Donor attrition is the rate at which an active donor fails to make another gift the following year.
While a small amount of attrition is acceptable due to unavoidable changes in financial circumstances, much of the figure is within a charity’s control.
How to calculate donor attrition
75 / 120 X 100 = 62.5%
The goal is to lose as close to zero donors as possible. The lower the rate of attrition, the better for the charity.
Why is donor attrition so important?
Donor attrition is an important figure. Without knowing this percentage, you can’t identify the monetary value of new donors.
For example, if you received 1000 new donors from an appeal but lost 999 existing donors through attrition, financially, there’ll be no benefit. We also know that it can cost up to 10 times more to receive a gift from a new donor rather than one who already supports you. By the time you’ve considered the cost of the campaign, administration costs and the time taken to begin the new relationship, donor for donor, it’s just as beneficial to focus on reducing attrition.
If donor attrition is on the rise for your charity, there might be avoidable causes. Here are the most common and SupporterHub’s tips to keep this number low.
1) Focussing too heavily on new donors
Engaging with new donors is critical to the future of your cause and must not be overlooked. But if you put ALL your eggs in the new donor basket, you’ll fail to build relationships with those you’ve spent the time and money recruiting.
SupporterHub tip: Donor stewardship and building relationships with existing donors are critical. Give equal importance to a donor retention strategy as you do to donor prospecting. This can include holding events for existing donors, regular updates via email and running raffles and competitions for existing supporters.
2) Failing to say thank you or give feedback to donors
Due to a lack of resources, charities can fail to say a proper thank you to existing donors. This perceived lack of gratitude can lead to donors finding a cause where they do feel appreciated. Don’t use asking for money as the only time to contact donors.
SupporterHub tip: Say ‘thank you’ by reporting back the short and long-term outcomes of donor support. Donors deserve to know how their gifts are spent. Without this information readily available, they are likely to find someone who is transparent in their messaging. Devise a comprehensive communication strategy that uses all the tools available like email marketing, social media and SMS. Ongoing communication builds relationships that reduce donor attrition.
3) Failing to prioritise reporting
Comprehensive reporting shows which donors have stopped giving and allows you to compare with previous periods. Without these confirmed figures, attrition is just a guess.
SupporterHub tip: Invest in comprehensive reporting systems to help you monitor vital figures such as attrition. While donor attrition is comparable year upon year, you can also analyse monthly to make sure there are no emerging trends that are cause for concern.
4) Failing to invest in adequate systems
Systems help to streamline processes and increase efficiencies within a fundraising team. Implementing efficient systems should be a key focus of a well-run charity that spends every donated dollar in the most responsible way leading to better outcomes. Showing donors that you’re committed to the growth of fundraising programs will help them see that donations are spent responsibly today and long into the future.
SupporterHub tip: Review all systems and assess whether they’re cost-effective, the best use of administration and the most efficient way to operate. Integrate where possible to provide a more streamlined donor experience and reduce the output required for staff and volunteers.
5) Failing to ask for donor feedback
While you’re the expert on the operational side of the charity, the donor is the expert on what they want from you. There may be unavoidable reasons for donor attrition, such as a change in financial circumstances, but if there is a particular solvable issue with the charity, you need to find out what it is.
SupporterHub tip: Create electronic donor surveys to find out what donors really want from you. Give supporters the chance to provide honest feedback that can help you introduce better systems and build stronger relationships with donors. Send surveys via email so you can monitor the open and delete rates.
SupporterHub is a purpose-built SaaS platform that helps charities use technology to build relationships and reduce donor attrition. To find out about our FREE trial (no credit card required) and learn how SupporterHub can help take your charity to the next level, book a demo