Maybe you saw this headline in The Chronicle of Philanthropy last Friday: Charities Lost 103 Donors For Every 100 Donors They Gained in 2014, Says Study.
Nonprofits are right to focus on donor retention. It is significantly cheaper to retain a donor than it is to acquire a new one.
I think it’s equally valuable to ask a similar question about retention. The question then becomes, is it ever ok NOT to retain donors?
I propose the answer to this question is yes. Not only is it ok not to retain donors sometimes — it’s actually the strategically smart thing to do. What I mean by this is, there are likely some donors on your donor file that are just not worth your time or money to try to retain (as unpleasant as that might feel or sound).
For example, if you have a group of donors that are chronically low dollar givers — let’s say below $10 — there is a very low likelihood that these donors will ever increase their giving to a level that would result in them generating positive net income for your organization. What that means is, every time you contact them, you lose money.
These are donors you shouldn’t fight to retain. Instead, take the money and time you would have spent trying to retain those donors and put it into something that will deliver more value. Something like acquiring more high value donors, or providing greater stewardship to your middle and major donors, etc.
The real focus of your retention efforts then, should be on retaining the right donors. Those donors who will produce an acceptable return on investment in current year giving and who have the potential for delivering significant long-term revenue for your organization.
Are your retention efforts optimized to keep your best donors rather than trying to hold onto every possible donor?