The Association of Fundraising Professionals (AFP) was the latest to report on the continued trend of more dollars coming into nonprofit organizations from fewer donors. This isn’t a new trend but confirms a shift that has been occurring since COVID. The article notes a decline in donor participation from Q2 to Q3 in 2024 and a striking drop in donor retention. It goes on to discuss the need for more effective donor retention strategies and the need to improve plans to capture small donors.
As an industry, nonprofit organizations tend to be laser focused on metrics. After all, making data-driven decisions is a smart practice for any business leader. As an industry, we obsessively evaluate leadership gifts, contributions relative to goals, and participation rates. We study gift capacity and evaluate prospects for propensity. What fewer nonprofits are focusing on, but more should be, is driving awareness.
Nonprofit quarterly reported in 2016 that it takes ten times more to acquire a new donor than retain an old one. I don’t dispute that statistic but I fear more and more organizations are losing sight of the importance of driving brand and mission awareness by pulling back and focusing solely on their existing audiences. The data speaks for itself, it’s not working. That’s not to say every donor retention initiative is a failure but the industry trend, as noted by AFP, is trending downward. We need to do something differently.
Over the past two years, I’ve conducted an informal case study through my own professional practice. The program I lead has chosen to focus boldly on donor acquisition. We didn’t take our eye off the ball on donor retention but when we had the opportunity to make a strategic investment in human resources or capital, we elected to focus the investment on driving awareness of our mission to bring more people in. We told our story and tied our mission to impact fueled by philanthropy. The results may surprise you.
Current donors gave more. Over the past two years, we saw an increase in giving from current donors – a 388% increase in two years. We doubled down on clearly articulating programs where donors have the opportunity to make a difference. We highlighted success by telling the stories of our current donors and used metrics to illustrate impact. We measured what mattered and stewarded our donors in the process. We saw 93% donor retention in 2024.
It’s too early to quantify our success on donor acquisition but if Q1 trends are any indicator, we are moving the needle in a positive direction. New donors are reaching out to see how we can build partnerships that align with their ESG goals. We have already had conversations with existing donors about expanding programs and starting new ones. I’m typically cautious by nature but this bold approach was exactly what we needed to fuel our messaging and get our story out. We were willing to take a short term loss but we saw an exponential gain. For my program, this approach taught me that if you are bullish on your impact, your donors will follow you.
