After all, what could that possibly have to do with raising money for a good cause? Unfortunately, it’s a thing. In the broadest sense, churn rate for nonprofits is a metric that measures the number of individuals leaving your donor pool.
As you get in the swing of running a nonprofit, you will inevitably see donors leaving. And, as a nonprofit, you will wonder what caused them to stop donating – often pointing towards the last thing that happened to your donor as the cause.
Your mind will swirl with what it could be.
Was there another nonprofit operating in the same space that did it better?
Was it a lack of personalization on my part to communicate?
Did I communicate too little or too often?
Is my donation website too difficult to use?
Don’t beat yourself up, it’s going to happen.
But…we are going to show you some ways to try to defeat churn and keep those donors coming back.
Churn and Donors: Understanding their motivations
To understand why donors stop giving to a nonprofit, we need to understand why they gave in the first place.
What motivates donors to give to a charity?
Even with charitable donations, the donors are going to ask – what’s in it for them?
There are many other factors involved—like a donor’s personal perception about donating to your cause, how passionate they are about it, or what impact it may have on their lives.
What donors really want to know is what they’re fulfilling in their lives by donating to your charity.
We’ve done a lot of research to find out what makes donors tick. We wanted to identify the most common reasons that donors give even if some of these reasons are outside of your nonprofit’s influence, especially when it comes to bringing donors back for a repeat donation.
For example:
- Passions and motivational drive
- Lifestyle and culture
- Preferences and tastes
- Experiences and worldly knowledge
- Personal or professional background
- Charitable knowledge
- Personal impact
These are not in any particular order of importance. However, you can see that there are many different reasons a donor decides to commit, which also creates a number of potential reasons they might walk away.
For instance, donors that give to your charity have the expectation that you allocate your funds efficiently and that the money they donate creates an impact for your cause.
If those are the metrics they used to measure the value of your charity, then failing to meet those expectations (or not being transparent about funding) is bound to create donor churn.
What stops donors from giving to a charity?
Even though donors may seem like they can be fickle, it’s unlikely that they stop giving simply because they got bored. So what exactly is it that puts out their passion for your cause?
Most likely, donor churn happens due to a series of circumstances over time.
Let’s take a look at this example of how you might lose a donor.
John Donor has gotten wind of your amazing fundraiser to help HOPE Domestic Violence Shelter raise money for 4,000 people in need in his hometown. He donates and is excited about the impact he may make.
After John donates, he gets a thank you email. But he notices it’s not personalized and does not mention anything about the impact he may be making.
John then receives a secondary communication email, again not sharing the impact he made at all—but instead, another ask.
At this point, John has had no resolution, no meaningful connection, and no reason to return. He discontinues communication with your fundraiser and never re-engages with your organizations.
What happened there?
Lack of personalization, follow through, communication on impact, and connection has caused John to feel like he wasted his time and money. He doesn’t see how his gift is making a difference.
At any stage of this process, you could have intervened to reinforce the donor’s trust in your charity. For example, by sending a personalized thank you letter or tracking how you are spending funds and communicating that to the donor.
Here are the four most common reasons a donor stops giving to a charity:
- They thought the charity didn’t need them.
- No thank you follow-up.
- They were not alerted of the impact they made.
- Circumstances have changed.
Donor fatigue is real. 41% of donors would donate again if they received personalized communication on the impact of their support.
Tools to fight donor churn
The good news is that you have access to tools and techniques to fight donor churn and keep people coming back to your fundraiser. The power lies within you.
With the right tools, you can put strategies in place that will get you results—time and time again.
Donor data: use it or lose it
Every time you obtain a new donor, you will also obtain information about them. What you choose to collect is up to you (or your donation plugin). You can use this data to develop donor personas and know exactly who your donors are.
The bad news is the data you get when a donor fills out a form for their first donation is not enough to pinpoint the reasons for donor churn.
It’s up to you to be a little more detective-y (yep, making that word up) to find out how you can connect with your donors on a more personal level.
Just like asking for donors to give, you need to be proactive when requesting donor feedback.
Donor feedback: do a deep dive
Asking donors for feedback can be tricky. You don’t want to over-communicate, annoy, or anger your donors. You should only email them when it really matters, right? Like when you’re asking for a donation.
Wrong. Asking for feedback can be a healthy way to get to know your donors and for them to feel appreciated. It’s all about the delivery.
Not only do surveys give you valuable feedback from your donors that you can use to inform your donor retention strategy, but they are also a form of communication that helps you keep your donors engaged.
Donor surveys:
- Keep donors invested in your cause
- Show donors that you value their opinion
- Allow donors to communicate any frustrations they have
Here are a few steps to help identify the reasons your donors leave and help them to stick around.
Step 1: Identify and ask your donors
There are two ways to go about collecting feedback from your donors:
- Ask new or existing donors after a donation (Hey, how was your experience?)
- Reach out and ask older, possibly expired donors (Hey, haven’t heard from you in a while. Has your experience changed how you feel about our charitable organization?)
Note: To do this, you will need to define what an expired or lapsed donor is. It could be someone who has not given in the last year, or it could be a donor who has recently opted out of another fundraiser.
Step 2: Segment your feedback surveys
Since you will have two different kinds of donors, it’s important to filter the feedback surveys into categorical data.
Filter feedback with segments like communication preferences, demographics, personal interests, different charitable donations, and recurring donor status.
Beyond the basics, you’ll want to then begin differentiating based on donor type. For a survey, here are the donor types you should take note of and how you should frame your survey.
- First-time donors
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- How they found out about your nonprofit.
- About their donation experience on a ranking 1-10 scale.
- About the communication quality.
- Their preferred channel and frequency of communication.
- About any roadblocks they may have had while donating.
