And you probably know that keeping a donor is much less expensive than getting a new one.
But what you may not know is that despite this fact and despite the enormous amount of homage fundraisers pay to the concept of retention, the truth is that nonprofits are failing–and failing badly.
Studies across the sector reveal consistently falling retention rates. Donors are simply not staying with organizations. More than 60 percent don’t return from one year to the next. And for new donors, the numbers are worse. In 2012, 7.5 out of every 10 first-year donors didn’t give to that same organization the next year, according to the AFP/Urban Institute’s 2013 Fundraising Effectiveness Project Survey.
What about your organization? Do you know your retention rates?
Are you bringing on new donors?
Are you keeping your loyal givers?
Are your new donors renewing beyond their first gift?
If you don’t know the answers to these questions, it’s like throwing your fundraising investment dollars into the wind. They could end up in the right place, but they could make no difference at all.
Our new e-workbook from Front Range Source can help. The Leaky Bucket provides simple, straightforward instructions for how to determine your retention rates for both longer-term and new donors. It’s interactive so you can plug your numbers right into the workbook and determine what’s going on in your donor database and what to do about it.
Here’s how The Leaky Bucket works:
Think of your donor file (the people who give to your organization) as a bucket. New donors come into your bucket through acquisition efforts, like direct mail, event, or board contacts. Some stay in the bucket and even upgrade their gifts over time. But, all donor files have attrition or donors that lapse or do not repeat their gifts. This attrition forms the leaks from the bottom of the donor bucket.
There are four different kinds of leaky buckets in our workbook:
The Classic Leaky Bucket: You are bringing in new donors, but not keeping the ones you already have.
What can you do: Figure out why your donors give to you and what you can do to inspire them to give again.
The Second Gift Leak: You are bringing in new donors, but they aren’t making a second gift.
What you can do: Make sure that you have a welcome system in place that engages new donors from the beginning.
The Slow Leak Bucket: You don’t have any proactive efforts in place to bring in new donors, and your existing donors are “naturally” leaking out of the bucket. No organization can keep 100 percent of its donors.
What to do: Put an acquisition plan in place that will get you the donors you want. Don’t wait around for them!
The most important thing is to know what your bucket looks like. Even if you have good acquisition and retention strategies in place, your organization could be missing opportunities.
Take a moment to download The Leaky Bucket workbook and plug in your numbers to determine what kind of Leaky Bucket you have. The workbook will also give you more specific strategies for what to do to seal up those leaks!