How to Calculate Your Donor Retention Rate – And Why it Matters

As a fundraising professional, you can barely attend a fundraising conference, watch a webinar or read a blog post without encountering the concept of donor retention. And for good reason.

Defined as the percentage of donors who give to your organization one year and then—of those same donors—who give again the following year, donor retention is a key measure of the overall health and efficiency of your fundraising program. It costs your organization far more, in both money and staff resources, to find new donors than to retain your current donors.

Unfortunately, nonprofit organizations—at least those based in the U.S.—have less than stellar donor retention rates. According to the 2016 Fundraising Effectiveness Project report, the donor retention rate was 46 percent in 2015. That is, only 46 percent of 2014 donors made repeat gifts to participating nonprofits in 2015.

In other words, a whopping 54% of 2014 donors did NOT give again in 2015 to the participating nonprofits. Many articles have been written about why our collective donor retention rates are weak and how to fix them, including this one on stewardship.

If you are interested in boosting your donor retention rate—and I urge you to be interested! —a good first step is to calculate your current rate. Say you are looking at the retention rate going from 2015 to 2016. Start by identifying a group of donors from 2015. Maybe it’s all donors who made a gift between January 1 and December 31, 2015. Let’s say this number is 342 donors.

Then look at these SAME 342 donors in 2016: how many donated again in 2016? Let’s say of the 342 from 2015, 240 gave again in 2016. To find your retention rate, divide the number of 2016 donors (240) by the number of 2015 donors (342) and multiply by 100.

(240 ÷ 342) x 100 = 70%.
(Note that 70 percent is a pretty good retention rate!)

To best utilize this data, implement a donor stewardship plan at your nonprofit and then track your donor retention rate year after year. Wisdom says that if you are doing a good job with stewardship, your retention rate will increase. In other words, more donors will support your organization year after year. And check out this terrific infographic summarizing many findings of the 2016 report.

Do you know the donor retention rate for your nonprofit? Does your nonprofit have a donor stewardship plan? Please share your thoughts, tips, and advice in the Comments box below!

A special gift for you: Conquer Your Fear of Asking for Money, a step-by-step guide, is available here (click).