Helping Nonprofits Raise More Money & Do More Good

Donor retention improves when you close the loop.

Increase Donor Retention by Closing the Loop with Givers

Posted: June 6, 2019 |

Reaching your fundraising goals every year requires a delicate balance of effort from everyone on your team. Every day, you must decide how much effort should be put towards donor retention and how much attention should be paid to finding new donors.

Each initiative comes with its unique set of problems and opportunities, but nonprofits focus most of their efforts on recruiting new givers. After all, we know that 76% of donors don’t give a second time.

However, daunting as that statistic may be, it’s actually more efficient to focus on donor retention in addition to gaining new donors as you pursue your fundraising goals. In this post, we’ll explain why closing the loop with your donors will greatly contribute to increasing the lifetime value of your donor base.  

The Risk of Delayed Communication to Donor Retention

One major factor that isn’t accounted for when your team focuses exclusively on new donors is attrition. That is, how much money you’re losing by not reengaging previous donors. According to the 2018 Fundraising Effectiveness Survey Report, in 2017, giving was up by 2%, which amounted to $247 million more in donations. That sounds like great news. People are giving more and nonprofits have more resources to do more good. However, when you account for the losses due to attrition, the story changes.

It turns out that in 2017, every $100 gained was offset by $96 in losses. Think about all the resources, money, programs and time that goes into getting $100 from a single new donor. Now imagine putting all that effort only to earn four more dollars. Now, compare the effort it would take to increase the gift size from a new donor and one who has given before.

It’s starting to look like you might need a more comprehensive donor retention plan, right?

Of course, we think you should approach fundraising from all angles. You won’t see the growth you want without strategies for all kinds of donors. But if you’re looking for the easiest way to start improving your donor retention rate, start with closing the loop.

Strategies for Closing the Loop with Donors

‘Closing the loop’ simply means communicating with your donor base. It looks different at every nonprofit, but essentially, it’s making sure that any time a donor interacts with you, they get a response. It’s more than sending a receipt, though. Closing the loop means you’re providing something of value that helps donors feel appreciated and part of a cause. Here are some of the best, most efficient, ways to close the loop with your donors to increase retention.

Send Multiple Thank Yous

You’re probably already sending a receipt after each donation. Hopefully, you’re sending a thank you letter to big gift donors. But, to be most efficient, and avoid attrition, you should have a few touch points for every donation. For example, every donor should receive a thank you letter immediately following their donation — no matter the size. Send an email separate from the receipt to make it more personal and engaging (more on that later).

To take it one step further, and increase donor retention, think about a thank-you series to send to your donors. For example, follow up an automated thank you email with a personal email from someone at your nonprofit doing the work your donor is interested in. After that, send a direct mail piece with all your favorite pictures from last year’s work. You might even be able to shout out some of your donors on your social media channels, if they elect to be recognized in that way.

For some nonprofits, sending a variety of thank yous won’t be possible. That’s ok. The frequency is not as important as the impact. Make sure that your donors feel appreciated immediately, and then show them how they are not only part of your nonprofit community, but also a part of the solution. Give them examples of ways their generosity is making an impact on the world.

Highlight the Stories

One way that nonprofits like to communicate impact to their donors is with impressive numbers. They’re a quick way for people to understand your work, even if they’re just glancing through your content. Unfortunately, grabbing someone’s attention is not the same as keeping it. To build a strong connection with your donor base — one that will get them to donate more than once — you have to tell the stories behind the numbers.

When you’re updating donors with information about their impact, make sure to include a mix of big numbers and small, personal stories. Highlight stories from your employees, show photos of the recipients of donors’ generosity and include video clips from the field — wherever that may be.

Remember that serious work doesn’t always require serious stories. If you capture a funny situation or a moment where everyone is having fun, don’t be afraid to show it off to your donors. Not only will they connect to the stories, but it may encourage them to donate their time as well as their money.

Collaborate on Future Goals

Some causes are too big to inspire enthusiasm from donors over time. For example, curing a disease takes years, sometimes decades. Without noticeable progress, it’s easy to understand why a donor’s priorities might shift.

