Most non-profit organisations experience slower months at certain times of the year. Typically, these slower periods involve decreased donations and fewer fundraising events. Quiet times can be challenging for nonprofits but provide a chance to strategise and prepare for more active fundraising months.
One strategy nonprofits should consider focusing on during these periods is maximising donor retention and lifetime value. Dedicating time to current donors can provide numerous opportunities and benefits. Plus, it allows nonprofits to significantly impact their surrounding communities.
What does donor retention and lifetime value mean?
Donor retention is a nonprofit's ability to encourage people to give again. Think of it as a lasting friendship with someone who believes in your cause. The longer and stronger this friendship remains, the more they will support you over time.
On the other hand, lifetime value is the total amount a donor gives throughout their entire time supporting your cause. This increases when someone donates year after year.
The two ideas are closely linked, as high donor retention often leads to greater lifetime value. Focusing on the two is important, especially during slower months. Because donations may drop during these periods, non-profit organisations must work hard to keep going.
Many non-profit organisations are struggling this year due to the economic downturn. According to The Nonprofit Alliance's 2022-2023 ADRFCO Survey, 84.85% of groups claim inflation is their biggest challenge with fundraising.
That's why maintaining strong relationships with your existing donors is crucial. They will keep returning to support your cause, providing stability during challenging times. Nonprofits receive $107 on average when they use recurring tactics like text-to-donate and QR codes.
The benefits of donor retention and lifetime value during slow months
Maximising donor retention and lifetime value is crucial during slow months because it can provide you with the following benefits.
Stable financial grounding
One of the most valuable benefits of maintaining high donor retention and a good lifetime value is its financial stability. Slow months can be unpredictable, and having a steady stream of recurring donors can cushion against income fluctuations. This consistency in cash flow enables nonprofits to continue operating without compromising their programs or laying off staff.
Enhanced trust and relationship building
During slower periods, an organisation has the time and opportunity to focus on building deeper relationships with existing donors. These connections are invaluable to nonprofits because they can depend on their loyalty and support.
However, the donor must feel appreciated, recognised and a part of the cause so they're more likely to stay. That bond of trust develops over time, leading to them becoming advocates for your mission. This increases their lifetime value as a result.
Lower fundraising costs
Business leaders know that customer acquisition is more expensive than retaining an existing one. The same is true for nonprofits. If they constantly need to attract new donors to their organisation, they will spend more money on marketing campaigns and outreach efforts.
On the other hand, increasing donor retention allows nonprofits to save time, money and resources spent on acquisition campaigns. Instead, they can allocate these savings to enhance their programs or invest in other essential areas.
Predictability and planning
According to Classy's The State of Modern Philanthropy 2023, 4.6 years is the average lifetime of recurring donations. A reliable group of recurring donors lets you predict how many contributions you will receive for the next period.
It is easier to budget, plan and make informed decisions about future projects when you have a good idea of how many donors are likely to give during slow months. This knowledge is crucial for smaller nonprofits, which often operate with tighter margins.
How can you increase donor retention and lifetime value rates during slow months?
Implement these simple but effective strategies if you are ready to maximise donor retention and lifetime value rates.
Regularly engage with storytelling
Stories are a powerful way to connect with people on an emotional level. They are especially effective on donors because they show how their contributions help. Hearing about real individuals whose lives have changed because of their generosity reinforces their belief in the program. It is also a reminder of the difference they are making.
Be sure to regularly engage with donors through storytelling by sharing successes and personal testimonies. Doing so will keep their interest because you consistently share interesting new updates. Plus, you will further establish an emotional connection with your donor base.
Show your appreciation
Showing your appreciation matters because it reminds donors that their contributions are important. It also gives you a way to recognise their efforts, and this special attention helps them feel valued. You strengthen that bond with them once you show them how thankful you are for their actions. In turn, this encourages them to continue supporting the cause.
Showing your gratitude can be as simple as a handwritten thank-you letter. Consider offering recurring gifts, like branded merchandise or early access to purchase tickets for events. Small gestures like these make them feel exclusive and will help you achieve your donor retention goals.
Offer more ways to give
Consider providing various ways for donors to contribute. Doing so gives them options that cater to their preferences, as some may prefer a certain payment method over another. This ensures everyone finds a way to support the cause, increasing the likelihood of continuous support and raising the overall lifetime value of each donor.
Consider introducing a flexible online donation platform for one-time gifts, recurring donations and options like gift matching. You could also offer mobile giving, which lets donors contribute via an app or texting. Some people may find this method more convenient because it allows them to give at any time.
Nurturing donors for higher retention and lifelong support
Maximising donor retention and lifetime value is crucial for any nonprofit, especially during slow periods. Luckily, several tactics allow non-profit organisations to achieve retention goals, from ongoing engagement through storytelling to showing appreciation.
However, donors are more than funders - they are partners in your mission. Nurturing these relationships builds a community with a common vision. Together, you can create lasting change.
Copyright 2023. Featured post made possible by Eleanor Hecks, founder and managing editor of Designerly Magazine. She's also a web design consultant with a focus on customer experience and user interface.