Nonprofit Marketer: Our overall retention rate is about 68%. What could we do to improve that? What should we strive for?
Fundraising Agency: Actually, you’re right where you should be. We don’t advise trying to increase retention beyond that, because we actually need those lapsing donors for your donor acquisition program.
Yes, I actually heard this very thing from a nonprofit organization just this week. This is an insane response to the nonprofit’s question that stems from deeply flawed thinking. I can’t claim to know what the fundraising agency was thinking, or why they were thinking it. But they’re wrong. This is bad advice.
The problem with this recommendation is that we (as in, our entire industry) knows that the higher your donor retention rates, the less pressure you’re under to acquire more new donors. The less you’d have to invest in low return activity like new donor acquisition and lapsed donor reactivation, and the more money you have to invest in efforts that produce significantly more net revenue. Things like hiring more major gift officers, building a monthly sustainer program, or finally starting that legacy giving effort you haven’t been able to fund in the past. All of these activities generate a TON more net revenue for organizations.
But they don’t generate anywhere near the same amount of revenue for your fundraising agency.
That’s why it’s always important, when you hear crazy recommendations like this, to ask yourself, who really benefits from this recommendation?
If your agency gives you advice like this, it’s probably time for you to find a new partner.
All are thieves with fake Apps. Thanks!