Ep. 167: The Retention Wall: Why Nonprofits Struggle to Keep Donors (and How to Fix It)
EPISODE 167
The Retention Wall: Why Nonprofits Struggle to Keep Donors (and How to Fix It)
About the Episode:
Getting new donors feels exciting, new names, new gifts, fresh energy. But if you can’t keep them, you’re stuck on the hamster wheel.
In this episode, I talk about the retention wall, why most nonprofits struggle to keep donors giving year after year, and how to fix it. We’ll unpack why first-time donors ghost you, what for-profit brands get right about loyalty, and the exact mindset + strategy shifts you need to turn one-time givers into lifelong supporters. If you’ve ever wondered why donors don’t come back, or felt frustrated that your list keeps growing but revenue doesn’t, this is the episode that will change how you think about fundraising forever.
Here’s what you’ll learn:
What is the retention wall, and why do most nonprofits hit it
Why donor acquisition without retention is a losing game
The psychology of why donors don’t give again
Simple ways to create loyalty and connection after the first gift
How to measure retention (and what numbers actually matter)
Stories and examples of organizations breaking through the wall
It’s not your stories—it’s how you’re telling them. If your amazing work isn’t getting the attention (and donations) it deserves, it’s time for a messaging shift. The Brave Fundraiser’s Guide guide gives you 10 done-for-you donor prompts to make your message impossible to ignore. Get it for free here! https://christinaedwards.krtra.com/t/xKuLs6tOiPZa
Christina’s Favorite Takeaways:
“A mid-level donor who upgrades to $10,000 is worth more than 100 new $100 donors.”
“Retention means your donors give again. Upgrades mean they give more together. Those two levers are the hidden growth engine.”
“When you have the right pitch to the right person, upgrades can happen very quickly.”
“It is an easier walk to upgrade your mid-level donors than to go find new strangers.”
“People who give regularly, actually stay at the organization for about eight years, versus people who give single donations typically stay two years or less.”
“Breaking the retention wall is really what takes you from plateau to predictable six-figure growth year after year.”
FREE Resources from Splendid Consulting:
How to Work with Christina and Splendid Consulting:
Easy Emails For Impact™ - Turn Your Inbox into an Income Stream
Donations on Demand: Build a $5K Email Campaign System in 30 min/week
The SPRINT Method™ - Fundraise Like a Pro, 5 Figures At a Time
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Christina Edwards 0:17You. Today, we're talking about the retention struggle. So why do so many nonprofits struggle to keep donors? Why is this a persistent problem? I see no matter the nonprofit size and what can you do to fix it? Because the stat that we're all looking at, the stat that is so rampant in our sector,
Christina Edwards 0:48
because the reality is the average nonprofit keeps only about 42% of its donors year over year. That means over half of the people you worked so hard to bring in last year are gone. Now imagine if Apple lost 55% of its customers annually. The CEO would be fired on the spot, right? And this isn't about comparing apples to apples. This isn't about blaming or shaming. This is about addressing what is so rampant in our sector, and what you could do instead to retain your donors long term. If you're a nonprofit that's half a million to maybe $2 million annual budget each year, chances are your board is obsessed with acquisition right more names, more campaigns, more events, more new people, because it looks good on paper. Look, we got 300 new donors, but the truth is that a mid level donor who upgrades to $10,000 is worth more than 100 new $100 donors, and yet those mid level donors, the 100, 200, $500 givers, are what I'm calling the Forgotten middle as I was going over the kind of concepts and teachings for today's episode, I really was like, this is like middle child syndrome. This is like the middle child so if you you know, maybe you're from a family of three, you know any families of three kids, it's like, Kid number one gets by far and away the most attention, right? It's like, the first kid, the parents are new. They're like, it was just hanging out with a friend who has three kids, and she was joking. She's like, I have so many videos and photos of first child, right? And she's like, third onto third child now, and she's like, wait, I better. I better get a photo of third child, right? Because I have like, 10x more of first child. Because every moment was just like, get out the camera. It was just like, high high touch, high touch, right? Now, the middle child, sort of the stereotype, is the the middle child is the Forgotten child, because you've got, like, all of your energy poured in to the first child, and then by the time you've got your hands full with third child, middle child is, like, kind of just winging it right. So that's, that's the energy we're going to look at today. And in this episode, I'm considering your middle child, your mid level donors. Okay? Now every organization is going to define their mid level donors differently. That's okay. There's not a hard and fast rule, by the way, same for major donors. Major donors might be over somebody who gives over 2500 or $5,000 in your organization. It might be somebody who gives over $1,000 in your organization. This depends on the scale of your organization, so you get to decide. So I'm focusing less on major and not on $100 donors. I'm focusing on kind of that sweet spot where maybe they've given $500 kind of, year after year, maybe they've given, you know, something like that, $500, 1000 2500, something like that. You get to decide on mid level donors, so we're going to focus on that together.
