Why January Is the Most Important Time for Donor Retention
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by Will Schmidt
Over 25% of a nonprofit's annual donation volume occurs from Giving Tuesday through December 31. And with that spike in donation volume comes a bounty of new donors. In fact, on days like Giving Tuesday and December 31, between 70% and 75% of one-time donations are from brand new donors.
Welcoming these newcomers as they bolster your community of supporters is absolutely cause for celebration, but that's not where the work stops. How you follow up with these donors, retain their support, and re-engage them on future efforts plays a major role in your success for the next year.
In that light, January becomes one of the most important times of year to connect with your donors, both new and returning. Below, we'll give you the donor retention tips necessary to connect with donors, strengthen old relationships, and nurture new supporters.
Why Donor Retention Matters
According to the AFP Fundraising Effectiveness Survey Report, donor retention hasn't necessarily gotten worse over the last decade. But it also hasn't gotten much better. In 2017, the average donor retention rate was 45.5% and, over the previous 10 years, "retention rates have consistently been weak—averaging below 50%."
What these numbers tell us is that the supporters you've worked so hard to bring in, especially those who came in through your Giving Tuesday and year-end campaigns, can easily disappear. This can be detrimental to more than just your fundraising efforts, especially if you're paying a high donor acquisition cost (DAC): it's often more cost-effective to retain donors instead of acquiring new ones.
Thus, donor retention efforts are crucial for the long term viability of your nonprofit and its fundraising operations. Since January is the start of a new year, it's a natural opportunity to reach out to all your donors, not just the new ones. There are a few simple steps you can take to retain their support and bolster your fundraising for the year to come.
Donor Retention Tips
1. Thank Your Donors
As with any donor to your fundraising campaigns, Giving Tuesday and year-end donors should receive a genuine, heartfelt "thank you" once the campaign is over. Thanking your donors is a central part of retention efforts, but it's not the entire formula. You should also follow up with your donors about results from the campaign they supported and the impact their gift made.
In this light, January isn't just a time to follow up with December donors. Instead, use this as an opportunity to thank everyone who donated to your nonprofit in the past year. And remember, donations aren't always financial: remember to also thank the people who donated their time and energy, like volunteers.
Additionally, you can use your January outreach as a way to extend new opportunities to get involved with your nonprofit in the coming year. For example, if someone donated to your August fundraising campaign, send them a thank you message along with a reminder that you're running a similar campaign again this year.
You can get really creative with how you send these messages, combining insights about what donors are interested in and upcoming projects you've got planned in similar areas. If you're looking for a good place to start, download these nine templates to make sure you don't miss any important touch points over the course of the year.
2. Create and Send Engaging Content
January is when most nonprofits typically release their annual reports, which is a great reason to get in front of an entire pool of donors and start a conversation with them. Showcase all the data around the impact your collective work has had in the past year. And be sure to include digestible graphics, compelling story copy, and your plans for the next year.
Retention efforts don't have to be purely related to fundraising activity. In fact, you can reach out to your pool of supporters at any point, so long as you've got a valuable message for them to engage with. Aside from your annual report, there are plenty of other content opportunities your nonprofit can leverage to get in front of your donors, like:
- Beneficiary stories
- Programmatic impact results
- Campaign progress
- In-the-field volunteer experiences
- Employee highlights
- Event recaps
- Cause awareness days
- Donor surveys
There are many different channels through which you can promote and send this content to your supporters, like social media posts, blogs, infographics, newsletters, and welcome email series. No matter what you send, or how you send it, everything should provide value to your donors. And remember to always include strong calls-to-action for your donors to get involved.
3. Promote Monthly Giving Options
Asking for more one-time donations is never a bad idea, but recurring givers are over five times more valuable to your nonprofit. Thus, you should take advantage of the new year to ask your supporters to double down on their commitment and upgrade to a monthly recurring giving plan.
Don't be afraid to ask this of your supporters either. In The State of Modern Philanthropy 2019, we focused our data analysis and insights on identifying trends in return donor behavior, and we found that:
- Nineteen percent of return donors re-engage with nonprofits within the first three months after making their gift
- One-time donors who become recurring givers activate their subscription 214 days after their first donation
- Of all one-time donors who return to start a recurring gift, 25% go on to make another one-time gift as a future interaction
Not only are your donors willing to come back before the anniversary of their donation, they're also willing to sign up as recurring givers. So, someone who gave $25 last year, but commits to $5 a month this year, will have more than doubled their original gift by the end of the year: $25 compared to $60.
You can get creative with how you market this option to your audience in January as well. For example, you might run a marketing campaign that promotes your recurring giving program as a way to fulfill a New Year's resolution to help others.
4. Announce Your Upcoming Initiatives
While the new year offers plenty of opportunity to look back at what was successful, remember to include a future-forward component in your donor retention efforts. What does your nonprofit have planned for this year? Do you have any new events, major annual campaigns, or exciting new initiatives?
One thing that everyone has to look forward to in the new year is a birthday—it might be a few days away, or a few months from now. You could market a DIY fundraising campaign where supporters have an opportunity to donate that upcoming birthday, or other major life event like a wedding or athletic milestone, to your cause.
Meet with your staff to gather a list of highly marketable opportunities like this, and then start planning out your touchpoints over the course of the year to come. When you're ahead of the planning curve with a fully built calendar like this, it makes life easy for your donors to simply add notable events to their own calendars and spread word to their networks.
We say January is the most important time for donor retention because it's the start of something new. People return to work refreshed after the holidays, annual budgets are being set, and people are optimistic about the impact they can make in the new year. It's crucial your nonprofit capitalize on this mindset with the donor retention tips outlined in this blog post.
You've worked hard to acquire new donors, so don't let them slip away from your nonprofit. You'll find that some forethought and planning will go a long way towards retaining their support and establishing lifelong relationships with them. If you want even more donor retention tips and advice, download 13 free retention email templates below.
*Editor's note: This piece was originally published in 2015 and has been updated with new information.