Focus on Retention?
When it comes to fundraising, many organizations place a strong emphasis on acquiring new donors. And while acquisition is important, there’s something even smarter about focusing on retention.
Let’s start with the math.
Consider the analogy of a shoe salesman. A successful shoe salesman knows that while a first-time buyer is valuable, the second-time buyer is even more so. Why? Because a second-time buyer is significantly more likely to purchase a third and fourth pair of shoes than a first-time buyer is to buy that crucial second pair.
This principle applies almost identically to your financial contributors.
The Value of Repeat Donors
From recent discussions, we’ve highlighted a critical fact: fewer than half of first-time contributors will make a second gift. This means that while you must invest resources to nurture all first-time donors, the likelihood of them giving again is uncertain.
However, here’s the key insight: Once a donor makes that second contribution, 80-90% of them will give a third time. And 80-90% of those will contribute a fourth time. The pattern continues, making each subsequent gift easier and less resource-intensive to secure than the one before.
This creates a compounding effect. The more times a donor gives, the more likely they are to continue giving. That’s why retaining donors is so crucial—it’s about building a sustainable, long-term relationship.
The Financial Consequences of Acquisition
Now, let’s take a quick look at donor acquisition. Typically, less than 1% of the prospects you ask will contribute for the first time. This means you’re essentially paying for the 99% who ignore your plea.
While prospecting is necessary and valuable, the return on investment (ROI) for retention is significantly higher. By reallocating resources to focus more on retention, you can achieve greater profitability and long-term success.
The Bottom Line
Focusing on retention isn’t just a smart strategy—it’s the key to building a strong, sustainable fundraising program. By prioritizing repeat donors, you’ll spend fewer resources while increasing your long-term financial stability.
As you consider your next steps, think about how you can shift more of your focus toward retaining the donors you’ve already acquired. It’s an investment that will pay off in dividends.