But those mid level donors are those forgotten middle and the paradox here, that's really, really important, is that almost every major donor, the $25,000 donor, started right around there, the middle the maybe it was a $250 gift. Maybe it was $1,000 gift. But typically, the person who gives $25,000 doesn't start from zero to 25,000 right? There's usually an entry point that we're talking about today. So when you ignore the middle, the Forgotten middle, you're actually starving your future pipeline. Okay? So you don't necessarily have a donor problem, which is what a lot of your board thinks when they're like, We need more new people, new people. You actually have an attention problem. So it's easy and it makes sense that your energy is chasing strangers. Dollars, right, cold brand new leads, while ignoring these six figures already sitting in your database. And yes, I'm saying six figures, what I'm saying is so true, and we proved it true for so many of our clients, which is that you can unlock another 100k in funding with your existing donor base, but it takes doing the work to get them there.
Today I'm going to show you how to break through what I call that retention wall, right, that kind of stuck in the middle ground, that middle child donor, and why it's the fastest way to unlock another 100,000 plus in funding, without another Gala, without applying for endless grants that are restricted anyway, and without some sort of Hail Mary acquisition push right, it's about upgrading one and Keeping retaining the donors you already have. Okay, so it's not that I don't want you to do lead gen. Lead Gen is important. But for this episode, we're going to focus on the people already in your world.
Now, everyone thinks that you know, the best way to grow is to grow more new donors. It's the classic line, but if you're already between half a million plus 2 million plus in funding, the real money is actually already inside your org, right? The call is coming from inside the house. It's already in the donor file. The problem isn't that you actually need more new donors. It's that you're not activating the people that you've already got. Proof is in the pudding when you pull your lapsed donor reports and their pages and pages long. Ooh, now we got some good leads. So why do we see that boards and stakeholders are fearful of really going after this middle that I'm talking about, because boards love new donors, because it feels tangible, and also it feels great, right? It feels great to say we got 300 new donors. The growth is on the dashboard. You see the new names, you see the new campaigns, the new events, right? They fear this. CRM, like that file your donor list stagnant. They fear that. Like, if we don't see a lot of growth, the organization is in trouble. Again, I'm not against you getting new donor growth, but that typically takes more time, right? Instead, what they're missing is that retention and upgrades are the difference between a flat million dollar budget and breaking into the $1.5 million territory. I've seen this again and again and again. The real issue is that mid level donors, those $500 donors, right? $1,000 donors, $2,000 donors are forgotten. They don't get the VIP treatment of major donors. They don't get the mass stewardship of your small givers. And sometimes, y'all sometimes that's all they're getting. Sometimes they are just lumped in with your $25 givers, right? And this is really common for organizations who are in that spot, I find between half a million and a million because that means you have a small team.
Christina Edwards 8:19
Time is your number one, most scarce resource, and that means you're dividing up your time between what's scalable, which is lumping everyone into one pot of cultivation, and then anyone else who's VIP, major levels, they get better treatment, right? They get different treatment. They get more high touch treatment. And that Limbo is where the plateau lives, right? So if you're not intentionally nurturing this group, this group who is leaned in, this group who is raising their hand, this group who is engaged, then you are walking past six figures every year, and instead you're it's like you're going outside looking for new people to give you new money. Instead of going, ooh, the money's already here, what phone call do I need to make? What email do I need to send? What outreach do I need to make, to tap in to the potential that's already here.
So the solution is two pronged. You're hearing me kind of mention both simultaneously. One retention that person who makes a gift this year, retaining them so that they are not part of that 40% that we see rampant in the sector that are one and done and two upgrades the person who is you can count on them. They're giving $500 a year. They're giving $1,000 a year, and they're not being upgraded. One of the biggest reasons I hear they're not being upgraded, I already addressed the time. The other reason is I don't want to piss them off, right? I don't want to ask for more. I don't even know if they have the capacity for more. I don't even know them, right? So I'm going to take what I can get, very, very common. I'm going to take what I can get, not rock the boat. Yeah, and so they're kind of retained over here, and they're just getting the rinse and repeat campaigns of everybody else. So retention means your donors give again. Upgrades mean they give more together. Those two levers are the hidden growth engine at this stage. It is the one of the fastest ways we see our clients in the purpose and profit club. We see them grow their fundraising revenue without having to add all of these fancy new things, without having to add and layer on what we think we need, more grants, more galas, more shiny this more better social more blah, blah, blah. No, when you just work on retention and you work on upgrades, you can absolutely unlock another $100,000 in funding.
