Why January Is the Most Important Time for Donor Retention

Want to deepen supporter relationships and strengthen your donor retention rate? We’re here to help make it happen.

Over 25% of a nonprofit’s annual donation volume on Classy occurs from Giving Tuesday through Dec. 31. With that spike in donation volume also comes a bounty of new donors converting at a rate 2x higher than average.

However, it’s not just about earning donations from one-time givers. You want to convert these brand-new donors into lifelong advocates. That starts by recognizing and optimizing your donor retention rate.

In that light, January is one of the most important months of the year to connect with donors, new and returning, to reaffirm their value to your organization. Below, we’ll show you tried-and-true tips to connect with donors in more meaningful ways, strengthen existing relationships through intentional stewardship, and nurture new advocates with ongoing communications.

What Does Donor Retention Rate Mean?

Your donor retention rate measures the percentage of donors from a previous period (usually a year) who made at least one additional gift in the current period. In other words, it measures how many of last year’s donors contributed again this year.

Here’s the donor retention rate formula:

Donor Retention Rate = (Number of donors who gave both last year and this year / Total number of donors from last year) * 100

For example, if you had 100 donors last year and 70 of them donated again this year, your donor retention rate would be 70%.

A higher donor retention rate indicates strong donor relationships and effective donor engagement strategies. Conversely, a low donor retention rate might suggest your nonprofit organization focuses too much time on less impactful strategies, like securing one-time donations rather than stewarding new donors into long-term supporters.

Retaining repeat donors is almost always more cost-effective than acquiring new ones, so this is a key metric to keep your eye on—and ideally, move in the right direction.

Why Your Donor Retention Rate Matters

Donor retention has been on the decline in 2023, largely driven by an overall decrease in dollars and donations given.¹

These numbers tell us that the supporters you’ve worked so hard to activate, especially those engaging with your Giving Tuesday and year-end campaigns, can easily lose interest without intentional touchpoints. This can be detrimental to your overall fundraising efforts, especially if you’re paying a high donor acquisition cost, and more particularly, your long-term sustainability.

Here are a few reasons to prioritize optimizing your donor retention rate:

• Cost-effectiveness: A new donor is often more expensive to acquire than retaining an existing one. Costs associated with marketing campaigns, fundraising events, and outreach efforts to attract new donors can quickly add up. By focusing on retaining existing donors, your organization can achieve more with fewer resources.
• Lifetime value: A retained, loyal donor has a higher lifetime value and is more engaged than a passive donor. In fact, our donor sentiment report, Why America Gives, found that loyal donors planned to give 4x the donation amount on average compared to the average passive donor during the 2022 giving season. Plus, when donors continue to support a cause over time, their cumulative contributions can be substantial.
• Predictable revenue: A stable recurring donations campaign provides your nonprofit with a more predictable revenue stream. This predictability aids in budgeting, planning, and ensuring that your organization can consistently fund its programs and initiatives.
• Strengthened relationships: A high donor retention rate indicates strong, lasting relationships between your organization and its supporters. Knowing that donor relationships sit at the core of your ability to deliver on your mission, this element is critical to growth.
• Feedback and improvement: An engaging campaign to retain loyal donors provides nonprofits with opportunities for feedback. These donors can offer insights into what the organization does right and where to make improvements.
• Positive reputation: A high donor retention rate signals to current donors, volunteers, and partners that your nonprofit is trustworthy, effective, and meaningfully impactful. This public perception is extremely influential in attracting or deterring support.

Thus, donor retention efforts are crucial for the long-term viability of your nonprofit and its fundraising operations. Below are a few simple steps you can take to retain their support and bolster your fundraising for the coming year.

Donor Retention Strategies and Tips

1. Thank Your Donors

As with any donor to your fundraising campaigns, Giving Tuesday and year-end donors should receive a genuine, heartfelt “thank you” once the campaign concludes. Thanking your donors is a central part of effective donor retention strategies, but it’s not the entire formula. You should also follow up with your donors about the results of the campaign they supported and the impact their gift made.

That said, January isn’t just a time to follow up with December donors. Instead, use this as an opportunity to thank everyone who donated to your nonprofit in the past year. And remember, donations aren’t always financial. Be sure to thank the people who donated their time and energy as well.

Additionally, you can use your January outreach to extend new opportunities for people to get involved with your nonprofit in the coming year. For example, if someone donated to your August fundraising campaign, send them a thank you note along with a reminder that you’ll run a similar campaign again this year.

And don’t forget to get creative with how you send these messages, combining insights about what donors are interested in and upcoming projects you’ve planned in similar areas. If you’re looking for a good place to start, download these nine email templates to be sure you don’t miss any crucial touchpoints.

2. Create and Send Engaging Content

January is when most nonprofits release annual reports, which is a great tool to re-engage large donor cohorts and start new conversations. Use this opportunity to showcase all the data around the impact your collective work has had in the past year. Be sure to include digestible graphics, compelling storytelling, and your plans for the next year.