To make sure donors won’t lose interest, close the loop by keeping communication open about future goals. Survey your donors about smaller goals they’d like to work towards throughout the year. Maybe donors would like to see you host more events rather than attend more conferences. You might find out that donors would like you to spend more money on marketing to attract new people to your community.

We’re not suggesting you change the mission of your nonprofit to fit your donors’ needs. But if you have a few ideas you want to try, ask for their input. It closes the loop by making them feel valued. Plus, you won’t have to waste time on initiatives that won’t resonate with your donor base.

Personalize Their Experience

You have a lot of information about your donors’ activity right at your fingertips. Close the loop and increase donor retention by using that data to celebrate milestones. Call your donors to celebrate their anniversary of giving. Send a card when they’ve donated $1,000 in their lifetime. Create friendly, regional competitions, highlighting top donors in a few major cities across the country.

By engaging with your donors in small ways, you prove that you are paying attention to them. You prove that they are not just another transaction and that their generosity means something to your nonprofit. You’re closing the loop in an authentic way that shows they are a priority to your nonprofit and you want them to be part of your work for years to come.

Meet in Person

The ultimate way to close the loop and increase donor retention is to meet your donors in person. Everything from special trips to meet a donor to informal meetups while you’re in town. No gesture is too small.

One conversation, compared to an email or hand-written note, allows you to do most of the listening. You can learn the details that a survey won’t tell you about why they gave and what keeps them interested in your work. You can then use that information to personalize their experience of your nonprofit. Share any important notes with the rest of your team so everyone can reference those details in any future engagements.

You won’t be able to do this with every donor, but the ones who do meet you in person will remember your efforts. It might be just the thing that inspires loyalty and increased giving.

Elements of A Great Thank You Letter to Close the Loop and Increase Donor Retention

Some of our suggestions may be a future goal for you. Every nonprofit — no matter what size — can start closing the loop and increasing donor retention with a great thank you letter. Here are some elements that will transform a regular thank you to a powerful note that inspires loyalty and curiosity.

First, Add the Basics

First and foremost, include all the right information in your thank you. Obviously, you want to include their name and their specific donation amount. You also want to go a step further and make sure your information is personal too. Don’t email a thank you from a generic info account. Add as many details as you can to make it obvious that you are grateful for their individual donation and they aren’t just another transaction for your team.

Illustrate Impact

Include information about where their donation is going. If you have specific splits, include that information. For example, does 60% of every donation go to administration and 40% go directly to the cause? Tell your donors. Transparency is key when you’re trying to hook new donors and build trust with them.

You can also work with designers to see how you might be able to translate different donation amounts into a percentage of your cause. For example, does every donation under $100 equal 100 water bottles? Find an interesting way to show that. People will appreciate the tangible impact, and it might inspire them to graduate to the next giving level for their next donation.

Offer Additional Giving Opportunities

Most nonprofits do not ask their base for donations frequently enough. You might think that making a second ask in a thank you letter is too much, but here’s why you should try it. Donors who have just given are the most active and engaged people in your network. They are primed to advocate for you and push your cause forward. All they need from you is how.

Make sure your thank you letter has a few ways that a donor can give that doesn’t involve money. Encourage them to share an informational packet with their closest friends to learn more about your nonprofit. Ask them to share something on social media. Include a link to volunteer their time at an upcoming event in their area. Encouraging people to take a second step gives your donors an idea of all the different initiatives you’re working on and how they can help. It’s the perfect next step in a thank you email.

Closing the Loop With Donors Is Easier Than You Think

Closing the loop requires a sophisticated communications plan, but it’s imperative to your success as a nonprofit. If you want to learn more about how you can start a powerful email marketing strategy that will convert more donors, check out our guide. And as always, tweet us with your favorite strategies! We want to hear what works for you (and what doesn’t).

Avatar
Jeff is passionate about digital marketing, design, and helping nonprofits connect with their donors to have a greater impact in the world.

See more posts from Jeff Jacobs

Get the Best Nonprofit Resources Delivered Right to Your Inbox