So in the club, we work with leaders to spot their hidden 100k middle, mid level donors. And here's the surprise, when you have the right pitch to the right pro person, upgrades can happen very quickly. We're not talking about years, we're not we're talking about weeks, right? And that's why I want to focus on this opportunity today, because there is something about right pitch, right person. What I mean here is your mid level donor, who you can rely on, giving $500 each year. They are not all the same, okay? The conversation you have with them that upgrade conversation, is not the same upgrade conversation that you would have with Marco and you would have with Jim and you would have with Susan. Those are three different reasons. Those are three different persons. Those are three different stories and pitches that you would have. And identifying their desires, identifying their why will help you get there and help you refine that pitch? That's why it's important to do that upfront work to find that mission alignment. That's when we see these donors upgrade very, very quickly.
Okay, here's the other opportunity. Let's say those, those mid level donors, those middle child donors, right? Maybe they give $500 a year to three organizations. Can I let you in on a secret, those three other organizations, or those two other organizations, are doing exact same thing that you were doing to them, which ain't much, right? So if you pick up the phone, or you invite them to a coffee meeting, or you do a one to one video outreach, you do something different. It is going to be the most trust building, the most connective, the most stand out thing, they're going to be delighted. They're gonna be like, Oh my God. They're going to be delighted. I see this happen again and again, where, where people will come to a call and be like, Oh my gosh, they were they were so excited by my call. They they couldn't believe that I did X, Y or Z. So there's so much opportunity here, because the bar is so low. Okay?
Christina Edwards 12:56
Another client who recently joined the club launched their first campaign, their first fundraiser inside the club, and they blew past their goal four days early, raising over $20,000 brought brought in new donors, but right away, what we saw was this, we saw a surge in these mid level donors, and that makes me so happy, because I'm seeing already, it's like my mind's eye can see Three months from now, the opportunity to unlock another 1020, 50k in funding from the people who raised their hand as mid level donors in this campaign, right? And that's true for you too. That's why that 100k That's why I'm using that number is already sitting there ready to be unlocked. And it does take fundraising campaigns. This particular campaign was digital. So it was email, it was social, and they had a really, really strong, high converting online fundraising donation page. So we really took some time with their story, and that was a really great way to do a couple of things. That was a really great way to engage and re engage their existing audience. They definitely saw some lurkers come out who were volunteers who had never donated. They had lurkers come out people who had been on their email list had never donated before. They had people who had just donate once a year, typically towards year end. And then they had these middle, mid level donors, right? So it's a really good opportunity to, just like, get everyone's attention, and then from there, it's like, it comes into focus these mid level donor opportunities,
Christina Edwards 14:38
if you're thinking, but Christina, we need new donors. We need more people? Yes, of course, lead gen is always part of the work, but if you're ignoring the mid level retention, you're always leaving money on the table year after year, because it's easier. It's an easier walk to $100,000 of extra funding from your current list than from strangers who have never. Or heard of you like just let that sink in. It is an easier walk to upgrade those mid level donors, and it is an easier walk across your database, across your donor list, to retain your current donors again, then go find new strangers. So when you first have a solid foundation for retention and for upgrades, then we layer on a strategy for new donors. That's when we really see an increase in funding over even beyond That 100k
Christina Edwards 16:50
inside the purpose and profit club coaching program. This is one of the easiest fundraising wins that we create. So we help leaders and teams identify those mid level donors already in their file craft the right pitch, whether it is one to one or one to many, because yes, you can do this at scale, one to many through email. We help donors identify those folks, what to what action to take with them, and create those donor movements that move them up separately on the retention piece, we also can support you with your email welcome series, them from one time donor to a long time supporter. You can also layer in on a recurring giving campaign. That is a great way to solidify that relationship, because we do see that people who give on a recurring basis, actually stay at the organization for about eight years, versus people who give single donations typically stay about a year, maybe two years, tops, right? So once that system is in place, it compounds year after year. So there's a lot of different ways we can layer on some strategies there to increase the retention and those upgrades with those middle child those middle donors. So the best place to go to learn about the club is my upcoming webinar. You can go to splendid courses.com, forward slash live. This program is really made for established teams, where we layer in fundraising and marketing support, because the two are interconnected for your organization's growth retention and success.
Christina Edwards 18:29
breaking the retention wall is really what takes you from plateau to predictable six figure growth year after year. It really isn't about grinding harder and again, it's not really about getting swarms and swaths of new new people. When you have this retention and upgrade strategy in place, right? You don't have to chase every new shiny tactic. You don't have to chase every new trend, right? Instead, you need to keep and upgrade the donors you already have, right when you layer on some other other strategies that we teach in the club, like a social street team, by the way, that's where you get the nude leads anyway, and so as an ecosystem, they're coming naturally through the campaigns we teach. So if your nonprofit is around half a million to 2 million in annual budget, and you're ready to stop overlooking those mid level donors. The purpose and profit club is the place where we help make that happen. This is where our clients double campaign, secure five and six figure gifts and build in retention systems like these, where you get real time feedback that give you sustainable growth. Okay, so go to splendid courses.com, forward slash live, and you can sign up to attend my upcoming webinar, where I will give you a glimpse more into this strategy. I'll see you next time you.