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What is donor retention?
Definition: Donor retention is a nonprofit's ability to keep donors giving year after year. It is usually measured as the donor retention rate: the number of people who gave last year and gave again this year, divided by the total number of people who gave last year. A higher rate means more of your support comes from people who already know and trust your work.
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Why it matters
Finding a new donor takes far more time and money than keeping one you already have. A donor who gives a second time is far more likely to give a third, to increase their gift, and to tell friends. Retention is where a stable budget, and most future major gifts, come from.
Donor retention is also an honest measure of how donors feel. People rarely stop giving because of one thing. They stop because nobody thanked them properly, they never heard what their gift did, or the only contact they got was the next appeal. The rate tells you whether your relationships are working.
How it works
How to calculate the donor retention rate
Pick two back to back periods, usually calendar or fiscal years. Count how many unique donors gave in the first year. Then count how many of those same people gave again in the second year. Divide the second number by the first, and multiply by 100 if you want to show it as a percentage. For example, if 200 people gave last year and 90 of them gave again this year, your retention rate is 90 divided by 200, a little under half. New donors this year do not count toward the top number.
Look at retention by segment
One overall rate hides the most useful information. Calculate it separately for first time donors, repeat donors, monthly donors, and major donors. First time donors usually lapse the fastest, so their second gift is the most important one to earn. Repeat and monthly donors tend to stay longer. Major donors are few enough that you can review every lapse by name. Comparing segments shows you where to spend your time, and it shows whether a drop in the overall number is a real problem or a shift in your donor mix.
What drives donors to stay
Donors stay when they feel thanked, informed, and connected. That means a prompt, personal thank you after each gift, an update that shows what the gift actually did, and some contact during the year that is not a request. A phone call from a board member or staff member, a short handwritten note, or an invitation to see the work up close all count. Donors leave when every message is an appeal, when the thank you is a form letter, or when they never hear about results.
Catch lapsing donors early
Most nonprofits notice lapsed donors only when they run year end reports. By then it is late. Keep a list of donors who gave last year but not yet this year, and reach out personally well before your fiscal year ends. Some will have simply forgotten. Others moved, changed jobs, or felt overlooked. A friendly call or note asking how they are, with no hard ask, often brings them back and tells you why they drifted.
Examples
- A food bank's development director calls every first time donor within a week of their gift to say thank you, with no request attached.
- A school foundation sends donors a one page update in the spring showing what last fall's gifts paid for, months before the next appeal.
- A small arts nonprofit pulls a list each fall of donors who gave last year but not yet this year and has board members call them personally.
- A community health clinic invites monthly donors to an annual open house where staff walk them through the program their gifts support.
Putting it into practice
- Calculate last year's retention rate: donors who gave last year and again this year, divided by everyone who gave last year.
- Split the rate by first time, repeat, monthly, and major donors to see where people are slipping away.
- Thank every gift personally and quickly, and make first time donors your top priority for a call.
- Send at least one update a year that shows what gifts accomplished, with no ask included.
- Keep a running list of donors who gave last year but not yet this year, and contact them months before year end.
- Log every conversation with a donor so the next contact is personal and builds on the last.
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Frequently asked questions
What does donor retention mean?
Donor retention means keeping the people who give to your organization giving again in later years. It covers both the outcome, how many donors return, and the work that produces it: thanking donors well, showing them the impact of their gifts, and staying in touch between appeals. Strong retention means your support grows from relationships, not only from new donors.
What is Donor Retention and how to calculate it?
Donor retention is keeping donors giving year after year. To calculate it, count the people who gave last year, then count how many of those same people gave again this year. Divide the second number by the first. If 200 gave last year and 90 gave again this year, your rate is 90 divided by 200. Do not include new donors in the top number.
What is a good donor retention rate?
The most useful comparison is your own rate from last year. If it went up, your stewardship is working. If it dropped, look at which segment slipped. Published sector averages exist, but they vary by data set and by type of organization, so they say little about your donors. Focus on improving your own first time and major donor retention year over year.
Why do donors stop giving?
Donors usually stop because the relationship felt one sided, not because of one dramatic event. Common reasons include a slow or impersonal thank you, never hearing what their gift accomplished, getting only appeals, feeling their gift was too small to matter, or a change in their own finances. Asking lapsed donors directly is the fastest way to learn which reasons apply to you.
How is donor retention different from donor stewardship?
Donor retention is the result: how many donors keep giving. Donor stewardship is the work that produces it: thanking donors, reporting on impact, and building the relationship between gifts. Good stewardship is the main way to improve retention. Tracking retention tells you whether your stewardship is working and which donors need more attention.
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