present where your supporters are?
“The Generosity Crisis” emphasizes that forward-thinking nonprofits must adopt technologies to meet evolving consumer expectations. Engaging with social media followers and off-platform donors can foster a sense of community. Building personalized communications on social media platforms allows organizations to not only fundraise but also cultivate enduring relationships with supporters.
As you approach your year-end fundraising initiatives, reflect on the importance of connection. Consider where and how you'll engage with donors in the future. By focusing on long-term relationships, you'll start the new year with a solid foundation, eliminating the need for a hefty acquisition budget.
The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.
Related story: Best Practices for Year-End Fundraising
Amanda Baldwin boasts over a decade of expertise in philanthropy and nonprofit development. Currently, she's a senior customer success manager at GoodUnited, a marketing automation platform that helps nonprofits find their supporters where they are — on social media.