Let's Raise Some Money
Insights from Karen Climer about fundraising and nonprofit organizations

The One Thing You Need To Do To Increase Your Retention Rate

July 14th, 2014 by Karen Climer

You can’t go to a fundraising conference, read a nonprofit journal, or discuss issues with colleagues without the Fundraising Effectiveness Report being mentioned.  This is the research report that says nationwide donor retention rates is 39%.  Yikes!

I’ve read hundreds of articles and blogs and listened to presentations about the retention rate problem.  Everybody says we need to do a better job of engaging donors, thanking donors, and reporting back to donors.  I have a simpler solution.  We need to measure retention.  That’s it.  If we consistently measured retention, everything else will fall into place.

In every organization I’ve worked with, they have a budget that says they need to raise a certain amount this year.  Then they break that down by how much they will raise from major gifts, events, direct mail, grants, etc.  On a regular basis, the staffers look at where they are now compared to where they need to be by year-end.  We need to raise $43 million and after the first quarter, we’ve only raised $5 million.  What do we need to do?  Or our events are raising plenty of money, but we are lacking in major gifts.  Do we need to adjust where we are spending our time?  This is a great system and every single place I’ve ever worked with does this.  Even the smallest, newest, most grassroots organization does this.  It works.

Retention rates are different however.   No one thinks about them until one day a new staffer or a consultant runs a report and says, “Our retention rate is 10%.  What’s going on?”

Then everyone else shrugs and say, “Well, we are meeting our goals every year.”  In other words, “We are taking care of the things that are measured.”

If you change your monthly report, you will change your organization.  Why is that?  Because the things that get measured get done.  When planning for the upcoming year, don’t just set dollar amount goals for individuals.  Decide how much you will raise from new donors and how much from current donors.  Additionally, set a goal for the number of donors who will stick around.  When you print the monthly report for the staff and board, be sure to include the actual and targeted retention numbers on the report.  If the targeted retention rate is 50% and right now we are at 10%, what do we need to do to increase it?

In most organizations, retention is not measured because it’s not part of the budgeted income.  It’s easy to change this.  If your budget has $10 million from individual donors, change this to $8 million from current individual donors and $2 million from new individual donors.  Problem solved.  I guarantee the staffers will do what they need to do to retain their $8 million of current donors.  They will do it because the things that get measured get done.

Posted in Organizational Culture, Retention

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