28 Mar How to Calculate Your Donor-Retention Rate: Tips for Churches and Nonprofits
Repeat donations are one of the best ways to ensure that your church or nonprofit is successful in carrying out its mission. While you should always work toward expanding your reach and bringing in new donors, having a high average donor-retention rate will make running your nonprofit much easier.
A high retention rate allows you to budget better for the coming months and years. For example, if you have a consistent retention rate from quarter to quarter of about 75 to 80%, with an average contribution of $X, you can budget for that amount of revenue each quarter.
So, how do you calculate your donor-retention rate? Let’s find out.
Calculating Your Donor-Retention Rate
Calculating your retention rate is quite simple. While there are a few different formulas out there, we have found that this one is both the easiest to calculate and provides the most reliable figure.
(Number of Donors Who Donated in Year/Number Who Also Donated the Following Year) x 100 = % Donor-Retention Rate
So, let’s say that in 2021 you had a total of 432 donors. Of those 432 who donated in 2021, 337 donated again in 2022. Now, let’s plug those figures into the formula to get our retention rate.
(337/432) x 100 = 78% Donor-Retention Rate
And keep in mind that you can apply this formula to months, quarters, or other time periods as well, as long as the timeframe is consistent with the two variables. So, if you wanted to compare Q2 and Q3, you simply plug those figures into the (XXX/XXX) expression.
According to J Campbell Social Marketing, the average donor-retention rate is 40-45% across nonprofit sectors. So if you can get your retention rate to 50%, you’re actually doing better than the majority of nonprofits out there. That being said, you should always strive for more when it comes to your retention rate because the higher you can get it, the better off you’ll be, and the less pressure you’ll have to bring in new donors.
So, how can you keep your donors giving consistently and avoid the painful loss of attrition? Using digital solutions is one way to do just that.
With mobileAxept’s GiveNow, you can reach each and every donor where they are—on their smartphones. GiveNow is one of the best text to give tools available, offering the most intuitive donor experience on the market today. It’s user-friendly and easy to integrate with your current systems.
For more information or to get started, contact sales.