Do you remember Ponos? She’s the dedicated VP for Development at the fictional nonprofit, PRoGI (Paving the Road with Good Intentions). Recently, Ponos faced a major challenge—defending her new-donor acquisition strategy to a skeptical board member, Maddie Gottrocks.
Thanks to a tip from John Davis, VP of Growth at the Leadership Institute, Ponos was able to demonstrate the value of PRoGI’s long-term donor strategy using a Donor Performance Calculator. Her data showed the enormous power of Donor Lifetime Value (DLV), emphasizing how investments in new-donor acquisition pay off over the long haul.
But there was a problem. The retention rates for PRoGI’s donors were worryingly low. While most organizations retain 45-60% of first-time donors, PRoGI was struggling to keep more than 30-35% of their donors coming back for a second gift. Even worse, only 60% of these donors made a third contribution, compared to the industry standard of 80-90%.
Why Is Retention So Low?
The challenge Ponos faces isn’t unique—many nonprofits struggle with donor retention. As Mitch Nozka insightfully pointed out, it comes down to two things:
- The “Faucet”: You need a strong strategy to bring donors in. This includes direct mail, advertising, and digital communications.
- The “Bucket”: You need to keep donors engaged once they give. If there are too many holes in your bucket, they’ll leave.
Mitch nailed it. If your donors don’t feel valued, heard, or surprised by your level of care, they’re likely to walk away.
Plugging the Holes: Why Donors Leave
Retention is all about building strong relationships. Something as simple as a handwritten thank-you note can make all the difference. If donors aren’t impressed or properly acknowledged after their first gift, they may leave without ever realizing their full Lifetime Value.
This idea was highlighted in a 2014 experiment conducted by John Davis at the Leadership Institute. By sending $50-99 donors a jar of honey—previously reserved for $100+ donors—he found that gratitude increased future giving significantly.
The takeaway? Gratitude matters. And showing it early can stop donors from slipping through the cracks.
