Advancement leaders are identifying the need to increase philanthropic revenue. Covid has emphasized the need for greater support within our local communities. However, traditional fundraising practices impede the growth necessary to keep with the needs of our constituents. Modern fundraising emphasizes the need for sustainable giving revenue on top of short-term support.
Historically, nonprofits have approached this issue by choosing one or the other. Inspiring giving to address short-term needs meant focusing on existing major donors. As a result, many mid-level or long-time annual fund donors did not receive personalized communication such as stewardship for their gifts and chose not to give again. With donor retention rates below 50%, focusing only on existing major donors can negatively impact the long-term health of an organization.
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Adversely, failing to provide top donors with the white-glove service they have come to expect also brings negative consequences. An impersonal experience may dissuade major donors from contributing to your cause again in the future. Even though you are cultivating tomorrow's major donors, today's cannot fall through the cracks either.
The sweet spot for fundraising shops is finding balance. When it comes to donor cultivation, nonprofits should not feel pressured to put all their eggs in one basket. Instead, having a clear plan to cultivate your major giving pipeline and providing highly personalized donor journeys for top supporters will produce the results your organization needs to impact the community profoundly.
Fundraisers know how to provide major donors with personalized experiences. The question then becomes: how can we continue providing a high level of service for our major donors while building our major giving pipeline?
How can we continue providing a high level of service for our major donors while building our major giving pipeline?
The most effective way to accomplish this is to increase your donor retention. The study conducted by Bain & Company found that a 5% improvement in retention can translate to a revenue increase of 25% to 95%. The compounding effect of maintaining a high retention rate can drastically boost philanthropic revenue without having to endure acquiring new donors financially.
In short: improving donor retention keeps costs low while driving significant revenue. Improving donor retention starts with increasing the number of personalized touchpoints fundraisers have with non-major donors.
Check out Gravyty's free toolkit for increasing donor retention today for an in-depth look at how to keep more donors coming back year-over-year. In addition, you'll also gain access to a Donor Retention Blueprint that will help you develop scalable 12-month communication sequences to ensure you keep your donors top of mind. Get your copy today: