Measuring Donor Loyalty Walter Wymer 1 Introduction Nonprofit organizations want to retain their donors. As difficult as it can be to attract donors’ initial gifts to your organization, it can be almost as difficult to attract their second contributions. Donor attrition rates are an increasing cause of concern. Many organizations lose up to 60 percent of their donors after their first donation. 2 Research suggests that the key to retaining a higher proportion of donors is building commitment through communication and trust. 3 Communication between the organization and its donors appears to be very important. 4 Lapsed donors (donors who stop giving) report dissatisfaction with the quality of their communications with the organization. 5 Initially, having an existing relationship between a new donor and a regular donor is useful. 6 Most communications from the organization to the donor is useful. Public relations events, conversations with staff, email, 7 and so forth can be helpful in connecting with donors. 8 Focusing more attention on donor retention makes sense. Even taking into account the costs of superior donor retention programs, it is generally less costly to retain a current donor than to acquire a new donor. Because donor contributions over time can add up to considerable sums, because donors tend to increase their level of giving over time, and because a long-time donor is more likely to leave a bequest, the lifetime value of a retained donor can make retention costs wise investments. Since donor retention is important, development professionals need a means of assessing the health of donor retention efforts in their organizations. Fortunately, this is not too difficult. If a donor stops giving, she is not counted as a retained donor. This calculation can be scaled up and summed to produce the percentage of donors that are retained. While development professionals must decide when someone is no longer a donor (not giving after one or two years, for example), calculating donor retention is relatively simple. How does the development professional determine if the organization’s level of donor retention is healthy or not? The organization could compare its level of donor retention with an 1 Walter Wymer, Professor of Marketing, University of Lethbridge. walter.wymer@uleth.ca 2 Sargeant and Woodliffe (2007). Building donor loyalty: the antecedents and role of commitment in the context of charity giving. Journal of Nonprofit & Public Sector Marketing 18 (2): 47-68. 3 Bennett R, Barkensjo A. 2005. Causes and consequences of donor perceptions of the quality of the relationship marketing activities of charitable organizations. Journal of Targeting, Measurement and Analysis for Marketing 13 (2): 122-139. 4 Shabbir H, Palihawadana D, Thwaites D. 2007. Determining the antecedents and consequences of donor-perceived relationship quality - A dimensional qualitative research approach. Psychology and Marketing 24 (3): 271-293. 5 Sargeant A, Hudson J. 2008. Donor retention: an exploratory study of door-to-door recruits. International Journal of Nonprofit & Voluntary Sector Marketing 13 (1): 89-101. 6 Sargeant A, Woodliffe L. 2007. Building donor loyalty: the antecedents and role of commitment in the context of charity giving. Journal of Nonprofit & Public Sector Marketing 18 (2): 47-68. 7 Olsen M, Keevers ML, Paul J, Covington S. 2001. E-relationship development strategy for the nonprofit fundraising professional. International Journal of Nonprofit & Voluntary Sector Marketing 6 (4): 364-373 8 MacMillan K, Money K, Money A, Downing S. 2005. Relationship marketing in the not-for-profit sector: an extension and application of the commitment-trust theory. Journal of Business Research 58 (6): 806-818.