I’m always amazed by the number of organizations that we talk to who don’t know their retention rates (both new-to-file and existing donors) or simply aren’t focused on it.

In today’s fundraising environment, the days of having an infinite stream of new donors available to replace those lost are long gone. Further, with rising acquisition costs, decreasing list universes, and pressure on response rates, it’s a wonder more organizations aren’t focused on reducing this “once-and-done” revolving-door cycle.

Retention is one of the most predictive leading indicators of the health and long-term sustainability of an organization and should really be their highest priority; in fact, it’s a matter of survival for many of them!  It’s often referred to as a silent killer, since the effects of poor retention aren’t immediately visible and often don’t show themselves until it’s too late.

According to a survey of over 25,000 non-profits of all sizes, the average first-year retention rate in 2013 was 23%!  This means that nearly 3 out of every 4 donors that an organization acquired gave once and never gave again.  This percentage is very consistent with the files that we analyze and the audits we perform.

In a survey conducted by Campbell Rinker, 53% of donors stopped giving to an organization due to poor communication.  While “poor communication” is a fairly general category, I believe it likely can be traced to the following three areas:

1. The Thank-You Letter.  It all starts with the thank-you letter.  This is especially true for new-to-file donors.  New donors are still uncertain, so give them more reasons to care about your work.  Explain how their gift supports your work in a larger way.

   Remember, it’s not the first gift that’s most important—it’s the second one, and first impressions count.  You have to earn the right to ask again!

   Ideally, the thank-you letter should be mailed within 24-48 hours of receiving the gift, and it should also be personalized.  When possible, use variable messaging to identify what motivated the donor to give, and remind them of the need they responded to—after all, they cared enough about it to give you money.  Plus, a donor who feels respected and appreciated is more engaged and will give more over time.

   Thanking your donors in a very timely manner is one of the most important things that you should be doing because it helps solidify the goodwill you are trying to establish.  Yet, for many organizations the thank-you program is often an afterthought and at the bottom of their priority list.

2. Communicate Your Progress.  Donors want to know where their gift is going and how it is being used.  They want to know that their gift is having an impact on your cause.  Even if you’re updating them in the thank-you letter, repeated personalized communication is critical to building trust and loyalty, especially during that crucial first year.

   Donors need to know what their gift did before they are willing to give again.  Give them specific examples detailing the impact of their support, and more importantly, give them credit for your success.  Tell them how you will use (or already are using) their donation.  Communicate measurable accomplishments and impact; show them results!

3. Engage And Ask Frequently.  It’s simple math.  If you’re not presenting the donor with an opportunity to give, they won’t.  The more you ask with a compelling and relevant message, specific to the donor’s interest, the more likely you are to receive a gift.

   I know that a lot of organizations feel that they are imposing on or alienating their donors with frequent correspondence; the truth is that if your message is relevant and personal, a donor won’t mind hearing from you.  Often the greatest indication of what a donor will do is what they’ve just done, so present a strong, compelling need, engage them, and if they feel led to give, then they will.

For many organizations, even a 5% increase in donor retention can have a major impact on their revenue and the lifetime value of their donors.  While it’s definitely important to acquire new donors, it is at least as important to try to keep the ones you have, since acquiring a new donor costs 5 to 6 times more than retaining an existing one.

So focus on creating and maintaining a well-rounded and personalized communication strategy, and if you don’t know your retention rates, then find out; it could be the single most important thing you do.  After all, you owe it to the donors who help you perform and achieve your great work; they are truly the lifeblood and sustenance that fuels your mission!

Chris Moore is an Executive Vice President, Data Services at Innovairre, which supports more than 500 nonprofit organizations around the world.  To learn more about successful donor retention strategies or Innovairre, contact us at Answers@Innovairre.com.