UN SDG #17 Partnerships for the Goals UN SDG #17

challenge

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Improving Donor Retention for Nonprofit Organizations

Organizations experience sharp declines in donor retention rates. Donors choose to continue donating to an organization based on the impact they perceive their donation to make. The better the perceived impact, the higher the donor retention. Organizations need a more effective way of showing their donors quality impact metrics and expressing their genuine gratitude to remain financially stable.

challenge

2 shares

Improving Donor Retention for Nonprofit Organizations

Organizations experience sharp declines in donor retention rates. Donors choose to continue donating to an organization based on the impact they perceive their donation to make. The better the perceived impact, the higher the donor retention. Organizations need a more effective way of showing their donors quality impact metrics and expressing their genuine gratitude to remain financially stable.
40M
people impacted
$1.2B
potential funding
the problem
Nature and Context

According to the 2014 Fundraising Effectiveness Survey Report for 2012 - 2013, the average donor retention rate is only 43%. This donor retention rate can significantly impact the operation and effectiveness of nonprofit organizations which spend much of their time developing relationships with potential and current donors.

It is generally more cost-effective for organizations to retain and motivate an existing donor than it is to seek a new one. Reductions in gift losses are often the most cost-effective strategies for maximizing net fundraising gains.

Symptoms and Causes
the impact
Negative Effects
  • Low donor retention rates reduce net fundraising gains by requiring expenditure on development operations.

  • Reduction in net fundraising limits the effectiveness of operations and inhibits the potential social impact of nonprofit organizations.

  • Communities generally served by public interest and nonprofit organizations are then forced to rely on sub-optimal resource allocation.

Economic Impact

Success Metrics
  • Increased donor retention rate.

  • Growth in year-by-year net fundraising gains.

  • Increased value of services provided to target communities.

who benefits from solving this problem
Organization Types

Nonprofit

  • Clothes for Kids, a charity which provides new school clothes to low-income K-12 students in Snohomish County, would benefit from a solution that aids in retaining and communicating with their donors.

Stakeholders
  • Public interest and nonprofit organizations.

  • Target individuals and communities.

financial insights
Current Funding
Potential Solution Funding
ideas
Ideas Description

Donor information is highly sensitive, which would require an adequate solution to be privacy-focused as well as efficient to optimize a nonprofit's resources.

Blackbaud's Donor Perspectives: An Investigation into what Drives your Donors to Give found that: '...the results indicate that…charities can do more to keep these important donations. By tracking the impact of contributions and communicating that impact back to donors, nonprofits can increase the number of regular donors and ensure they are not losing the regular donors they have.”

Effective communication of donor impact is critical in retaining regular donors.

Ideas Value Proposition
Ideas Sustainability
attributions
Contributors to this Page

Giving Tech Labs Team - Giving.tech