Key Term

What is Donor Retention?

Definition

Donor retention refers to the percentage of donors who continue to give to a charitable organization from one year to the next. It measures an organization's ability to maintain ongoing relationships with its supporters and secure repeated contributions over time, rather than just receiving one-time donations. This metric is calculated by dividing the number of repeat donors by the total number of donors from the previous time period.

Significance

Donor retention is crucial for nonprofit sustainability and growth because acquiring new donors typically costs significantly more than retaining existing ones. High retention rates indicate strong donor relationships, effective stewardship, and organizational stability. Organizations with better donor retention rates generally have more predictable revenue streams, lower fundraising costs, and stronger long-term financial health. Additionally, retained donors often increase their giving over time and are more likely to become advocates for the organization, potentially leading to legacy gifts and expanded networks of support.