Behind every donation is a person who cares deeply about making a difference in the world. Fundraisers have the unique opportunity to connect these passionate individuals with amazing causes that align with their values. Whether it's supporting research for life-saving treatments or providing access to education for underserved communities, donors want to know that their generosity is making a tangible impact. As a fundraiser, your job is not just about securing donations, but also about building relationships with donors that foster long-term support and loyalty. By understanding what motivates donors to give and creating a personalized retention strategy, you can turn one-time contributors into lifelong advocates for your cause.
But some days, fundraising feels like nothing but guesswork.
Amid the questions and challenges facing fundraisers today, getting and keeping donors is more critical than ever. Investing in acquisition and retention is crucial to your organization, but these programs can leave you with more questions than answers if you don’t back them with data-driven strategies.
Why Are Acquisition and Retention Essential?
Though they often belong to different teams with different strategies and goals, acquisition and retention are two sides of the same coin. As such, we must break down the silos and bring the teams together to move donors along the pyramid.
Focusing on both steps is critical — acquisition and retention affect every other aspect of your organization. Think of it like a car: acquisition is the gasoline, and retention is the starter. Both are necessary to get the rest of the engine working. Without acquisition, we have no donors. Without retention, those donors never become monthly, annual, planned or major gift donors. We lose the opportunity to steward them, so they lapse instead.
Loyal donors are essential for building a solid foundation of support for your organization. It all starts with acquisition and retention. Both strategies must be balanced and strong and work together seamlessly.
Challenges Fundraisers Face with Acquisition and Retention Strategies
Acquisition metrics often reveal the first sign of trouble in your donor file. Similarly, as retention rates drop, it becomes clear that there’s a disconnect between your organization and your donors. Your strategies are likely to blame, especially when you consider how they fare against the many challenges fundraisers face today.
All isn’t lost. You can overcome each challenge with a strong tech partner and robust data analytics.
Challenge: High Cost of Acquisition in an Uncertain Economy
We’re still seeing donors tightening their budgets and being more selective about who they support. This, combined with increased costs for outreach efforts like direct mail, means it takes more time and money to nurture net new names now than in other economic times.
According to our Philanthropic Pulse Survey, approximately 60% of nonprofits met or exceeded their fundraising goals in 2022. However, after looking closer, these fundraisers also had fewer net new names and a higher percentage of lapsed donors. Unfortunately, most organizations didn’t notice these changes because they didn’t have the technology to identify them.
Solution: GivingDNA dashboards can reveal troubling patterns in your donor file so you can pivot quickly and strategically. They also show identifiers such as age, net worth, and communication preferences so you can personalize messages. This puts your acquisition and retention dollars to work more effectively and helps you build relationships faster.
Challenge: Hard to Capture and Keep People’s Attention
Because donors are more selective about which organizations they support, the competition for donors is fierce. One-size-fits-all outreach doesn’t cut it. Instead, you must understand what donors are interested in, how they want to communicate, and how they want to give.
Consider the increase in donors most organizations saw during the COVID-19 pandemic. Some food banks saw twice as many new donors, but these were crisis donors. Once that particular crisis ended — or as donors’ circumstances worsened — they lapsed. What’s more, attention spans are growing short in a world that seems to have a new disaster nearly every week.
Solution: You may draw a donor in through a crisis, but data will retain them. When you engage a donor with services and programs that interest them, they’re more likely to stick around. For example, food banks might have gained crisis donors to ensure children had enough to eat while schools were closed. This short-term problem can point to long-term interest. By using your data to see where donors directed their gifts, you can identify donors to approach with similar needs, such as providing free school lunches.
Challenge: It’s Difficult to Tell What’s Working
Attribution isn’t what it used to be. The old ways of identifying and attributing where a donation came from are quickly becoming antiquated.
In 2022, GivingUSA’s Giving by Generation study asked donors in different age ranges what influenced them to donate. Nearly 60% of millennials — the most significant percentage across generations — said direct mail.
This can be hard to justify — because millennials don’t give by mail, we assume they don’t respond to mail. However, 13% of millennials who gave online were influenced by a direct mail piece. So, the attribution is online giving, but that’s not what drove the gift.
Solution: Take nothing at face value; dive into your data. With a robust tracking tool like GivingDNA, you can easily see the communication and giving channels your donor prefer. For instance, New Donors/Dollars by Channel metrics show which channels — direct mail, peer-to-peer, email, etc. — are most effective for specific demographics. Once you know your acquisition numbers by channel, you can tailor your outreach accordingly.
Challenge: Not Sure How to Use the Data You Collect
Everyone knows data is essential, but do they know why? And, more importantly, do they know how to use the data they collect?
One recent survey showed some interesting stats:
Your organization might be inundated with data. But if all you’re getting are spreadsheets, you’ll struggle to make sense of the numbers in front of you effectively. As a result, you risk missing important patterns and trends.
Solution: Segmented data in charts, graphs, and other visual formats are easier to read, so you can pivot quickly to a new strategy when needed. Easy-to-export insights help you uncover opportunities in real-time. For example, a donor who paused or decreased their gift last year wouldn’t be a good candidate for a monthly giving program. But you don’t want them to lapse, either. So, you could offer them a volunteer opportunity instead.
Challenge: Lack of Resources
Our Philanthropic Pulse Survey showed 73% of organizations plan to increase their revenue goals in 2023; however, just over half of those organizations said their employee headcount would stay the same.
It’s tempting to lean on standard tools like wealth screening, but that won’t acquire new donors or retain lapsed ones. And again, because costs associated with acquisition and retention have increased, donors aren’t the only ones watching their budgets. As a result, fundraisers are forced to look for low-hanging fruit — and may miss ample opportunities in the process.
Solution: The only way to meet or exceed last year’s goals with the people you have now during economic uncertainty is with technology. Finding tech that frees up your time by giving you actionable next steps on your donors at all levels is essential. Deep insights into your current donors’ preferences tell you what matters most to them so you can customize your outreach and asks.
Goodbye Guesswork, Hello GivingDNA
Every aspect of your fundraising comes back to acquisition and retention. When these programs lag, it’s a warning sign for the health of your entire organization. Don’t get caught by surprise — let dynamic data analytics guide where you focus your efforts.
Data can help you better understand the complete picture of your organization. By removing the guesswork from your acquisition and retention strategies, you can optimize the donor experience. This is critical for building solid relationships that will support your organization in good times and bad.
GivingDNA unlocks the potential hidden in your donor file so you can make informed decisions that will take your fundraising efforts to the next level. Contact us today for a free demo or to get started.