Keep in mind that your donor management efforts don’t have to solely reflect conversations about fundraising. In fact, you can reach out to your pool of supporters at any point, so long as you have a valuable message to engage them. Aside from your annual report, there are plenty of other content opportunities your nonprofit can leverage to get in front of your donors, like:

• Beneficiary stories
• Programmatic impact results
• Campaign progress
• In-the-field volunteer experiences
• Employee highlights
• Event recaps
• Cause awareness days
• Donor surveys

There are also several channels you can leverage to promote this content to supporters, like social media posts, blogs, infographics, nonprofit newsletters, and welcome email series. No matter what you send—or how you send it—everything should provide value to your donors.

And remember to always include strong calls to action for your donors to get involved.

3. Promote Monthly Giving Options

Asking for more one-time donations is never a bad idea, but recurring givers are over 9x more valuable to your nonprofit. Thus, you should take advantage of the new year to ask your supporters to double down on their commitment and upgrade to a monthly recurring giving plan.

Don’t be afraid to ask this of your supporters, either. We have the data to back it up.

In our State of Modern Philanthropy report, we focused our data analysis and insights on identifying trends in return donor behavior and found that almost 40% of people who donate over $1,000 online return the next year to give again, while only 10% of those who give under $50 return the next year

Again, get creative with how you market this option to your audience. For example, you might run a marketing campaign that promotes your recurring giving program to fulfill a New Year’s resolution to help others.

4. Announce Your Upcoming Initiatives

While the new year offers plenty of time to reflect on past success, remember to reserve time for developing a forward-looking donor retention plan. What does your nonprofit have planned for this year to deepen new and existing relationships? Do you have any exciting events, major annual campaigns, or exciting new initiatives in the works?

One thing that everyone has to look forward to in the new year is a birthday—it might be a few days away or a few months from now. You could market a DIY fundraising campaign where supporters have an opportunity to donate that upcoming birthday—or other major life event, like a wedding or athletic milestone—to your cause.

Meet with your staff to gather a list of highly marketable opportunities like this, then start planning your touchpoints over the course of the coming year. When you’re ahead of the planning curve with a fully built calendar, it makes it easier for donors to add notable events to their calendars and spread the word to their networks.

5. Prioritize the First Three Months

The initial three months following a donor’s first contribution are pivotal in shaping their long-term relationship with your organization. Almost ⅓ of first-time donors who become recurring donors on Classy do so within the first 90 days of their initial donation.

This period of time is a golden opportunity for nonprofits to solidify the bond, nurture the budding relationship, and set the stage for sustained support. Here’s how to make a statement and build the relationship during this time:

• Give immediate acknowledgment: Send every first-time donor a prompt and heartfelt thank you message. Personalize it to make them feel valued and recognized for their contribution.
• Engage with relevant content: Share stories, updates, and impact reports that resonate with their reasons for donating. This not only keeps them informed but also reinforces the importance of their contribution.
• Introduce them to the community: Invite them to exclusive events, webinars, or community forums. Making them feel like a part of a larger mission can foster a sense of belonging and commitment.
• Create a feedback loop: Encourage feedback on their donation experience and act on any suggestions or concerns they might have. This shows that you value their opinion and are committed to continuous improvement.
• Send special offers for recurring donations: Consider offering incentives or special recognitions for those who choose to become recurring donors within these first three months.

6. Focus on Storytelling, Experience, and Connection

Donor retention doesn’t just come from marketing and persistence. It comes from quality storytelling, shared experiences, and deep connections. Here’s how each plays a distinct role in fostering donor retention and nurturing long-term relationships.

• Storytelling: The art of storytelling is not just about narrating events. It’s about evoking emotions, painting vivid pictures, and making your mission resonate with your audience. The modern donor wants authentic, relatable stories that inspire action.
• Experience: Creating a seamless, personalized experience involves aligning your organization with modern donor preferences. Thus, the donation experience should be holistic, continuous, and reflective of innovation. During peak giving seasons, a positive experience with your donation forms can be the differentiator that transforms one-time donors into lifelong supporters.
• Connection: Connection is about establishing and nurturing relationships. It’s about making donors feel a part of the mission, evoking emotions like gratitude, and ensuring they see themselves as integral to the cause’s success. Modern connection strategies focus on gaining and retaining attention, creating emotional bonds, and establishing the right balance in communication frequency.

Together, these pillars form the foundation of a successful fundraising strategy. By weaving compelling stories, offering enriching experiences, and fostering genuine connections, your nonprofit can keep donors engaged, loyal, and invested in the cause for the long haul.

Start Retaining Your Donors

We say January is the most important time for donor retention because it follows the largest giving season of the year—when you likely acquired new supporters eager to engage with your work. It’s also the start of something new, which ushers in organic excitement and hope.

People return to work refreshed and optimistic after the holidays about the impact they can make in the new year. It’s crucial your nonprofit capitalize on this mindset with the donor retention tips outlined in this blog post.

You’ve worked hard to acquire new donors, so don’t let them slip away from your nonprofit.

If you want even more donor retention tips and advice, download our 13 free retention email templates below.

Copy Editor: Ayanna Julien

Article Source:

1. “Early 2023 Fundraising Results Reinforce Diverse Strategy Urgency,” Research & Reports, AFP Global, last modified August 9, 2023, https://afpglobal.org/early-2023-fundraising-results-reinforce-diverse-strategy-urgency.