- What they would like to see that they haven’t seen yet.
- Returning donors
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- How much of an impact they think their donation makes.
- About their level of satisfaction with how their donations are being utilized.
- About their fulfillment with your donation reports.
- About their passions in causes that interest them.
- Churned donors
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- Why they stopped giving.
- What you could have done better.
- How this impacts the cause.
Services like WPForms make it easy to create feedback surveys for your organization.
Once you have collected feedback from donors, you will need to take some time for a deep dive to identify the root causes of any donor churn.
Calculate churn rate for nonprofits
Let’s do a little donor churn calculation first. You’ll need this information to actually crunch the numbers.
Donor retention rate formula (DRR) = Number of returning donors (current year) / Number of previous years donors) X 100
Average donor retention rate = The average total donor retention rate for nonprofits – the % of donors who made a donation the previous year.
With your donor retention rate, you can:
- Determine the level of donor retention so that you can assess your resources.
- Compare it with your future donor retention rate to measure the effectiveness of new strategies.
This all will help you in discovering your donor churn, so you can eliminate it.
Motivate donors to give again
Here are some things you can do to address the common reasons that donors leave:
Reason 1: They thought your charity didn’t need them
This indicates that you may not have communicated the impact of their donation to them well enough. It could also mean that their circumstances have changed.
The good news is that you can change with them.
Show them that their donation is making an impact with fundraiser stories, impactful reports, and encouraging testimonials from your organization. Share social posts about how the fundraiser is going. Write newsletters about how impactful it has been to date. And entice them with new and exciting fundraisers that have a similar cause.
Reason 2: They were not properly thanked for their donation
This indicates that you may not have followed up with them for a thank you or did not personalize your thank you response to their donation. Everyone needs gratitude—especially when it’s volunteer actions.
Identify their preferred communication channel first, then make sure to send them a personalized thank you message. This message should contain their name, their donation amount, and the impact that it made toward your charity. It should also thank them more than once! Try adding it three times, so they feel your gratitude.
Also, never underestimate the power of a handwritten note.
Most importantly, don’t present an ask before thanking them!
Reason 3: They did not receive information on how their donation was used
This indicates that you were not communicating the donation fund allocation and were not transparent enough about how it was being spent. Everyone needs to know that their money is being used for what they intend it to be used for.
Track where donations are being spent and be sure to send an update to your donor. This update can be sent a number of ways. After the thank you email, as a personal message, or it can be a gauge counter or chart of where the money is being spent. Basically any way to showcase the money is in good hands – send it.
Reason 4: They can no longer afford to donate or their circumstances have changed
This indicates that you may not have reached out enough to sustain a connection or you may have a minimum donation amount that may be too high for the donor. If your donor has suddenly had a change of heart, that’s a different story. If they have had a change of life circumstance, you would know this if you continually reached out.
Send periodic, multi-channel communications to your donors. These can be check-in emails, social shout-outs, newsletter campaigns, or even fundraiser invitations to community events. Don’t be afraid to just send them an email to say hello, how are you? What a difference that could make in anyone’s life!
The main reasons for donor churn are different for every nonprofit, but there are some general strategies that can improve your overall retention rate:
Move into a multi-channel communication strategy
Multi-channel communications are a thing. It’s everywhere, and you will have to keep up if you want to satisfy the marketing parameters of your fundraiser.
What does this mean for your nonprofit? You should be everywhere your donors are.
Here are a few multi-channel communication platforms you can try out to reduce churn for your donors:
- Email and push notifications
- In-app pop-ups
- Social posts
- Newsletter campaigns
- Text campaigns
- Mail-in promotions
By making sure you are sending considerate and timely messages, you continuously demonstrate the value of your fundraiser
If nonprofits could focus on communicating (their way) the impact of a donor’s contributions through multiple channels, they could improve their retention rates exponentially.
In addition, nonprofits that used two or more different types of communications had a higher donation total and a higher average donation amount.
Nonprofit roadblocks on the churn journey
So, on the fundraiser end, what are the challenges that you will face when implementing these strategies?
For lack of a better term, you will be lacking. You will be lacking in data and effort—on their part and yours.
The best way to overcome the data roadblock is to track information on your donors. Did they provide their address, their preferences or their lifestyle choices in the donor journey? Track their donations and where those donations are being used in order to send out meaningful communications along the way.
When it comes to effort, you can help yourself by getting more tools in place. Setting up segmentation and automation for all your follow-up communications takes effort—but once it’s set up, you can use templates to help you save time.
Calling donors to thank them takes a lot of effort but the impact could be the difference between a returning donor and a churned donor. If you can block your calendar for one hour each week to personally call your donors, and have a five-minute conversation, you may just have made the connection to stop the churn cycle.
Use the tools, make the calls, see the difference.
Conquer churn with the power of connection
If you’re using churn as a metric in your fundraiser strategy, it may be too late.
Don’t wait to see if your donors are leaving because you dropped the ball and gave up hope. It’s important to make your donors feel special! Just like any “sale”, you will want the person who is donating to feel that they’ve made an impact.
TLDR? Here’s the skinny on donor churn.
- Identify your donors
- Ask for feedback
- Personalize, connect and communicate
- Use your tools
- Don’t give up
It’s never an isolated incident that causes donors to stop giving, it’s more of a combination of factors that can be avoided if you just take some time to look at the journey.
At GiveWP, we hope that never have to suffer the donor churn cycle. Your donors should be anxiously awaiting your next fundraiser because you have taken the time to care about their impact. Each donor counts.
If you’d like to make more of an impact, check out the GiveWP blog for resources on how to retain donors, make donors happy and most of all—have a fundraiser that makes a difference. You got this!
Reach out to the GiveWP team for a demo to try it yourself.
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